Coal Power Projects in the CDM

The CDM was designed to bring clean and sustainable development to poor countries while enabling rich countries to achieve their emissions reductions cost efficiently. Because the CDM was designed to be technology-neutral (meaning that any technology that removes emission is eligible), the CDM includes projects that create efficiency improvements for fossil fuel power projects. For example, it allows new coal fired power plants to earn tradable emissions credits for claimed improvements in power plant efficiency. However, coal projects do not belong in the CDM because they:

  • Would have been built in the absence of the CDM, i.e. the projects that have come forward to date are all ‘non-additional’ because super-efficient technology are actually business-as-usual and often required by the host country. These projects will therefore generate carbon credits that do not represent real emission reductions
  • Inflict toxic pollution on local populations and ecosystems, which undermines the CDM’s sustainability objectives
  • Lock in billions of tons of CO2 emissions over decades to come instead of investing in renewable energies and a low carbon development path, which undermines climate mitigation goals.

In addition, these projects are awarded carbon credits based on flawed CDM crediting rules that allow significant over-crediting. The CDM Executive Board suspended the methodology for these projects (ACM0013) in late 2011. The methodology is currently being revised but the revisions will not apply to projects that are already registered. They will also not address the climate burden inherent in coal use.

CDM Watch advocates banning coal projects from the CDM and the purchasing of credits from coal projects by the EU. Policy Brief on Coal in the CDM that outlines the impacts of coal use, explains why coal projects do not belong in the CDM and offers concrete policy solutions for the Parties of the Kyoto Protocol, the CDM Executive Board and the European Union.


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