A Critical Conversation on Climate Change ... - Green Choices

178 development dialogue september 2006 – carbon tradingnot enforced. The climatic ‘balance sheet’ for such projects wouldthus, logically speaking, have to be debited for the climate effectsof the associated damage done to the rule of law in the host country.In addition to undermining important incentives for structuralchange and innovation, this type of proposed CDM accounting raisesquestions about the commitment of the international community involvedin CDM projects, including the World Bank and Northerngovernments, to what the Bank calls ‘good governance’.Third, and perhaps most important, the cheapest and most secure carboncredits that the CDM has to offer – and thus the ones most indemand by industrialised countries – will be those, like the HFC-23and N x O projects mentioned above, that do the least to help develop astructure of renewable energy and transport in Southern countries. 411While such projects (assuming they would not have been implementedanyway) do carry environmental benefits, they are essentially onlyend-of-pipe add-ons to single, existing plants; could have easily beencarried out through traditional regulation; and don’t help bring aboutstructural change in critical climate-related sectors such as energyor transport through research and development, technology sharing,training and so on.As the US lead and sulphur dioxide programmes demonstrate, becausethis type of market-oriented project ‘focuses solely on reducinga single pollutant by an exact date and a precise amount at least cost,techniques and practices that deliver multiple benefits – e.g., newways of energy conversion, as well as conservation, and renewableforms of energy – are frozen out of the market’. 412As a 2004 overview of the CDM by the Organisation for Economic Cooperationand Development, a band of 30 industrialised countries, noted:[A] large and rapidly growing portion of the CDM project portfoliohas few direct environmental, economic or social effectsother than greenhouse gas mitigation, and produces few outputsother than emissions credits. These project types generally involvean incremental investment to an already-existing system in orderto reduce emissions of a waste stream of GHG (e.g. F-gases orCH 4 ) without increasing other outputs of the system. 413Coal-bed methane schemes are another example of business-friendlyprojects that do have environmental benefits, but don’t promoteclimate stability when part of a trading scheme. Gas capture projectsin oil fields similarly contribute little toward the innovations neededfor a transition away from fossil fuels, yet also yield conveniently largechunks of cheap carbon credits.Many national-levelCDM authorities ‘do notcare about additionality ofCDM projects…There isa real risk of a backlashagainst the CDM if itssustainability performancedoes not improve.’ 407Axel Michaelowa(CDM MethodologyPanel) and KatharinaMichaelowa, HamburgInstitute for InternationalEconomics