New recommendations on CDM Reform

CDM reform sign

Carbon Market Watch has set out its views on reform of the Clean Development Mechanism (CDM). The proposals, sent in a response to a consultation launched last year, include provisions on how to ensure projects result in genuine net environmental benefits. The submission also includes detailed recommendations on how local civil society involvement should be regulated and how grievances should be handled when projects harm local communities or the environment.

The underlying rules of the Clean Development Mechanism (CDM) were supposed to be reformed at last year’s climate change conference in Warsaw. However, countries could not agree on the types of reform needed and postponed the necessary decisions to this year’s conference in November in Peru. In the meantime, the CDM commissioned a technical paper and launched a consultation process for governments and other stakeholder.

CDM projects have come under fire in recent years for failing to offer in reality the emissions cuts they are supposed to represent, and for ignoring human rights and environmental abuses in countries where projects are set up.

Eva Filzmoser, director of Carbon Market Watch said, “The credibility of the CDM is at an all-time low so these recommendations are critical to ensuring that future projects drive real emissions cuts and don’t lead to some of the shocking human rights and environmental abuses we have seen in recent years. The CDM has also got to get to grips with the problem of projects being funded that would have happened anyway. We hope these proposals are taken seriously and that this consultation process is, at last, the beginning of real reforms.”

The key recommendations from Carbon Market Watch and other expert groups include:

Ensure net atmospheric benefits: include provisions for net atmospheric benefits through the CDM; and elaborate on the specifics of how such net benefits will be monitored and verified;Improve civil society participation in the CDM process: clarify and strengthen the requirements for stakeholder involvement including the incorporation of best practice guidelines for local stakeholder consultation; and establish a communications channel for case specific matters, both before and after the registration of CDM project activities and Programmes of Activities (PoAs);Establish an effective grievance mechanism: introduce international safeguards similar to those  provided by the REDD+ framework for forestry to be applied when financing and undertaking CDM project activities and PoAs; introduce a procedure for the CDM Executive Board to forward concerns about social and environmental impacts of specific CDM project activities to the relevant Designated National Authorities (DNAs) for investigation and assessment; introduce best practice guidance for national effective grievance mechanisms; introduce reporting requirements for national level grievance processes to international bodies; and ensure that the appeals procedure is swiftly implemented;

Strengthen the role of host countries in guaranteeing sustainable development: require that DNAs make their sustainable development benefit indicators publicly available at national and international level; include mandatory requirements for monitoring, reporting, and verification of sustainability benefits; exclude project types that support technologies or practices with high GHG emissions and that are associated with other high environmental and social costs (e.g. projects that support the extraction and use of coal)

Ensure projects lead to emissions savings that wouldn’t have happened anyway (additionality): exclude project types with a low likelihood of additionality or high risks of perverse incentives; exclude project types where additionality is difficult to determine; additionality should also be reassessed at the renewal of the crediting period;

The paper also recommends shortening the length of the crediting period for projects, changing auditing procedures for projects and putting in place new requirements for the membership and composition of the CDM’s executive board.

The possible changes to these recommendations will be discussed at the upcoming UN climate change conference from 4-15 June in Bonn with a final decision expected in November 2014.

To read the full submission, click here.

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