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CDM Watch Newsletter #4, October 2009

Dear friends,

Just after UNFCCC delegates have battled over the future of the CDM during Bangkok Climate Talks, the CDM Executive Board will meet from 13 – 16 October 2009 in Bangkok to discuss a number of important issues. CDM Watch takes again the opportunity to read between the lines of the annotated draft agenda in order to bring some transparency to the decisions of the Executive Board (the Board), the market regulator of the clean development mechanism (CDM). The annotations to the draft agenda are published ahead of every Board meeting and are supposed to give a clearer overview about the Board’s agenda. However, due to the complexity of the issues, they are kept in a highly technical language and don’t seem to aim at revealing what’s really at stake. As a response, CDM Watch adds some meaning to the language by exposing the critical items and providing recommendations.

During the Bangkok meeting, eyes will be set on the Board’s discussions on a new definition on forests in exhaustion. Currently, any plantation established on land that was forested after 1 January 1990 is excluded from the CDM. But the CDM EB is now considering a new possibility to include lands with “forests in exhaustion” as afforestation/reforestation CDM project activities. This new definition would literally mean that an afforestation project can be implemented on land, including existing plantations which is already forest, as long as it will be “finally harvested” at some point in the future. This is completely absurd.

Also on the agenda is the “concept of materiality”, which would limit the liability of designated operational entitied (DOEs) for errors in checking data in PDDs and accompanying documents. CDM Watch will listen carefully how Board members address this issue at a time when SGS UK – one of the largest DOEs – is still suspended as it was unable to prove that its staff had properly vetted projects that were then approved for the carbon-trading scheme.

The problematic aspect of additionality testing will also be addressed when Board members will discuss a summary of major issues that trigger a request for review of project activities. The summary states that “additionality is the primary area for which a full request for review of request for registration has been triggered”. With an attempt to improve this phenomenon, Board members will decide upon new guidelines that should make the barrier analysis more objective. However, although CDM Watch does not believe that project by project additionality testing can be effectively improved, it welcomes new guidelines that differentiate multinationals and local SMEs acting as project developers. With the aim to limit the harmful impact of ever more non-additional projects on international offsets, CDM Watch scrutinizes projects under consideration at this EB meeting.

Moreover, CDM Watch provides recommendations on a methodology for increasing the blending in cement production which suggests a threshold for when projects are considered first-of-its-kind, and therefore pass the additionality test by default. Also a new technique that would measure gas leakage with specially designed calibrated bags is under scrutiny. Finally, CDM Watch reminds once more that it is still waiting for a response to the request for revision of the methodology AM0001 for HFC-23 destruction which was already submitted to the Board in December 2007.

Subject to the agenda are issues that trigger a request for review (the EB concludes that 92% are due to concerns about additionality) as well as draft recommendations on strategic improvements to efficiency in the operation of the CDM. For comments on the revised report on the possible inclusion of CCS as CDM project activity which will be again discussed during this meeting, please see the last newsletter addressing the 49th EB meeting.

Enjoy reading!

Table of contents

  1. Subsidies for monoculture tree plantations
  2. Pressure by DOEs to limit their liability
  3. Danger to set precedent when deciding about first-of-its kind threshold
  4. Additionality testing differentiating between multinationals and local SMEs
  5. Calibrated bags to measure gas leakage
  6. Non-additional projects under consideration at this meeting
  7. Revision of HFC-23 methodology

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