LONDON A United Nations climate panel will ask a working group to investigate further claims that a Kyoto Protocol scheme may be incentivizing participants to emit more greenhouse gases, it said on Friday.
Several carbon-cutting projects approved under Kyoto's $2.7 billion Clean Development Mechanism (CDM), which helps provide carbon finance to emerging economies, have been accused by green groups of intentionally increasing their emissions in order to destroy them and collect more carbon offsets.
The panel is probing roughly 20 projects and they are the most lucrative under the scheme. Most of them are in China and India. They eliminate a potent waste gas called hydrofluorocarbon (HFC) and account for more than half of the 423.5 million offsets issued to the 2,300 projects approved to date.
One molecule of HFC gas traps around 12,000 times more than a molecule of carbon dioxide (CO2).
The CDM's 10-member executive board, meeting in Bonn, Germany this week, said it will seek further input on the matter from the scheme's methodology panel
"It's clear that these projects are preventing a great deal of a very potent greenhouse gas from entering the atmosphere. However, it's prudent that the board look at whether the safeguards built into the methodology are still sufficient to prevent perverse incentive, or need to be adjusted," said Clifford Mahlung, chair of the CDM's executive.
Green groups including CDM-Watch and Noe21 have accused HFC project owners, mainly refrigerant gas manufacturers, of "gaming" the system and have called for the UN to suspend the issuance of offsets under the its methodology for HFC projects.
"We welcome the board's decision to officially launch an investigation. However we are concerned that, without a suspension of the methodology, this could be used to delay taking necessary action," said Chaim Nissim of Noe21.
The methodology panel, after considering a submission made by CDM-Watch earlier this year, raised concerns in a report on July 1 but said more investigation was needed.
We're following the advice of our methodologies panel and have asked the panel to fill the information gaps they've identified," Mahlung added.
The report said there was a strong incentive to avoid improving the plant's efficiency during any refurbishments because of benefits from the CDM.
REJECTIONS AND SUSPENSIONS
The CDM's board also rejected 22 projects seeking approval under the scheme, citing in most of the cases a failure to demonstrate they were not viable without receiving offsets, so-called 'additionality'.
The rejected projects included 10 wind farms and nine hydro power projects in China, and were expected to generate a total 12.5 million carbon offsets by the end of 2012.
UN data showed the projects' investors included Goldman Sachs, Credit Suisse, Austria's Kommunalkredit and London-based Carbon Resource Management.
The CDM's board also said it lifted suspensions on two emissions auditors, Germany's TUEV-SUED Sud and South Korea's KEMCO. Both were suspended in March for procedural breaches and concerns over personnel qualifications.
The executive said it will conduct another spot-check at auditors Det Norske Veritas (DNV), which was suspended for three months in late 2008.
(Reporting by Michael Szabo; Editing by Sofina Mirza-Reid)