Upsetting the Offset - Transnational Institute

Upsetting the Offset
obligations. They also had significant support, at least until the US pulled out of
Kyoto in March 2001, from most European countries.
As a consequence of the sustained pressure, and political alliance building,
such concerns, along with the technical problems in measuring sinks compared
to measuring emissions, resulted in rules which have made such projects
extremely difficult to get approved in the CDM processes, and only a small
handful of CDM projects are in forestry as a consequence. ‘Avoided
deforestation’ projects were excluded entirely, and the rules for other types of
forestry projects (deforestation, reforestation, afforestation) were written to be
very tight. Countries could have a maximum of 1% of their 1990 emissions
mitigated by such projects. 7 In fact, the numbers have come in well below this
amount: in 2007 under 1% of the CERs issued were in forestry projects (as
compared to around 30% of projects in the voluntary carbon markets). 8
Of course, carbon traders and project developers don’t like the virtual
exclusion of forests from the CDM. They include this question in their
recurrent attacks on the CDM institutions for their (alleged) rigidity. And
forestry is back on the CDM agenda for the post-Kyoto period, in the way that
the debates about Reduced Emissions from Deforestation and Forest
Degradation (REDD) are being articulated. It is not yet clear what way these
negotiations will go, but there is great pressure from business actors to link
REDD to the CDM given the market opportunities this creates for the carbon
market industry. It is also difficult in political terms to see how industrialized
countries will provide significant financial support for REDD activities in
developing countries without some way of getting credit for it in relation to
their emissions reductions obligations, and the CDM is (for them) the obvious
means of doing this. This re-opens a Pandora’s box whose lid had largely been
kept shut in the negotiations for Marrakech.
The Dynamics of Certification Schemes
The second example of where resistance makes carbon markets is the
development and dynamic of certification systems in the offset markets, both
the CDM and the voluntary markets. There are now around 15 such
certification systems, mostly developed by mainstream environmental NGOs
like WWF, which is behind the Gold Standard, one of the best-known schemes.
These systems have arisen precisely because of the widespread worry (fed by the
exposés by critics of carbon markets) that offsets (including the CDM) may
have little benefit in terms of carbon abatement and serve merely to assuage the
consciences of Western consumers or the pursuit of green PR by corporations.
The certification systems aim in many cases to add extra hurdles to those in the
CDM markets, or to create possibilities for different types of projects in the
voluntary markets (community-based agro-forestry, for example, in the Social
Carbon standard). While their boosters clearly exaggerate the effects, there is
nevertheless some evidence that these standards are having an impact on
practices in the offset markets, and that there may be a ‘race to the top’ as the
more stringent standards gain in market share and the prices projects certified
by them can garner.
247