Carbon Market Watch

For fair and effective climate protection.

The Role Of Civil Society In The Improvement Of Flawed Methodologies (Newsletter #5)

01 Dec 2009

Given that there are currently about 150 approved methodologies and another 40 pending, the EB has acknowledged the need to revisit those methodologies in order to improve their objectivity, applicability, usability and consistency. To facilitate this task, the Board will consider revised procedures for the submission and consideration of new methodologies as well as requests for revisions and requests for clarifications of approved methodologies. CDM Watch very much welcomes this step. However, according to the procedures only project participants are invited to recommend improvements. Therefore, CDM Watch calls on the EB to strengthen the role of civil society within this process. In particular, the EB shall consider recommendations from civil society, including community groups for the revision of approved methodologies and must open calls for public input if a methodology is being reconsidered.

Action to be taken by the Board: The Board must take into considerations recommendations from civil society to amend fundamentally flawed methodologies that either result in the increase of emissions, i.e. due to the lack of additionality or by creating perverse incentives or that do not contribute to the overarching principle of sustainable development. As such CDM Watch recommends the amendment of the following methodologies:

Methodology AM0001 for HFC-23 destruction: HFC-23 is an unwanted by-product in the production of HCFC-22, a refrigerant and temporary substitute to CFCs. The HFC-23 has a Global Warming Potential 11’700 times higher than CO2. CDM projects for the destruction of HFC-23 in HCFC-22 plants have resulted in huge windfall profits for HCFC-22 plants as well as a perverse incentive to artificially stimulate the production of HCFC-2 as it is very cheap to install a destruction facility. Currently, there are 20 of these projects registered as CDM projects and would continue to pump 1.107.391 Mt CO2eq by 2020 cheap and environmental harmful offsets into the carbon market. These provisions were adopted at a point in time when HCFCs were only phased out by 2040 under the Montreal Protocol. However, Parties to the Montreal Protocol decided in 2007 to accelerate this phase out considerably. In the light of the accelerated phase out and technological progress in the sector, the current provisions are not adequate anymore. The Swiss nongovernmental organization Noe21 submitted a request for revision of the methodology AM0001 to the Executive Board in December 2007. Since the CDM Executive Board has so far neglected to act, Parties must request the Board to revise the methodology AM0001 in light of these developments. Until such a revision is effective, the current methodology must be put on hold in order to avoid that new projects are registered or the crediting period is renewed based on this outdated methodology.

Methodology AM0021 for N2O destruction in new adipic acid plants: The Board is currently discussing the inclusion of new adipic acid production facilities under the CDM. This case is very similar to the destruction of HFC-23: the revenues from CERs can exceed the costs of adipic acid production. As a result of these incentives, all registered CDM projects run far above their capacity, while the production is going down in plants with abatement in Singapore and Annex I countries. This ongoing carbon leakage already results in the issuance of millions of CERs without any real emission reductions. The four projects currently register expect to “reduce” 396.576 Mt CO2eq by 2020. The crediting of new plants would only increase this carbon leakage. Such N2O destruction plants should not be eligible under the CDM and the methodology for existing plants must be revised to address the ongoing carbon leakage. An ambitious emission benchmark for baseline emissions appears the easiest way forward to reduce the incentives for carbon leakage.

Methodology ACM0013 for improving the performance of coal based energy: These CDM projects can replace the implementation of new renewable energy projects and enable fast-growing economies to leap-frog the dirty energy sources that are the primary cause of climate change. Subsidizing coal will undermine the very goals of the CDM by enabling significant emissions of CO2 and methane from coal mining and combustion. Moreover, the CDM modalities and procedures do not address other air pollutants in technologies used to reduce the emissions of a coal fired plant in developing countries. These air pollutants include flue gas desulfurizers (FGD), selective catalytic reducers (SCR), and low-NOx burners which are severely harmful for human health. Thus, construction of supercritical plants funded by the CDM may allow (or implicitly encourage) operators to meet CO2 emissions standards through increased emissions of other pollutants. In total there are 15 of these projects in the pipeline and claim to reduce 147.613 Mt CO2eq by 2020.

Methodology AM0025 for avoided methane emissions from alternative waste treatment: The CDM is funding incinerators and landfill gas collection projects which are counterproductive both in terms of environmental integrity and sustainable development. There are a number of problems on the methodology side, including the facile assumption that all biogenic emissions are climate neutral, which artificially lowers the CO2 emissions from waste-to-energy below their true levels. The alternative scenarios usually fail to envision alternative treatment for organics (such as composting) or high-recycling scenarios, both of which are plausible and preferable from a GHG emissions perspective. And the methodology does not take into account the embedded energy loss (and associated GHG emissions) of destroying materials which can be recycled. At the same time, these projects compete directly with informal sector recycling, which provides livelihoods to many of the world’s poorest people. In total there are 55 of these projects in the pipeline and claim to reduce 99.083 Mt CO2eq by 2020.