Issues Up For Discussion at CDM Executive Board Meeting

This week the Clean Development Mechanism  (CDM) Executive Board is meeting to discuss a number of issues. Of interest to International Rivers are the discussions around project-by-project additionality, treatment of environmental laws in host countries, a future CDM appeals procedure and enhanced communication with stakeholders.

 Additionality

The CDM is based on the flawed concept of additionality, as International Rivers has discussed numerous times (see here and here)  Additionality can be demonstrated using three approaches:

• Barrier analysis to demonstrate that barriers exist, which would prevent the proposed project;
• An investment analysis to demonstrate that the project is economical less attractive than other projects;
•  A common practice analysis to demonstrate that the project is not common.

These approaches are highly subjective. Every project in the world faces potential barriers, but most manage to move forward. The books can be cooked to show that a project is not economically viable. And as far as the common practice analysis goes, it is amazing how many Chinese and Indian hydropower projects have gotten away with using this argument to prove additionality!

We are curious to see how and if the Board can find a way to address the flaws with these tests.

National Environmental Laws

Last December, a number of wind projects in China were rejected because feed-in tariffs were lowered to ensure that the projects would appear to not be economically viable. A feed-in tariff is an excellent policy that makes renewables competitive with conventional energy sources. But the CDM provided a perverse incentive for the Chinese government to change a good policy so that projects could qualify for the CDM. In this case we have a double whammy – non-additional credits get through, which cheat the environment, and a good environmental policy is weakened.

Another sticky problem for the Board to deal with. It is becoming clear that due to the flawed concept o fadditionality, the Board has to confront increasingly sticky and complex problems.

CDM Appeals Procedure

With our partners in CAN, we submitted comments on a stakeholder appeals procedure. Some of the recommendations we made include:

• The right of stakeholders to appeal must be implemented as broadly as possible;
• Appeals should be allowed on projects that have been approved following a review, as well as rejected projects;
• If there is concern that the DOE has not performed its duties, an appeal must be allowed;
• If new information comes to light that puts the additionality of a project in question, an appeal should be allowed at any time;
• The appeal must be made publicly available.

Enhanced Communication with Stakeholders

Our friends at CDM Watch have submitted a letter to the Board providing valuable suggestions for improving communications to stakeholders. Their recommendations include:

• Setting up an email notification system;
• Increasing public commenting periods;
• Translation of documents into local languages.

For further information on other issues that the Board will be discussing this week, check out CDM Watch's latest newsletter.