The Sky is Not the Limit: - Carbon Trade Watch

3.2 Renewables under SiegeEmissions trading threatens to reducesustainable renewable energy to adecorative by-product. The projectrequirements of CDM and JI containobstacles for small renewable projects.These include difficulties in measuringand determining ownership of energyproduction. 1 Large multi-nationalcorporations find it easier to overcomethese obstacles than smaller firms.Companies such as Shell orBPAmoco, which have both renewableand fossil-fuelled facilities can offsetwithin one corporate structure, haveclear ownership and can achieveemissions reductions which are easierto measure.The Dutch Government’s CDMprogramme will pay up to US$5.00 for permits fromrenewable projects. 4 However,permits from sinks projects inthe South could cost as littleas US $1.00. 5Renewable firms may find that thebest prices for permits will not comefrom demand to fulfil Kyoto reductiontargets, but from companies wanting tobuy permits to build anenvironmentally friendly image.Frank Van Der Vleuten of Free EnergyEurope, a manufacturer of solarpanels, believes that, “The Kyotomechanisms are far away frompractical application and relevance.Hardly anybody has a vision how theycan be put into practice for smallrenewable energy systems.” He adds“before establishing abstract marketbased mechanisms, the first and mostsignificant step is recognising the realand many values of renewable energywhich go beyond the cost of oneemission reduction permit.” 6When large companies have superioraccess to subsidies, smallercompanies find themselves at acompetitive disadvantage. Thisundermines diversity and innovation inthe renewable energy sector as awhole. In the Netherlands, subsidiesfor the solar industry in the 1990s wereconcentrated on Shell and ecoconsultantsEcofys. 2 This limited thenumber of solar panel firms to just afew main players and Shell gained avirtual monopoly in solar panelinstallation. In contrast, Germansubsidies were distributed more fairlyacross different sized firms. By 2002there were over 300 companiesinvolved in supplying solar panels. 3A coal-fired power plant would find itmore rational to introduce energyefficiency measures or switch to gas,than to replace the use of fossil fuelswith a wind farm.“Most of the running forthe CDM is, sadly, likelyto be made by bigcompanies offeringmarginally cleaner coalcombustion kits toChina.”— Professor David Elliot,Energy & EnvironmentResearch Unit, OpenUniversity, UK. 722