Aug. 26 (Bloomberg) -- The United Nations Clean Development Mechanism is ``expensive and time consuming'' because it requires project managers to abide by new rules governing the technologies used to reduce emissions, the World Bank said.

The CDM, the world's second-biggest greenhouse-gas market, allows rich nations to buy emission credits from projects like wind farms and industrial-gas combustion plants in developing nations. The mechanism must become more effective in reducing gases blamed for climate change, the World Bank said on the Web site of the UN Framework Convention on Climate Change, or UNFCCC, which oversees climate-protection talks.

``These systems are viewed as cost effective, but they have the drawback of the initial distribution of allowances that are difficult to determine,'' the World Bank said. ``The process of creating new methodologies and applying an approved methodology to a proposed project is expensive and time consuming.''

The CDM executive board has approved a method to ensure that projects reduce greenhouse-gas emissions by the promised amount, the bank said in its submission.

The method to encourage energy-efficient lighting systems monitors greenhouse gas saved by ``building safeguards into the project design and implementation stages to ensure environmental integrity,'' it said. ``This methodology is unique in its simplification of monitoring requirements.''

Coal Consumption

About 180 nations are negotiating a climate deal through 2009, overseen by the UN. World carbon dioxide emissions from energy use rose 2.8 percent last year as coal consumption outpaced crude oil and clean-burning natural gas, according to BP Plc data. Climate negotiators are meeting this week in Accra, Ghana.

Of 3,788 projects that have applied for CDM emission credits, 385 had received the allowances as of Aug. 1, according to data on a UN Web site. Projects are approved at meetings of the CDM executive board.

``A process that can take three meetings, delaying a project by 4.5 months, could be expedited if a full-time staff was available to consider project issues more frequently,'' the Carbon Markets Association said in a submission to the Accra talks. Delays ``result in losses with regards to both opportunity costs and real costs to CDM project developers.'' The association was this month renamed the Carbon Market and Investors Association.

UNFCCC expenditure on the CDM in 2008 through July 30 was $9.8 million, compared with $5.1 million in a similar period through July 25, 2007, according to reports on a UN Web site.

At its meeting through Aug. 2, the executive board instructed the UNFCCC to finish completeness checks for so- called requests for credit issuance within 20 working days. The UNFCCC was to process completeness checks for requests for registration within 30 days of receiving a fee.

To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net

Last Updated: August 26, 2008 13:20 EDT