Dear friends,

According to Mayan believes, cataclysmic or transformative events will happen in 2012. In this first CDM Watch newsletter in 2012, we are looking at several issues and examine whether this could also be true for the international carbon market.

2012 is marked as the last year where new CDM projects can be registered and be eligible for the EU-ETS. As of 2013, only new projects located in LDCs will be eligible. We therefore call on validators to handle rushed registration requests with particular care.

A new set of members to the CDM Executive Board will be meeting next week for the first time. Their agenda is packed as usual and includes the agreement on the CDM management business plans setting out priorities for 2011 and 2012. Although the final mandate by the COP had been considerably weakened, we are glad to see that environmental integrity features as a priority. Now, dear Board members, please tackle the problems around additionality testing!

Throughout 2012 eyes will also be set at the freshly set up High-Level CDM Policy Dialogue Panel. The first meeting held in February provided clarity that the panel will be developing recommendations about the CDM’s internal workings, the future direction and its impact to mitigation and sustainable development. Expectations are high.

Turning to specific project types, we explain why the crediting methodology for CDM coal power projects which was suspended in November 2011 because of deep flaws, is beyond repair. Further to a field trip to India, Swedish MP Jens Holms questions the involvement of the Swedish government in the heavily criticized “Rampur” hydro-electric project.

In this context, we also explain why the EU should not expect the UN to address the problems highlighted the European Commission Study on the Integrity of the Clean Development Mechanism. The findings of this study will be presented and discussed at the European Parliament on 29 February.

2012 has already become famous as the year of carbon price collapse. We are looking closer at loopholes that are undermining climate mitigation efforts and CCAP Director Tomas Wyns explains how the surplus of allowances can be addressed immediately to protect the efficacy of the EU-ETS. Another hot topic in 2012 is the establishment of modalities and procedures for new market mechanisms. However, without increased reduction commitments to ambitious target, new market mechanisms will face a severe lack of demand for potential future carbon offsets.

Without political will to step up international efforts to reduce emissions with binding and ambitious climate targets, the Maya prophecy might become reality for carbon markets.

Table of Content

1. CDM Watch at work
2. CDM Executive Board 2012 – who’s who
3. A closer look at the CDM Executive Board agenda for 2012
4. High expectations on High-Level CDM Policy Dialogue Panel 
5. CDM coal power projects beyond repair
6. Swedish involvement in Indian hydro CDM questioned
7. Five reasons the EU should not expect the UN to fix the carbon market
8. Why we need to address the EU-ETS’ allowance surplus 
9. Loopholes
10. CDM Watch Durban assessment
11. Upcoming CDM Watch event at the European Parliament
12. Civil society workshop on CDM in India, April 201