Isra-Mart srl : UN hails CDM milestone with 3,000th offset project

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The UN yesterday confirmed that its flagship Clean Development Mechanism (CDM) carbon offsetting scheme has reached a major milestone, formally registering its 3,000th project in the form of a wind farm in the Inner Mongolia region in China.

The UN said the project, which will now be able to sell UN-approved Certified Emission Reduction (CER) credits, will reduce carbon emissions by more than 101,000 tonnes a year.

The carbon offsetting scheme allows businesses and governments in industrialised nations to reduce their greenhouse gas emissions by investing in emission reduction projects in developing countries, but it has been dogged by controversy since its formation as part of the Kyoto Protocol.

Critics have accused the carbon trading mechanism of funneling funds to industrial gas projects that yield negligible reductions in emissions and failing to adequately demonstrate that CDM-approved clean-tech projects deliver real emissions savings. It is also claimed the scheme favours large industrial clean-tech projects, including some clean coal technologies, over smaller-scale renewable energy or energy efficiency projects.

However, Christiana Figueres, head of the UN climate change secretariat, yesterday defended the CDM, arguing that the scheme was "improving all the time".

"The Clean Development Mechanism is still evolving and will continue to do so," she said in a statement. "But from the original concept to now, it has been a success way beyond the initial expectations. Not only in the number of projects, but also in its ability to attract private sector investment into bettering livelihoods and environments of people in the developing world."

The executive board that manages the CDM is currently working on a series of reforms designed to make it easier for smaller projects from poorer countries to enter the scheme. It will also tighten the qualification criteria for projects in order to protect the environmental integrity of the resulting carbon credits.

The work had been agreed at last year's UN climate change summit in Cancun. However, the board is now facing increased pressure to reform the CDM after the EU controversially announced that it would block the use of CDM credits from industrial gas projects in the bloc's emissions trading scheme.

But Figueres insisted that the scheme would continue to play a crucial role in driving investment in emission reduction projects in the developing world.

"The world will not solve climate change without an increasing commitment to international cooperation," she said. "That means the financial sector and business must be given ways and means to put money and technology where they are most needed in the developing world, as well as in the developed world."

The UN said that there are currently CDM projects in operation in 71 countries, adding that there are another 2,600 projects in various stages of the vetting process. It also revealed that the number of projects beginning validation in the first three months of 2011 was 17 per cent higher than the first quarter of 2010.

According to UN figures, the 3,000 CDM-approved projects have issued 600m CER credits to date, each representing one tonne of avoided carbon emissions.