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Policy Brief: Hydro Power Projects in the CDM


The Clean Development Mechanism (CDM) was designed to bring clean and sustainable development to poor countries while enabling rich countries to achieve their emissions reductions cost efficiently. Hydro power makes up 30% of all carbon offsets projects registered under the CDM. Despite delivering renewable energy, these projects have faced sharp criticism for their failure to reduce emissions and for negative social and environmental impacts.

The recent Study on the Integrity of the Clean Development Mechanism commissioned by the European Commission singles out hydro power projects as particularly problematic. This policy brief outlines the impacts of large CDM hydro power projects, explains why they undermine climate goals and offers concrete policy recommendations.

Our Recommendations:

  • Swiftly implement the recommendations of the CDM integrity study;
  • Implement a negative list that excludes large hydro power CDM project offsets from the EU. It is highly unlikely that large hydro CDM projects are additional. Moreover, additionality testing under the current UNFCCC rules is ineffective for such large infrastructure projects.
  • Require small CDM hydro power projects to fulfill World Commission on Dams (WCD) sustainability criteria. Since hydro power projects of all sizes and types can have substantial, and sometimes severe, negative social and environmental impacts, all hydro power projects should be evaluated for their social and environmental impacts.
  • Strengthen the EU’s assessment of WCD compliance. The EU’s efforts to operationalise the WCD guidelines are commendable but current rules and procedures do not to fully capture the criteria set out in the WCD.

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