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ENVIRONMENT: Development Mechanism Far from Clean

Sanjay Suri

LONDON, Oct 1 2004 (IPS) - It is called the Clean Development Mechanism, and is one of the principal tools to turn the Kyoto Protocol into reality on the ground – or in the air.

The Kyoto protocol expected to come into force by the end of the year following ratification by Russia sets out three mechanisms to reduce emission of greenhouse gases (like carbon dioxide and methane thought to lead to global warming) from industry and transport: emissions trading, joint implementation and the clean development mechanism (CDM).

The Kyoto protocol would apply only to countries that have ratified it from among a list of 38 industrialised countries. But the CDM ropes developing countries into the bargain indirectly.

At the heart of all three mechanisms are ways in which companies in the north can continue to pollute as before, but find other ways to offset this pollution.

The joint implementation (JI) facility allows the 38 industrialised countries listed in Annex 1 of the United Nations Framework Convention on Climate Change to implement projects that reduce emissions or provide for carbon removals in other Annex 1 countries. The Annex 1 countries were listed under the UN convention under which most countries agreed in March 1994 to take action to contain climate change attributed to industrial activities.

A German automobile firm can for instance take measures to reduce emissions at one of its plants in Britain, and this reduction would be to its credit within a rating system that gauges emissions and the steps taken to reduce them.

In effect, however, JI would cover mostly industrial investments in Eastern Europe where the cost of technology and other steps to reduce emissions would be less. The pollution through plants at home could continue as usual while the company meets its obligations to cap emissions through project in an East European country at lower cost.

The CDM extends this principle to developing countries. A country from the North can take on a project in the South with claimed emissions capping facilities built into it. ”The certified emissions reductions (CERs) generated by such projects can be used by Annex 1 parties to help meet their own emissions targets,” the Protocol says.

There is no way of knowing yet how the CDM will work, says Greenpeace climate campaigner Steve Sawyer. ”But with the Russian move to ratification we will have at least a chance to determine whether it will be useful or not,” he told IPS. ”Until then it is just an idea.”

Much will depend on how rigorous the methodologies are that measure emissions related to these projects, Sawyer said. ”Many want to be in the CDM pipeline but so far very few types of projects have been chosen, like treating methane gas from land refills and refrigeration technology,” Sawyer said.

The Kyoto Protocol says the CDM is ”expected to generate investment in developing countries, especially from the private sector, enhance the transfer of environmentally friendly technologies and promote sustainable development in general.”

The claim that the CDM will be productive for domestic partners also remains to be tested, Sawyer said. ”Technology transfer has been much talked about but very little operationalised.”

Recent amendments of the CDM mean that companies from the North may not always have to offer technology to partner firms in developing countries. They can earn emissions certificates by planting trees instead.

It is not clear also who will award the certificates, and on what kind of measurement. The Protocol says companies proposing a CDM project must first prepare a project design document that will then be validated by ”an operational entity” and then monitored by ”a different operational entity.” This entity will then produce a verification report, and ”if all is well, will then certify the emission reductions as real.”

But any additional emissions-cutting technology introduced by companies from industrialised countries in developing countries will come at a cost. CDM projects could mean that companies in developing countries end up paying towards the increased cost of new technology in a project in their countries. Developing countries would then carry the burden of emissions reduction costs even though the Kyoto protocol formally exempts them from these measures, since the bulk of emissions come from industrialised countries.

The Protocol says that ”although the cost of limiting emissions or expanding removals varies greatly from region to region, the effect for the atmosphere is the same regardless where the action is taken.” The CDM is intended to offer companies a cheaper way of meeting their requirements. But a wide gap remains as yet between the intention and implementation with verifiable results.