Carbon Market Watch

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Sustainable Development in Rio+20: So close and yet so far away (Watch This! #2)

27 Aug 2012

At the 1992 Earth Summit in Rio, the cornerstones of the Kyoto Protocol were laid down which then created the so-called Clean Development Mechanism with the aim of achieving carbon emission reductions and, at the same time, deliver sustainable development. Twenty years have passed and sustainable development remains one of the major topics discussed in international settings. One key outcome was the decision to develop sustainable development goals. It is yet to be seen what this would mean for the CDM and other carbon market mechanisms.  

Hopes that issues with the CDM’s contribution to sustainable development (or lack thereof) would be addressed were soon given up and the CDM keeps facing serious difficulties in delivering on its dual goal of climate mitigation and sustainable development. Yet, the CDM featured in a prominent side act of the conference: The United Nations Development Programme (UNDP) launched an initiative to reduce the carbon footprint of roughly 1400 UN staff participating at the conference. This was to be achieved by purchasing an estimated 3,600 carbon credits, each equaling one tonne of CO2 caused in relation to the organization of this conference from Brazilian CDM projects[1]. However, upon questions to the Brazilian government which projects were used for this purpose and what kind of sustainability benefits they would have, no further information was provided.

Brazil is the fourth largest recipient of CDM projects. These 207 registered projects are to deliver more than 320 million carbon credits by 2020[2]. 54 of these projects are large hydropower projects. The heavy social and environmental impacts that large hydro power projects often have on local communities and ecosystems is well known. Brazil hosts a number of infamous mega-dams, most of them in the Amazon. Even projects that are heavily opposed by local populations such as the Jirau, Santo Antonio and Teles Pires[3] dam are currently pending for approval under the CDM. Brazil also approved several industrial eucalyptus mono-cultures as CDM projects such as the infamous Plantar project in Minas Gerais.

It is yet to be seen whether the decision of Rio+20 to develop sustainable development goals by 2015 will provide stronger criteria and guidance to change the current situation. What we do know is that compensating emissions that occurred for the organization of Rio+20 with carbon credits from projects with little or no contribution to sustainable development will not help. One starting point will be to provide real incentives and enforcement for sustainable development and to put in place a strong monitoring system to make sure that the promised sustainability benefits are actually achieved.

Sustainable development and the CDMThe main reason for the CDM’s failure to achieve sustainable development lies mainly in the lack of effective incentives and lack of financial consequences if promised sustainability benefits are not achieved.  Moreover, lack of safeguards can cause projects to have negative impacts. In the case of the CDM, each country decides individually whether a CDM project contributes to sustainable development. Because of the investments these projects bring with them it is usually in the interests of the respective host country to secure as many CDM projects as possible. The contribution to sustainable development usually has little to do with the decision to pass national approval for a project. Moreover, even if a project contributes to sustainable development, there is no monitoring system in place to verify how this is done in practice.



[2] IGES July 2012

[3] See International Rivers: The Global CDM Hydro Hall of Shame