Carbon Market Watch

For fair and effective climate protection.

GEO discloses ugly truth of CDM hydro project (Newsletter #11)

25 Nov 2010

A new report in the German magazine GEO points once more at the problems of CDM hydro dam projects. Hydro Dam Power Projects have long been criticized because of their impacts on local inhabitants who might be forced or coerced to relocate and because of their environmental impacts: flooding of valuable agricultural lands, destruction of existing ecosystems, pollution from increased methane emissions, to name just a few. (For these reasons the use of credits from CDM dam projects has been restricted in the EU ETS[1].)

The project that GEO investigated is located in the Southern Chinese province of Guizhou. The project design document (PDD)[2] states that “89.3% of the investigated residents think the construction of the project will not have a negative impact on local environment”. The GEO article paints quite a different picture: Some local farmers affected by the dam asserted that they were forced by the government to sign resettlement agreements. Others were apparently driven off their land even though they declined to sign the agreements. Locals also said they were attacked and beaten by the police several times. One official stated that people were poorly compensated for losing their farm land and their homes. The GEO report claims that hundreds, if not thousands of people are negatively affected by the project. It is difficult to see how such a project can claim that it is contributing to sustainable development as it maintains on the first page of its PDD. Unfortunately, the project is far from unusual in this respect: most CDM projects do not deliver many – if any – benefits to local populations[3].

Furthermore, the project seems to be clearly non-additional. GEO reports: “The PDD states that the project owner learned about CDM in March, 2005 – at that point in time, however, according to the “Construction Management Report”, the foundations of the dam were almost completed.” This project is not an exception: many of the hydro projects that are currently built in China are clearly non-additional. The CDM EB has been made aware of this for many years[4] and the Board is finally starting to take action: in February this year, the CDM EB rejected the issuance of credits for 38 Chinese dam projects.

CDM Watch welcomes this as a first step but urges the international community to undertake more significant reforms to:

1. Eliminate the high social costs associated with large dams and

2. Prevent the registration of non-additional CDM projects which greatly undermine the credibility of the CDM and, more importantly, compromise climate protection goals.

[1]  The EU Linking Directive regulates the use of CDM credits within the EU-ETS. The directive states that large hydro credits must comply with the criteria and guidelines of the World Commission on Dams.

[3] For scientific articles on the topic, see the Climatic Change 2007:

[4] See for example: