Carbon Market Watch

For fair and effective climate protection.

Policy Brief: Why Coal Projects in the CDM undermine Climate Goals

10 Sep 2011

PDF (English)

The Clean Development Mechanism (CDM) was designed to bring clean and sustainable development to poor countries while enabling rich countries to achieve their emissions reductions cost efficiently.

The CDM now allows new coal plants to earn tradeable emissions credits for claimed improvements in power plant efficiency. However, coal projects do not belong in the CDM, because they:

  • Would have been built in the absence of the CDM, i.e. the projects that have come forward to date are uniformly ‘non-additional’ and will therefore generate carbon credits that do not represent real emission reductions
  • Conflict with the CDM’s sustainability objectives by inflicting toxic burdens on local populations and ecosystems
  • Undermine climate mitigation goals by locking in billions of tons of CO2 emissions over decades to come instead of investing in renewable energies and a low carbon development path.

In addition, these projects are awarded carbon credits based on flawed CDM rules that lead to significant over-crediting.

Unfortunately, dozens of new coal projects are lining up to register under the CDM simply to “add a new revenue stream” to investments they are already planning to make. This policy brief outlines the impacts of coal use, explains why coal projects do not belong in the CDM and offers concrete policy solutions for the Parties of the Kyoto Protocol, the CDM Executive Board or the European Union.