Since the United Nations rejected 10 Chinese wind-farm projects on Dec. 4, a lot has been made about whether the emerging giant is gaming the carbon financing system. The question is also doing the rounds at the Copenhagen climate change summit as policymakers haggle over which developing countries should receive aid to tackle global warming.
A Dec. 15 report from consultants Point Carbon puts the debate into some context. According to the research, three out of 10 registered projects under the Clean Development Mechanism (which allows Western companies to offset their CO2 output through funding eco-friendly programs in emerging economies) never generate carbon credits.
What exactly does that mean? Well, roughly one-third of projects that are registered with the U.N. for approval (such as the recent Chinese projects that were eventually rejected) never get the green-light. That’s a little surprising, says Point Carbon’s manager of CDM analysis Arne Aik, because investors figure almost all projects will eventually be rubber-stamped.
Another surprise is which projects don’t make the grade. Point Carbon’s Aik says where a CDM scheme is based isn’t the major factor on getting approval. Renewables projects in China vs. Indonesia, for instance, have the same likelihood (71%) of getting the green-light. The one exception is Brazil, which has an approval rating of 55%. For CDM energy efficiency projects, the same theory applies: most emerging countries’ programs have a 70% ‘survival rate.’
So which projects have the worst approval stats? The Point Carbon report says registered landfill and other waste projects (those, for example, that siphon off methane gas) have a 55% chance of not creating carbon credits. Why? Because most don’t have sufficient monitoring in place to assuage U.N. fears that the projects don’t curb greenhouse gases.