Carbon Market Watch

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Mega Dams and CDM fraud in Sikkim (Watch This! #5)

27 Mar 2013


By Jiten Yumnam, Centre for Research and Advocacy, Manipur

In the state of Sikkim, land of rhododendrons, in the Himalayan foothills in India’s North East, rivers have been aggressively dammed over the last decades. Dam developers are pushing these projects as clean energy sources to seek carbon credits as additional profits from the UN Clean Development Mechanism (CDM). More than fifteen mega hydro projects are already seeking carbon credits in Sikkim where hydropower is common practice. Some of these wrong decisions should be reversed and no further projects must be approved.

The 500 MW Teesta VI project of Lanco Energy Private Limited is a hydropower project located on the Teesta River at Subin Khor village of South Sikkim. On the same river, the 1200 MW Teesta III project is one of India’s largest hydropower projects trying to register under the CDM. Providing a misleading picture to the UNFCCC to receive undue CDM benefits, both the Teesta III and the Teesta VI project are clearly not additional. They are common practice because all power plants in India’s north-east are hydro power stations. What’s more, neither during stakeholder consultations nor at public hearings the project developers did reveal that these projects are planning to seek CDM credits. This makes the obligatory stakeholder consultation process under the CDM faulty. Fortunately both project are still at validation and have not generated carbon credits so far.

The dams in Sikkim are not green and clean and will only worsen global warming if their credits are used to comply with emission reduction obligations.

However, the non-recognition of Lepcha peoples’ rights over their land and their exclusion in decision making processes for dams on their sacred Teesta River remain key issues. The Lepcha peoples’ wishes, to protect the sacred Teesta River and their last reserve, the Dzongu, have been completely dishonoured. The blasting for construction of the project has led to severe landslides in hills and destruction of several houses near the dam site. A holistic impact assessment on ecology, seismic impacts, transmissions lines, impact of reduced flow and other impacts on Lepcha People such as blasting, is absent from its Environmental Impact Assessment (EIA).

Other common practice large hydro projects in Sikkim such as the 96 MW Jorethang Loop project of DANS Energy Private Ltd on the Rangit River are already registered as CDM projects. They are now generating non additional carbon credits. More projects are knocking the door in the registration pipeline. Those projects do not reduce emissions compared to what would happen without the CDM and do not contribute to sustainable development (to the contrary!). They must therefore be rejected by the CDM Executive Board.

Conclusions & Recommendations

International and national CDM policy is too weak to govern CDM projects and their impact assessment. There is no credible independent verification of developers’ claims regarding approval criteria. According to a Wikileaks cable, the NCDMA does not actually evaluate projects for sustainable development or additionality. Indeed, experience has shown that the Indian DNA and the UNFCCC approve almost all projects even when credible unchallenged evidence is presented.

Hydro power plants are common practice in Sikkim and other parts of India’s North East region and the projects do not rely on carbon credits to be financial feasible, even more so at the current price of carbon credits. The dams in Sikkim are not green and clean and will only worsen global warming if their credits are used to comply with emission reduction obligations.  At the same time they will destroy the backbone of livelihood support for millions. Most dam projects ignore the recommendations of the World Commission of Dams (WCD) and the recommendations of the UN Committee on Elimination of Racial Discrimination in 2007 to respect indigenous people’s rights in dam construction in India’s North East. All validation and registration of big hydro projects for CDM from Sikkim and other parts of India’s North East should therefore be revoked immediately and no new projects approved. Indigenous peoples’ rights in Sikkim must be fully recognized in all development policies and projects. For more information about Sikkim and hydroprojects visit: and



Read more from Watch This! NGO Voices on Carbon Markets #5