Highlights of 68th CDM Executive Board meeting (Watch This! #2)

The 68th meeting of the CDM Executive Board (EB) held in Bonn from 16 -20 July brought a victory against coal power projects in the CDM. It also advanced discussions on the sustainable development reporting (SD) tool that will be discussed and possibly approved  at the next Board meeting in September. This article looks critically at the SD tool and summarizes key outcomes of the meeting.

The 68th Board meeting was an important milestone for CDM Watch and its campaign against coal in the CDM. The decision of the Board to once again reject revisions to the coal methodology essentially locks the door for carbon credits from new CDM coal power projects to the EU ETS. Good timing!  For more information see the following box.

The end for dirty carbon credits from coal power in the EU – One victory down, many more to go!In November 2011, just ahead of COP 17 in Durban, the CDM Executive Board suspended the crediting rules of coal power projects (methodology ACM0013). At their last meeting, the Board requested yet another round of revisions for the methodology. New coal plants in China and India have been trying to use the CDM to get billions in climate finance. Now they have been stopped. The Board’s decision is the nail in the coffin of these projects because there won’t be enough time to revise the methodology before the EU bans credits from China and India from its trading system the EU-ETS at the beginning of next year. As the EU-ETS is the biggest market this means the billions that would have gone to coal now aren’t. Huge thanks to Sierra Club for their campaining and the Stockholm Environment Institute for their technical analysis  and to all the other coal warriors involved in this campaign!

The CDM Executive Board also discussed the development of a sustainable development reporting tool that should highlight sustainable co-benefits of CDM projects. An initially promising opportunity was unfortunately wasted when the Board decided at their previous meeting that this tool shall be voluntary, with no monitoring or verification requirements.

What has been developed so far is a tick-box questionnaire of roughly 20 questions divided in sections for, inter alia, co-benefits, no harm safeguards and stakeholder engagement. The main objectives of the tool are 1) Improvement of the Executive Board’s ability to demonstrate CDM support to sustainable development 2) Streamlining and publishing of CDM sustainable co-benefits and 3) Keeping national governments in charge of deciding on sustainable development.

The Board launched a call for public comments to which CDM Watch, with the support of CIEL and Earthjustice, made a submission on 10 August 2012. The submission highlights the above concerns, especially that the tool is limited to project participants, and that it does not request sufficient information to effectively evaluate whether a project participant has complied with do no harm safeguards or whether it has created opportunities for meaningful engagement in the consultation process.

“Sustainable Development is like teenage sex – everybody claims they are doing it but most people aren’t, and those that are, are doing it very badly.” Chis Spray (Northumbrian Water) in a Design Council Piece about sustainability.

While the voluntary reporting tool lacks requirements on monitoring and verification it is a remarkable sign that sustainable development has been raised on the political agenda. These recent developments as well as the decision in Rio+20 to develop international sustainable development goals set the stage for a broader discussion on the pivotal role of SD in the CDM and other climate mitigation mechanisms.

The issue of sustainable development was also featured in discussions about withdrawal of letters of approvals (LoAs) for CDM projects. Each prospective CDM project has to get such an LoA from the host government before it can apply for registration. Potential infringements with national legislations and the role of DNAs were cautiously assessed and some Board members pointed out that no legal imposition should be made by the UN to host countries or project participants. At the same time, other Board members reiterated the importance of sustainable development and the lack of sufficient criteria.

On a less positive note, a revised methodology for waste incineration projects and landfills (AM0025) was approved despite its flaws including potential negative impacts on local communities. Other topics addressed during the meeting were, inter alia, guidelines for expanding additionality testing to small-scale and micro-scale projects, guidelines on Suppressed Demand, funding and expansion to A/R projects of Standardized Baselines. The meeting also appointed two new Board members from Bangladesh and Zimbabwe and appointed members for the new Working Group on Carbon Capture and Storage (CCS WG) which we will watch closely.

A more comprehensive summary report of the meeting can be found here.

Major decisions on these issues are expected at the upcoming Board meeting from 9-13 September in Bangkok. We are particularly looking forward to discussions about the sustainable development tool and potentially new requirements for local stakeholder consultations. The report by the CDM Policy Dialogue Panel will also be released at this meeting. The September meeting will also be important for the annual CDM Executive Board report that will provide recommendations for COP 18 in Doha.