Many CDM projects fail to meet required standards

29.11.2007

In a new report, Öko-Institut criticizes the reliability of validating companies and recommends improvements

The Clean Development Mechanism (CDM) is a flexible mechanism under the Kyoto Protocol that allows countries and businesses to offset their emission reductions from greenhouse gas (GHG) abatement projects in developing and newly industrializing countries. There are two key criteria which these CDM projects must fulfil. Firstly, the project must genuinely reduce greenhouse gas emissions. Secondly, in its implementation, it must comply with environmental, social and financial standards defined by the host country to ensure that a CDM project contributes to sustainable development. But are certified CDM schemes meeting these criteria in practice? That question was addressed by the Öko-Institut in a new report prepared for the WWF, which will be unveiled in Brussels today. "There are serious shortcomings as regards the environmental integrity of CDM project implementation", says Lambert Schneider, expert in international climate policy at the Öko-Institut and author of the report.

"In very many cases, it is questionable whether the criteria set by the UN and the host country are genuinely being fulfilled", laments Schneider. According to his analysis, one problem lies with the Designated Operational Entities (DOEs) – the specialist companies which are responsible for the validation of proposed CDM project activities and the verification of emission reductions. "For example, the documentation produced by the DOEs is often very poor and does not show which of the criteria has been met. Unfortunately, that casts doubt on the DOEs' reliability." In Schneider's view, "the environmental integrity of CDM projects must definitely be improved." The Öko-Institut makes various recommendations here, including

• Development of clear guidance for DOEs, with tough penalties for non-conformities and non-compliance in future. At present, detailed standards and instructions as to what exactly should be assessed by DOEs as part of the validation and verification process are not yet available.
• The current criteria for approval of CDM projects must be improved and developed further; this should include, for example, the adoption of specific reference figures for the CO2 reductions that the project must achieve.
• Beyond 2012, it should be determined whether the CDM can move away from a project-based mechanism towards sectoral approaches.

You can read about the other recommendations in the full report, Is the CDM fulfilling its environmental and sustainable development objectives? An evaluation of the CDM and options for improvement prepared for the WWF. It can be downloaded free of charge here >>

Contact

Lambert Schneider
Öko-Institut, Berlin Office
Energy & Climate Protection Division
E-Mail Contact