CDM Watch Newsletter #5, November 2009

Dear friends,

Paving the way for the climax of climate talks at the COP-15 in Copenhagen, the CDM Executive Board will meet from 30 November – 4 December 2009.

In principle, this meeting will be busy as usual with a large number of issues to be addressed. However, the proximity to the climate talks will heavily influence the agenda since some critical items will be addressed that will probably not find agreement amongst board members and will have to be carried over to the COP to be decided at political level. Also the approaching CDM reform and discussions on a flexible mechanism post-2012 will give a certain spin to the discussions behind closed doors (only a part of the EB meeting is open to public).

Against this background, CDM Watch has scanned the annotated draft agenda of this meeting to provide some recommendations to this week’s discussions. With the priority to direct the eyes of Executive Board members to identified concerns of the current CDM, CDM Watch reveals in this newsletter a number of important items that have to be addressed and resolved during this Board meeting or alternatively, to be carried over to COP/MOP.

Most market players in the CDM will hold their breath when recent concerns about the additionality of wind power projects in China will be addressed. Over the past few months, a large number of Chinese wind power projects have been put on hold because the Executive Board fears that China may have lowered subsidies to the technology to ensure the projects qualify for the CDM and are using the CDM as a substitute for domestic action. In order to discourage other CDM host country governments from doing the same, and to ensure that the CDM is limited to technologies that truly need additional finance to be deployed, the Board could eliminate Chinese wind power projects from the current CDM during this week’s board meeting. CDM Watch supports this move and recommends that the role of national appropriate mitigation actions (NAMAs) should be considered to accommodate technologies that are readily available in developing countries. Chinese and Indian large hydro power, gas and supercritical coal projects face a similar situation.

CDM Watch also addresses a number of critical methodologies that need urgent improvement, as demonstrated by several projects that are currently requesting registration or which members of the Board have asked be reviewed. These include the first of 15 supercritical coal plants in the CDM pipeline requesting registration. CDM Watch had a closer look at this methodology and concludes that the Board should take all necessary steps to reject this first project for failing to meet the criteria of the CDM. Moreover, the Board should seriously consider banning this methodology from the CDM. The 24 MW Bhilangana – III Hydro Power Project, which CDM Watch just visited recently, is another project currently requesting registration. This is another example of a non-additional large hydro power project with usual environmental and social problems that are typical for run of river projects. Finally, the first rice husk project registered in Thailand is being examined as more projects are requesting registration, of which one has already been rejected before.

As the Board is initiating a process to revisit methodologies in order to improve their objectivity, applicability, usability and consistency, CDM Watch gives recommendations for a number of methodologies that need urgent improvement, including HFC-23 destruction, waste incineration and N2O reduction plants. Above all, it calls on the EB to strengthen the role of civil society within this process.

Despite the heavy criticism about HFC-23 destruction projects, a seemingly simple decision on what a “swing plant” is will ultimately decide whether the Mexican Quimobásicos HFC Recovery and Destruction Project can be registered as a CDM project activity.

Finally, CDM Watch shares the conclusions that were drawn up at a CDM Workshop for NGOs, Activists and Citizens that took place on 16 November in New Delhi, India. Main demands for the improvement of the CDM are to increase the participation of citizens in the process, to amend environmentally harmful methodologies, to tax carbon revenues for investment in sustainable development projects, to reveal details of buyers of carbon credits and to establish a competent institutional set-up including a credible code of conduct for the CDM Executive Board. The Board should also involve community groups in the monitoring phase of the project in order to create incentives for project proponents to implement the projects responsibly.

The November 09 newsletter contains short analyses and recommendations on the following aspects:

  1. National appropriate mitigation actions to tackle additionality concerns of wind power in China
  2. The folly of CDM credits for supercritical coal
  3. Large hydro power up for registration despite serious protests by local communities
  4. Mitsubishi’s rice husk projects in Thailand
  5. Definition of swing plants to decide over the fate of a HFC recovery and destruction project
  6. The role of civil society in the improvement of flawed methodologies
  7. Insights from the CDM workshop for NGOs, activists and citizens in India
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