LONDON One in five carbon credits issued by the
United Nations are going to support clean energy projects that
may in fact have helped to increase greenhouse gas emissions,
environmental group WWF said on Thursday.
The United Nations runs a scheme under the Kyoto Protocol
that allows rich nations to invest in clean energy projects in
developing countries and in return receive certified emissions
reduction credits (CERs) to offset their own emissions.
But WWF said in a report that the credits are being
delivered to projects that would have gone ahead anyway, even
without the extra incentive provided by U.N. approval under the
scheme, called the Clean Development Mechanism (CDM).
The report, prepared by Germany's Oeko Institute for
Applied Ecology, said projects lacking this so-called
'additionality' help increase gases blamed for global warming
by giving firms a spurious justification for continuing to
"One out of five emissions reductions credits sold under
the Kyoto Protocol's Clean Development Mechanism (CDM) lack
environmental integrity," WWF said in a statement.
It said the problem damages the global carbon market, which
is expected to more than double in value to around $70 billion
"The CDM is a new and very important tool and needs to be
fine-tuned to reach its purpose," Stephan Singer, head of WWF's
European Climate Policy Unit, said in a statement.
The report recommends improvements in the CDM, a market
worth some $5 billion in 2006 according to the World Bank.
Strengthening procedures and increasing controls of the
bodies that verify the projects are among changes that WWF
hopes governments will discuss next week at a U.N. climate
conference in Bali, Indonesia.
"Promoting sustainable development... seems to have been
largely forgotten by project developers, verifiers, and the CDM
Executive Board," the report said.
"The same is true for stakeholder consultation, considered
by project developers as a burden rather than an opportunity to
gain public acceptance."
The U.N.'s CDM scheme also works with the European Union's
emissions trading scheme, the 27-nation bloc's flagship program
to help meet commitments under Kyoto.
In phase 2 of the European Union scheme, lasting from
2008-12, countries are able to import around 10 percent of
their required credits from UN-approved projects, amounting to
an expected market demand of up to 280 million CERs per year.
WWF proposes that the EU should limit the importing of the
U.N. scheme's CERs to those certified by the Gold Standard, a
quality label developed with help from WWF and endorsed by some
45 non-governmental organizations worldwide.
Gold Standard-certified CERs can fetch between 26 and 28
euros, well above EU credits and ordinary secondary CERs, which
trade around 23 euro and 18 euro respectively.
But of the near 94 million CERs issued by the U.N.'s
climate change secretariat to date, only around 72,000 are Gold
Standard-certified, with a further 3.5 million per year
expected to 2012.
This compares with more than 500 million CERs expected
annually from some 2,600 projects already in the U.N.'s
To read the WWF report or for additional analysis on the
carbon markets, click on www.reutersinteractive.com
(Reporting by Michael Szabo; Editing by Anthony Barker)