The paper argues for a geopolitical perspective of the climate change regimes historical-materialism. By doing this the State and Non-State actors who have formed the regime and adopted its guiding principle of „sustainable development? may be engaged with and problematised. The international response to global warming is as much about climate change as it is about competing factions of political-economic „elites? as the phenomena becomes a method to stimulate Foreign Direct Investment in the larger developing economies, characterised as the „BICs? (Brazil, India, China). Critical stagnating literature on the CDM and its neoliberal market-environmentalism basis is shifted on to account for the new geopolitical configuration of the world’s political-economic „elite?. The paper adopts three methods. (1) A literature review allows process-tracing and position-triangulation. (2) Key Informant interviews are used to test these positions and gain practical insights to the process. (3) Empirical analysis of CDM project transactions is used to illustrate the complexity and nature of the CDM.

Download dissertation here.

The Environmental Investigation Agency (EIA) has published a response to the World Bank’s Q&A on HFC-23. Below the Executive Summary.

You can download the pdf file here.

Executive Summary: The United Nations Clean Development Mechanism (CDM) was created in 2003 to allow emission-reduction or removal projects in developing countries to earn carbon credits, each equivalent to one tonne of CO2. These certified emission reduction (CERs) can be traded and sold, and used by industrialized countries to a meet part of their emission reduction targets under the Kyoto Protocol. Since that time, CDM projects have generated almost 430 million offsets or CERs.

The World Bank’s Umbrella Carbon Facility is invested in two of the most lucrative HFC-23 incineration projects. In 2006, the Carbon Facility contracted to purchase almost 130 million CERs, worth 775 million Euros (US $ 980 million) from two HFC-23 incineration projects in China – Jiangsu Meilan Chemical Co. Ltd. (CDM project #11) and Changshu 3F Zhonghao New Chemicals Material Co. Ltd (#306). Both of these plants have been identified as operating to maximize generation of HFC-23 up to the level that it receives CERs, resulting in superfluous (fake) carbon credits as detailed in the Revision Request for the HFC-23 Destruction Methodology and as set forth below.

In April 2010, a Revision Request was submitted to the CDM Methodologies Panel that provided strong evidence that HCFC-22 manufacturers are likely to manipulate their operations to increase the amount of HFC-23 generated for destruction and subsequent crediting with CERs. Using the plants’ own submissions to the CDM, the Revision Request documented that for many plants the amount of HCFC-22 and HFC-23 generated corresponds to the amounts that are eligible for gaining carbon credits. Two plants produced lower rates of the HFC-23 waste product during periods where no carbon credits could be claimed, and increased their waste production once carbon credits could be gained. In several plants, the HCFC-22 production corresponded each year to the amount that is eligible for crediting, while lower or more variable amounts were produced before the carbon credits could be generated. Subsequent letters and public statements from environmental organizations have protested the CDM sanction of tens of millions of phony carbon credits and insisted that the HFC-23 Methodology be revised to remove the perverse financial incentives responsible.

In response, the World Bank posted a Q & A on their website, defending the HFC-23 Destruction Methodology, and by association their investment in HFC-23 CERs, and dismissing the entire body of evidence documenting the widespread abuse among CDM HFC-23 projects. The World Bank Q & A fails to provide the information needed to understand the HFC-23 controversy, ignores some key findings by relevant institutions such as the CDM Methodologies Panel and the Montreal Protocol’s Technical and Economic Assessment Panel (TEAP), and does not address or discuss many of the issues identified in the revision request. The World Bank Q & A is based on an astonishing amount of false or misleading information, and utterly fails to examine any of the wider issues at stake.

The dismissive nature of the World Bank’s statement is surprising in light of the fact that the UN CDM Executive Board has started an investigation of the key concerns that has not yet been finalized. On 18 August 2010, the World Bank’s Changshu Zonghao project’s request for the issuance of 3,260,020 CERs was delayed pending a detailed investigation of the exact issues that the World Bank has cavalierly dismissed. As of 25rd August, in total six HFC-23 CDM projects are under investigation, questioning the issuance of more than 9 million CERs.

Commissioned by WWF, the Öko-Institut analysed, for the second time, to what degree DOEs (Designed Operational Entities) fulfill the requirements of the UNFCCC CDM Executive Board (EB). More than 900 projects have been evaluated for this analysis. The rating is based on a statistical evaluation of decisions by the EB on projects that were validated positively by a DOE and which are later either registered, rejected, reviewed or requested for correction by the EB.

