![](http://blogs.edf.org/climatetalks/wp-content/uploads/sites/13/2018/03/BeloMontemunduruku-700x325.jpg)
Belo Monte Dam under construction on the Xingu River in the state of Pará, Brazil in 2013 | Photo credit: Letícia Leite-ISA
In the middle of terrifying weather headlines – mega-forest fires in California, serial super-hurricanes slamming the Caribbean, heat waves in the Arctic – it’s more important than ever to achieve large-scale reductions in carbon pollution, fast.
Two new international accords are starting to move industry and governments in the right direction – the UN Paris Agreement, and the International Civil Aviation Organization’s (ICAO) Carbon Offsetting and Reduction System (CORSIA), which this week launches a series of regional seminars to inform aviation stakeholders about the system’s implementation procedures. President Trump’s refusal to face the climate challenge has really only mobilized everybody else to move ahead.
But other dangers lurk. A shadowy lobby is pushing hard to revive the Clean Development Mechanism (CDM) – a relic of an outdated, failed attempt at climate action.
Contrived under the Kyoto Protocol, the CDM was supposed to let industrialized countries buy carbon credits from emissions-reductions projects in developing countries. These credits were supposed to represent real, verifiable emissions reductions that wouldn’t have happened without the CDM projects. The last part part—“additionality” — is key. Otherwise, developed-world power companies and cement factories just pollute more without actually making any real emissions reductions anywhere.
Twenty-one years and almost 3 billion tons CO₂e of purported “offsets” later, we know it didn’t work. Fully 85% of CDM projects are “unlikely to be additional,” says the most comprehensive, up-to-date study of the CDM. (It’s only “unlikely” because it’s typically very hard to tell what would have happened if the projects didn’t get done). The corruption has become systemic, especially in the biggest CDM countries – China, India and Brazil – where 90% of the credits come from. A US State Department analysis of wind power projects in India that could generate as much as 500 million tons of CO₂e credits found that project developers routinely keep double books. They do one term sheet showing the project is viable to get financing, and another term sheet for the CDM, showing that the project is inviable without CDM credit, i.e., is “additional”. A project that needed carbon credit to work would be far too risky for a bank to finance, investors said.
Brazil is a major offender. Its biggest CDM player, state power company Eletrobrás, told the CDM Executive Board that its Amazon mega-hydroelectric dams needed CDM credit to attract investors. At the same time, it told investors that the dams were fully viable on their own. We know this in part because the same dams (all registered, validated, and generating CDM carbon credit) are under investigation in the gigantic, Brazil-wide corruption investigations nicknamed “Lava Jato” (Car Wash). They are also prime exhibits in a lawsuit for fraud in US federal court brought by investors in Eletrobrás stock. The dams are, of course, socio-environmental nightmares too.
In short, there are excellent reasons why the EU Emissions Trading System no longer accepts CDM from Brazil, China and India, as well as whole categories of projects, and why California’s carbon market categorically rejects international credits from anything resembling the CDM. This in turn is part of the reason that CDM credits have effectively zero value in the market. They will go on having zero market value unless the CDM lobby (led by Brazil) in the Paris Agreement and CORSIA succeeds in foisting them onto the new markets.
If they get away with it, both the new, promising agreements to lower atmospheric carbon will be irrevocably tainted.
Environmentalists and government negotiators should keep fake CDM carbon credits from high-emissions emerging economies out of Paris and CORSIA, at risk of increasing rather than decreasing GHG pollution. There are much better – real – ways to control emissions, which I’ll be addressing in a future post.