Saturday September 15, 2012

"Report released at Clean Development Mechanism (CDM) Executive Board meeting in Bangkok on September 11, 2012 aims to give recommendations on how to reform CDM process. New Delhi based Centre for Science and Environment (CSE) says, report’s recommendations do nothing to correct the drawbacks of CDM."

HNF Correspondent

However, this report is the final outcome of a year-long process to recommend how to reform the CDM design and process, and to envision a way forward to prevent the global carbon market from disintegrating. “The report is singularly geared towards saving the ailing CDM and carbon markets, with not enough focus on how the social and environmental integrity of the mechanism should be addressed,” said CSE Director General Sunita Narain.

‘Cheap’ development mechanism

CDM was crafted following the Kyoto Protocol to primarily serve two purposes - help developed countries to meet their commitments under the Protocol in a cost-effective manner, and support sustainable development activities in developing countries.

But it rapidly degenerated into being just a market tool used by the Kyoto parties to write off their targets with cheap offsets and grossly failed to deliver the real reduction in emissions that were needed to effectively address climate change and promote sustainable development in developing countries.

As per CSE researchers, CDM has not just been ineffective but it is also a case of carbon accountancy fraud - a ‘cheap development mechanism’ promoting cheap offsets. Its flawed design has failed to deliver on what was really needed - transformational leapfrogging to clean technology in developing countries.

‘Dangerous’ recommendations

The CDM Policy Dialogue Report has 51 recommendations focusing to save the carbon market by increasing the demand and price of carbon credits. For this, the panel wants every country, developed as well as developing, to increase their mitigation ambition and use carbon credits to meet their targets. These recommendations are akin to rewriting the international climate convention and removing the distinction between developed and developing countries.

Under the convention, only those developed countries that are signatories to the Kyoto Protocol have legally binding mitigation targets, and they can use the benefits of carbon credits to meet their targets. The panel’s recommendation of allowing all developed countries to have access to carbon offsets is actually rewarding the defaulters of Kyoto Protocol.

On one hand, it is going to reward countries like the US which have not signed on to the Protocol; and, on the other, it is rewarding countries like Canada which have not met their first commitment and have now walked off from the second commitment as well.

By asking all countries to increase their mitigation ambition, the panel has disregarded all reports that indicate that currently, developing countries are doing much more than developed countries to reduce carbon emissions. By asking developing countries to use carbon credits to meet their voluntary pledges, the report has removed the distinction between the developed and the developing countries – a recommendation which CSE says is “dangerous and disturbing.”

“This seeks to rewrite the international convention on climate change by destroying the very concept of equity and CBDR embedded in it,” said CSE Deputy Director General Chandra Bhushan who heads its climate change unit adding that “a more effective way to approach this would be to ask developed countries to increase their current mitigation targets and step up their efforts to match those required by climate science”.

While the report recommends increasing/stabilising the price of carbon credits on one hand, it supports carbon credits resulting from forestry projects (such as REDD) and carbon capture and storage (CCS) which typically tend to oversupply the market.

As the report suggests linking of carbon markets and increasing the scope of CDM by including forestry projects (REDD) in it without ensuring the right rules and safeguards in place, this could endanger the livelihoods of indigenous communities and forest dwellers by making our forests a carbon dump yard for developed countries, warns CSE adding that “REDD should be addressed through non-market mechanisms by involving the local communities instead.”

Alleging that Sustainable development, a key mandate of CDM, has been superficially addressed to placate the civil society, CSE cites that the Report has failed to internalise the experiences of environmentally destructive projects that have been awarded carbon credits in the past.

The report recommends that the CDM Executive Board could designate an appropriate and mutually acceptable independent authority to do the assessment in case the host government doesn’t have the capacity to do so. CSE expresses its concern if the “independent authority” is going to be the same private international consultants that have compromised the integrity of the entire CDM mechanism.

While supporting the idea of greater representation of least developing countries that have not accessed the benefits of CDM projects so far, CSE, however, warns that if cheap credits remain the focus of the CDM market, these countries will not be able to access the benefits as their projects are likely to be small and will not be able to compete with large projects that can supply carbon credits at much lower prices.

CSE advocates for adapting a ‘gold standard’ and a benchmark price for small projects from developing countries. The standard would be a mechanism to rate, value and price projects in terms of additional social and economic benefits instead of just reductions in GHG emissions.

While the report recommends the need for professional experts in the CDM Executive Board, “it is, also, more important to ensure regional balance within the professional and experienced members of the Board”, said CSE.

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