The work of evaluators who assess greenhouse gas offset projects in developing countries in the framework of the Clean Development Mechanism (CDM), has not improved. On the contrary, a yearly assessment by WWF shows that the work of the certification agencies is in fact often criticised by the UN: on a scale from A (best) to F (worst) the ‘best’ grade was a D, which was awarded only once.

Download the 2010 Rating of DOEs here

Under current rules, the 19 registered HFC-23 destruction projects are expected to generate about 478 million CERs by 2012 and more than one billion CERs by 2020. In 2009 European installations surrendered 46,364,460 HFC-23 CERs, worth an estimated €552 million2. However these CERs, which constitute the majority of offsets used by European companies (59% in 2009) to address their emissions reductions so far, do not contribute to sustainable development, and are so fundamentally flawed that they risk undermining the environmental integrity of the ETS as well as the CDM.

Download HFC23 Policy Briefing here

SANDBAG has published its newest report on offsets in the EU: International Offsets and the EU 2009: an update on the usage of compliance offsets in the EU Emissions Trading Scheme - by Rob Elsworth and Bryony Worthington

The report is based on a consolidated database of information about the use of certified emissions reductions (CERs), which were generated by clean development mechanism (CDM) projects, in the EU Emissions Trading System in 2009.

Download Report here

When creating the Clean Development Mechanism (CDM), the Kyoto Protocol described three main aims: meeting greenhouse gas reduction targets, sustainable development, and providing emissions cuts for the lowest cost. This study argues that these three aims represent powerful discourses, justifying the European Union’s continued reliance on offset credits from the CDM. Furthermore, when advising policy-makers, NGOs may find it difficult to overtly oppose offsetting due to the power of these ideas. However, it also argues that these three discourses may provide some opportunities for NGOs to form new narratives, highlighting some of the contradictions inherent in offsetting.

Download pdf here

Deutsche CDM-Projekte und staatliche Steuerung der Projektnutzung – Nicola Jaeger, Berlin 2010.

This thesis offers a comprehensive and well-researched overview of the CDM and its current situation in Germany. Analysing current academic discussions, the author critically looks at market-based approaches to the climate crisis and international politics. Particular focus is on the qualitative and quantitative aspects of German CDM project activities.

download pdf file

download pdf file

An in depth look into measuring additionality from studies in India’s electricity sector and other Chinese and Indian project documents by Barbara Haya at UC Berkeley’s Energy and Resources group.

Some snippets:

“Our inability to accurately measure how much individual projects reduce emissions, compounded by the current and future use of offsetting credits by industrialized countries, risk substantially undermining the effectiveness of the post-2012 climate change regime and our ability to control global greenhouse gas emissions. Any offsetting mechanism included post- 2012 will need to:

• 
  include an alternative means for targeting projects and activities that will affect emissions
• trajectories without testing additionality on a project-by-project basis, a process which is essentially subjective and inaccurate;
• 
  be predictable, providing certain benefits to those depending on it; and
• 
  be small in the context of deeper Annex 1 targets.

…

Both the large-scale use of offsetting to meet industrialized country targets and the continuation of project-based offsetting risk undermining the ability of global climate change agreements to control greenhouse gas emissions.”

Analysis by Stanford Environmental Law Clinic. Dowload pdf file:

Download here

download pdf file

From the Center for Investigative Reporting in Berkeley, California, Mark Schapiro recounts his inside stories  with validators, DOEs, a Brazilian Executive Board member, and NGOs about non-additionality of the CDM in a February 2010 edition of Harper’s Magazine.  His findings epitomize regressive climate change policy where emissions tend to increase instead.

Trading on the carbon market seems to be the priority for auditors, carbon trading multinational corporations, validators, verifiers and project developers; they’ve all got their feet in two places in the process of racking up CERs.  Plenty of claimed emissions reductions escape thorough scrutiny of the EB, but counterfeit emissions reductions that are later found to be unverified cannot be taken back, since after validation, these credits are secured to be passed off from trader to trader as a futures contract.  As you can guess, the ultimate result of the conflicts of interest among these groups combined with investors’ perverse intentions for profit is an abuse the CDM’s authority and fake emission reductions.