A fifth of U.N. carbon credits may be bogus

LONDON (Reuters) - 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 pollute.

"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 this year.

"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.