Climate change: ‘Clean development’ projects under fire

New evidence has emerged that up to two thirds of projects financed under the auspices of the UN’s Clean Development Mechanism (CDM) should not be credited for reducing greenhouse gas emissions.

“Evidence is accumulating that [the CDM] is increasing greenhouse gas emissions behind the guise of promoting sustainable development,” says US NGO International Rivers, which monitors global CDM projects. 

The NGO argues that most CDM projects do not fulfill the criteria of ‘additionality’, which stipulates that projects in the developing world need to be built specifically in order to offset greenhouse gas (GHG) emissions in developed states before they can qualify for financial support.

“Chemical, coal and oil corporations and the developers of destructive dams” are recieving billions through the CDM, “in many cases for projects they would have built anyway,” says International Rivers. 

The claim that many projects do not respect the additionality criteria is reflected in an April 2008 study authored by two Stanford University professors. “Much of the current CDM market does not reflect actual reductions in emissions, and that trend is poised to get worse,” the study says.

EU member states and companies can obtain GHG emissions offset credits through the CDM. EU policymakers are debating the extent to which the mechanism should be used in the EU’s Emissions Trading Scheme (EU ETS) for the period beyond 2012, amid concerns that allowing energy-intensive industries to purchase a large number of CDM allowances would undermine the EU ETS (EURACTIV 29/06/07).

Meanwhile, a global ‘carbon market’ worth over €40 billion has developed, with strong growth forecasts based on the expectation that the CDM, the EU ETS and a future US carbon market will lead to a boom in emission credits trading (EURACTIV 19/02/08).

Michael Wara and David Victor, the authors of the Stanford study, argue that “it is possible to fix the CDM” through “much stronger regulatory oversight and much improved verification systems”.

But “that approach will also imply that CDM will become a smaller market with a possibly even less predictable supply of emission credits,” according to the conclusions of their study.

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