CDM Watch Newsletter #12, February 2011

A new set of CDM Executive Board members is meeting this week in Bonn, Germany for the first time this year. As usual, CDM Watch is using the opportunity to bring some transparency to key issues on the Board´s agenda and to highlight other burning CDM issues that have been reported to us.

Under the leadership of the freshly elected Chair Martin Hession, five new Board members, predominantly from Central American countries, have replaced some familiar faces in the CDM world, including Brazil´s Jose Domingos Miguez. At their first meeting, the new team will discuss a number of issues, notably the CDM management and business plans, which will set out priorities for 2011 and 2012. We highlight several deficiencies in the priority setting process, in particular the fact that environmental integrity has not been identified as a key objective. Within this context, we also outline where CDM Watch sees the Board´s priorities for 2011-2012, including the revision of methodologies, mandatory validation of the grid emission factor, stringent rules for DOE liability, how human rights abuses could be addressed within the framework of the CDM and how to strengthen public participation in a meaningful way.

On a more technical level, we are also presenting a new study on grid emission factors (Grid EFs) that was conducted by Perspectives. The study assesses whether Grid EFs are complying with UN rules and whether these rules are robust enough to accurately reflect achieved emission reductions. The results suggest they aren’t. Because the factors do not have to be independently verified, an estimated 11 million excess credits will be issued before the end of 2012.

DOE liability is particularly important. There are just 7 projects under review this week, a steep drop from the 2010 average, which on occasion exceeded the 100 mark. We don’t believe that this drop is related to the fact that the projects have become better or that DOE performance has improved. On the contrary, CDM Watch is deeply worried that the new fast-track procedure which was put in place by the UNFCCC Secretariat allows dubious projects to slip through the net. In light of the controversies surrounding its application, the recent registration of the Sasan project, which will receive more than 20 million credits over the next 10 years for the construction of a clearly business as usual new coal-fired power plant in India, can only be the result of administrative error. At a time where there is no appeals procedure in place to challenge faulty and unjust decisions by the Board, its registration is a black mark against the CDM.

A closer look at two CDM projects in Panama and Honduras, which have been linked to human rights violations make it clear that stronger scrutiny of CDM projects is overdue. In both cases, resistance to the proposed projects has been brutally repressed. The project in Panama, is a clear case were submitted comments were ignored. Within this context, we also provide insights into a new procedure open to civil society that allows appeals in such cases.

Pursuing one of our key objectives, which is to enhance the participation of civil society in the CDM, we are pleased to announce that two CDM workshops will be taking place in the second half of February. In cooperation with numerous Central American environmental organisations we are organising CDM workshops in Mexico City (19 February) and El Salvador (26/27 February).

We also take the opportunity to sum up developments around the recent ban on HFC-23 and N2O (from adipic acid) credits in the EU ETS and where we see the next steps, both at EU and UN level. Finally, we provide a brief opinion on the recent decision to include carbon capture and storage technologies in the CDM.

Happy reading!

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