Carbon Market Watch

For fair and effective climate protection.

CDM Watch UNFCCC submissions (Newsletter #13)

04 Apr 2011

The month of March saw a number of deadlines for public input to the UNFCCC policy process. The following section provides an overview of submissions made by CDM Watch:

a.   Areas and means for direct communication between the CDM EB and relevant stakeholder groups

Communication between civil society representatives and the Board mainly happens via means of public participation in the CDM process cycle. With the aim to present the views of civil society in the carbon market, this submission focuses particularly on how to improve the public participation as a means to improve direct communication with the Board. In order to improve communication between civil society and the Board following recommendations are made:

  1. Set-up email notification systems for registration, issuance and methodology processes as well as for all public participation procedures that depend on a certain period of time
  2. Further improve of the user-friendliness of the UNFCCC CDM website including the translation into all official UN working languages
  3. Make available essential documents of CDM projects (at least the PDD and the EIA) in the language(s) of the host country
  4. Make available hard copies of the translated PDD to affected communities
  5. Ensure that all supporting documents are uploaded prior to the start of the public commenting period
  6. Allow submissions of comments in the language(s) of the host country
  7. Allow delayed submissions of comments if the delay is due to a reasonable justification
  8. Increase the public commenting period for large projects
  9. Increase the public commenting period on new methodologies
  10. Introduce a mechanism where concerns about CDM projects can be submitted at any time

You can download the submission here.

b.   CDM Appeals Procedure

Jointly with ClientEarth and Transparency International CDM Watch has submitted comments in response to a call for public input to allow for appeals against Executive Board (EB) decisions[1].

The right to information, the right to public participation and the right to seek justice are human rights inherent to all individuals. The inclusion of an appeals procedure in the CDM project approval process presents a crucial opportunity for the EB to secure these human rights and to promote enhanced accountability, legitimacy and public trust in and acceptance of the CDM as a valid tool for reaching its goals under the Kyoto Protocol – namely, mitigating global climate change while promoting sustainable development.

It is likewise an opportunity to introduce coherence and quality control into the EB decision-making process, as access to justice is a vital aspect of accountability, providing venues for the enforcement of procedural and substantive environmental rights and duties.

The purpose of our comments is to outline the critical procedural aspects that must be considered and included in a future CDM appeals procedure, so that it might promote transparency, accountability, and consistency in the CDM project approval process and improve the efficacy of the CDM as a tool for reducing greenhouse gas emissions. Additionally, it may allow for more meaningful public input into the EB’s decision-making – something that is woefully lacking under the current procedures.

You can download the submission here.

c.   The issue of materiality in the CDM

In Cancun Kyoto Protocol Parties have decided to consider the issue of materiality with the  aim to prepare a draft decision on this matter for COP-17 which will take place in December 2011 in Durban, South Africa.

“Materiality” would limit the liability of DOEs for errors in checking data in PDDs and accompanying documents. In theory, DOEs are held responsible for any CER which may be inappropriately issued. In such cases, DOEs have to replace a corresponding amount of “valid” CERs for those CERs issued in error. Recentely, the EB has shown in its new regulation for Programme of Activities (PoA) that this potential „buy back“ sanction is a serious option.

However, in practice, this situation has never occurred. Nevertheless DOEs remain concerned over their liabilities and have pressured the EB to set a materiality threshold. They argue that without the application of materiality a DOE would need to be 100 % sure that no wrong figure or statement is given within the assessed documents no matter what significance (in terms of non-additional emissions) such a mistake would have. But we believe that it is indeed the task of DOEs, to ensure that no wrong figures or statements are given in the PDD and assessed documents.

We believe that in the case of the CDM, it is important to bear in mind that it is an offsetting mechanism. This means that the emission reductions credited under the CDM entitle the buyers of the CERs to increase their domestic emissions correspondingly. The CDM in itself does not directly reduce global GHG emissions but helps to achieve a given emission reduction target at a lower cost.

Therefore, our comments are presented in the light of the risks the CDM poses to environmental integrity if certified emissions reductions are issued as a result of wrong figures or statements given in the PDD and assessed documents.

You can download the submission here.

d.   Inclusion of reforestation of lands with forest in exhaustion as A/R CDM project activities

Jointly with the Ecosystems Climate Alliance, CDM Watch also submitted its views on the potential inclusion of reforestation of lands with forest in exhaustion as A/R CDM project activities.

Currently, any plantation established on land that was forested after 1 January 1990 is excluded from the CDM. But a new possibility to include lands with “forests in exhaustion” as A/R CDM project activities is currently being considered.

The term forests in exhaustion (FE) was proposed by Brazil at COP-14 in Poznan and was used for the first time in Decision 2/CMP.4. But in the forestry sector this expression has not been used so far and a specific description or definition endorsed by international organizations such as FAO, IPCC, etc. is not available.

This new definition would literally mean that an afforestation project could be implemented on land which is already forest. This is completely absurd. The definition may even include land areas with existing plantations or forests and builds on the hypothetical assumption that they would be “finally harvested” at some point in the future. This basically means nothing else than forest management would be allowed under the CDM which would severely contradict the agreement reached in Marrakech.

This is a very arbitrary approach, opening considerable potential for gaming. In practice, Brazil’s proposal would not benefit the climate but it would provide massive subsidies for forest management in existing monoculture tree plantations. According to the REDD-monitor, Brazil’s “forests in exhaustion” CDM proposal would be a disaster for forests and for the climate and create a massive subsidy for industrial tree plantations. For more information about the impacts of this proposal and Brazil’s alleged motivations, please see Why Brazil is interested in “forests in exhaustion”.

In short, we consider this proposal to be little more than an attempt to provide subsidies to industrial tree plantations in circumstances that encourage bad management practices and the establishment of plantations in inappropriate locations. Such a subsidy would insulate the wood growing and processing industries from commercial pressures to improve their efficiency, reduce wastage, increase recycling and select more suitable sites for plantation establishment. The “forests in exhaustion” proposal also risks undermining the recently established REDD+ mechanism by incentivizing the establishment of plantations under the CDM rather than the restoration of natural forest ecosystems under REDD+.

The Ecosystems Climate Alliance and CDM Watch therefore consider that the proposal to include the reforestation of lands with forest in exhaustion as a CDM project activity should be rejected.

You can download the full submission here.

[1] Based on decision 2/CMP.5, paragraph 42, taking into account the recommendations of the EB contained in annex 2 to its annual report.