The CDM: Kyoto's Carbon Offsetting Scheme

The Clean Development Mechanism (CDM) was established under the Kyoto Protocol. It is by far the largest global carbon offsetting system. It is intended to lower industrialized countries’ costs of cutting greenhouse gas emissions by allowing them to purchase "carbon credits" that subsidize supposedly low–carbon “sustainable development” projects in developing countries.

International Rivers’ experience in monitoring CDM projects has shown many serious flaws in its theory and application. Project proposal documents are marred by misleading and often patently false claims. International Rivers and others have explained these problems in numerous comments on specific hydro projects submitted during the CDM project approval process.

Many of the projects proposed (and many of those approved) for CDM credits are “non-additional.” This means that they would have taken place without help from sales of carbon credits. The end result is that developed countries are avoiding having to reduce their own emissions by claiming credits for fictitious emission reductions.

The hydropower industry is particularly culpable in cheating the CDM system. By 1 November 2008, 1103 hydro projects with an installed capacity of 39,020 MW had applied for credits, almost two-thirds of them in China. International Rivers maintains a spreadsheet with data on hydropower projects in the CDM project pipeline. If the UN body that administers the CDM approves these projects the hydro industry will make billions of dollars from the Northern consumers and taxpayers who will indirectly pay for the credits. Meanwhile the global climate – and the effectiveness and credibility of the Kyoto Protocol – will suffer.

Many observers agree that the supposed “sustainable development” benefits of the CDM have failed to materialize. Only a tiny minority of credits are being purchased from “additional” sustainable energy projects with clear environmental and social benefits.

A European Union law called the Linking Directive regulates the use of CDM credits within the EU’s internal carbon trading system. The directive states that large hydro credits entering the European Trading System must comply with the criteria and guidelines of the World Commission on Dams. To date, none of the large hydros in the CDM pipeline have proven WCD compliance.

LATEST ADDITIONS:

Climate and Human Rights

Decisions on the CDM in Poznan

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Clean Development Mechanism: Dump It, Don't Expand It

German Utility RWE Meets Climate Targets by Supporting Forced Evictions in China

More information:

"Rip-Offsets: The Failure of the Kyoto Protocol's Clean Development Mechanism," a video slideshow about the CDM featuring Barbara Haya

Factsheet on the CDM

"Bad Deal for the Planet: Why Carbon Offsets Aren't Working...and How to Create a Fair Global Climate Accord." International Rivers' 2008 "Dams, Rivers and People" report.

Carbon trading and offsets critiques from UK think-tank The Cornerhouse

SinksWatch: An initiative to track and scrutinize carbon sink projects