CDM process to streamline, challenges remain

The CDM pipeline will become more streamline but challenges remain, an industry event heard today.

Lex de Jonge, chair of the clean development mechanism (CDM) executive board, told Carbon Expo that the UN panel had made many improvements that should speed up the process of getting carbon credits.

De Jonge listed a string of measures the EB has either taken or will take.

These include:

• Doubling the number of approved verifiers;
• A launch of a standard manual for auditors;
• An improvement in consultations with stakeholders; and
• A streamlining of procedures for reviewing projects.

The latter point referred specifically to transferring some checks when reviewing projects from the board to the UN secretariat.

This relates to the “completeness check” procedure.

Blind eye

But the most controversial of the board’s proposals is a measure adopted only this week by the UN panel.

In principle this agrees to turn a blind eye to minor changes to CDM projects after they have been registered - but only if this alteration is judged to be sufficiently small.

Historically, this has been a bone of contention for developers, who claim their projects can be held up for months over very minor issues.

“We have agreed in principle, but we are not sure where to draw the line. We will come back to this,” de Jonge said.

One developer sitting on the panel with the EB chair said she welcomed the changes, but that some issues remained unresolved, namely the lack of an appeal procedure for EB decisions.

“We do not have an appeal process that is strong enough to address our concerns,” Susanne Haefeli of Swedish carbon fund Tricorona told the event in Barcelona.

Copenhagen

A reform of the CDM and the offset market is one of the major debates to be held at UN climate talks in Copenhagen in December this year.

But participants at the conference voiced the view that future demand for offsets could overwhelm supply and doubted the CDM was the right tool to deliver billions of credits each year.

The US cap-and-trade bill, currently working its way through Congress, could spur demand for up to 2 billion carbon credits per year, the same number of credits that the CDM is likely to supply over five or six years, de Jonge said.

But it is not just concerns over potential supply that may deter the US from accepting the credits in a federal carbon market.

Criticism

The mechanism, which is the Kyoto protocol’s main tool to help developing countries cut emissions, came under fire last December from US lawmakers, who questioned the environmental integrity of the scheme.

But in response to US criticism, de Jonge acknowledged the CDM was not perfect, but nowhere near as bad as many policymakers in the US think.

“Perhaps up to six per cent of projects that were automatically approved should have gone through the (CDM) review process,” he said.

“Some things were not working in the early years and not everything was as rigorous as it is nowadays,” he said.