A shortage of auditors is making it harder for Indian companies to register emission-reduction projects with a United Nations program to earn carbon credits, according to a study released today.
More than 70 percent of respondents in a survey conducted by the Federation of Indian Chambers of Commerce and Industry said costs are rising and projects in the country are stalling because there aren’t enough auditors to check for compliance with 1997 Kyoto Protocol rules.
India is the second-biggest host after China of projects earning Certified Emission Reduction credits, which are bought by governments and companies in rich nations to compensate for emissions. A collapse in carbon prices and uncertainty about the future of the UN Clean Development Mechanism program is causing major European auditors like SGS SA, Det Norske Veritas Ltd., Tuev Sued and Bureau Veritas SA to shift out of such work to other businesses, according to the survey.
A political logjam over pollution limits in the second Kyoto commitment period starting 2013 has caused prices in the offset market to plunge. CERs for December delivery have plunged 89 percent in the past year and are trading at a record-low of 80 euro cents ($1.04), according to data compiled by Bloomberg.
That may lead to audit firms not accepting jobs from Jan. 1 because of the risks associated with their work, the Designated Operational Entities and Independent Entities Association in Geneva, a lobby group representing auditors, said in a report yesterday.