The global system which is supposed to cut greenhouse gases is being gatecrashed by hundreds of projects which will actually increase the net amount of carbon being released into the atmosphere, according to a report published today.
As the latest UN conference on climate change opens in Bali, the report from the International Rivers NGO warns of a surge in the number of hydropower developers attempting to enter the UN’s Clean Development Mechanism, which allows organisations in the developed world to emit extra greenhouse gases by paying for carbon credits to fund third-world schemes which cut emissions.
The report, Failed Mechanism, claims that the great majority of these hydro projects, in China, South America and Africa, are using ‘Alice in Wonderland’ arguments to pretend that they are cutting emissions. The hydro companies can then earn millions of dollars by selling fake carbon credits to companies and governments in the developed world who can use them to justify increasing their emissions.
“Public and private money that should be supporting decarbonisation in developing countries, is flowing into the coffers of hydropower developers with the only effect on emission levels being to increase them,” according to the report. “How wise is it for the main mechanism supporting climate change mitigation in developing countries to be standing on a foundation of lies?”
All projects applying to join the Clean Development Mechanism must show that if they are allowed to sell carbon credits, they will produce cuts in emissions which are additional to any they would produce if they simply went about their business as usual. International Rivers argues that the great majority of hydro projects fail this ‘additionality’ test: “Most credits that may be generated by these projects should therefore be considered to be ‘hot air’ – fake credits which will increase global greenhouse gas emissions.”
They point out that for years the Chinese government has been committed to hydropower. Yet, their hydropower developers are now trying to persuade the CDM that, without funding from carbon credits which have been available only since January 2005, they cannot proceed. “The apparent collapse in Chinese hydro developers ability to implement projects without carbon finance can only be explained as an artifact of creative writing.”
They also stress that almost all of the hydro projects which have been accepted by the CDM were already under construction before the developers applied; and a third of them had already been completely built: “Since construction began well before CDM registration, it is clear that these projects still would go ahead even if they were not successfully registered as CDM projects.”
The report cites the case of the Sondu Miriu hydro project in Kenya. Its loans were secured in 1997, ie eight years before the launch of CDM carbon credits; its construction began in 1999: and yet last year, it applied to the CDM on the basis that it went forward only on the basis that it would earn income from carbon credits. Similarly, the Campos Novos Dam in Brazil went into construction in 2001, was completed in 2005, started generating electricity in May 2007 and is now trying to claim the right to sell carbon credits by arguing that it would not have been developed without their expected income.
The number of hydro projects applying to the CDM has doubled every six months since the scheme started three years ago. They now account for a quarter of all projects in the CDM pipeline: 507 hydro applications are being considered by specialist validation companies; a further 147 have already been accepted. Well over half of the projects are Chinese.
The report says: “”Hydro developers are repeatedly justifying their applications to the CDM with surreal arguments… Even worse is that the validation companies and the CDM’s executive board seem prepared to endorse such Alice in Wonderland arguments. Validation companies appear to focus on making sure that project developers have all their forms properly completed, rather than providing independent and thorough audits of the developers’ claims.”
The report’s author, Barbara Haya, told the Guardian that if the hydro projects continue to persuade the CDM to accept them, they will end up claiming to be cutting global carbon dioxide emissions by 58.5 million tonnes per year. By selling their carbon credits, they will allow factories and other organisations in the developed world to exceed their current limits. If in truth the hydro projects are providing no additional cuts in emissions, the net effect will be to increase global greenhouse gases by 58.5 million tonnes a year.
The report follows a Guardian investigation in June which found evidence of gross incompetence, rule-breaking and possible fraud in the Clean Development Mechanism with faults in up to 20% of the certified emission reductions which had been sold. These license the emission of millions of tonnes of extra greenhouse gases in the developed world on the apparently phony basis that those emissions were being offset by schemes in the third world which were reducing their output of carbon.