CDMs Don’t Work – Fix Them or Lose Them

>CDMs (Clean Development Mechanisms) aren’t working; and won’t – unless they are buttressed by a strong regulatory environment that independently ensures best practices in energy generation. Designed to increase the flow of money from developed to developing nations, and to minimize the cost of carbon mitigation, CDMs allow firms in developed countries to invest in carbon-reducing projects in developing nations and claim the reductions themselves. Caveats aside (additionality is hard to measure, etc.), the core idea behind CDMs is sound.

But that’s all gone wrong. Here’s one clear example (culled from this original article:

Operating coal plants in England can use CDMs to offset their emissions, while the money raised is used to build more coal plants in the developing world. So one plant offsets its emissions by funding more emissions somewhere else. Sound crazy? It’s really happening – the trick is to use the CDM money to build “super-critical” coal plants (ie modern ones that reduce the total C02 emissions by up to 30%) rather than old-fashioned ones. The additional cost is considered a carbon reduction. Paper-pushing nonsense.

Why on earth one would be ALLOWED to build non-super-critical coal plants in the first place (or coal plants at all, but that’s a hard line required by the science and not yet accepted by politicians) is beyond me. But the difference between “best practices” and what energy developers could get away with is seen as reasonable offsets. Absolute nonsense.

If CDM’s are to put off the tough regulatory decisions that require best-practices, then they are a sham. Worse, if they are used to help build C02-emitting infrastructure that will last for many decades – rather than carbon-neutral energy projects – their philosophical basis is completely undermined.

Sure, let’s use CDMs. But let’s ensure they are in addition to a strong, supportive regulatory environment that eliminates the temptation to do what we’ve done in the past – build on the cheap, let the risk pass to the future.

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