The Clean Development Mechanism, the United Nations program designed to lower greenhouse-gas emissions in developing countries, is set to be revamped next year as initial commitments under the Kyoto Protocol expire.
“Everything is on the table” for making the program more effective, Niclas Svenningsen, manager of strategy and policy development at the UN Framework Convention on Climate Change, said today at an emissions conference in Bangkok.
Many investors don’t realize the CDM is due for automatic review as the first commitment period of the Kyoto treaty, which runs from 2008 through 2012, comes to an end, he said. The program, intended to give richer countries an incentive to fund emission-abatement projects in developing countries such as China and India, has been beset by an oversupply of credits that has dragged down prices to record lows.
The review of the CDM will include whether certain technologies need to be banned, Svenningsen said. At last year’s meeting in Marakkesh, Morocco, the UNFCCC deferred a proposal to prohibit UN emission credits linked to hydroflourocarbon-23 and other industrial gases, even though the EU will ban such credits starting in May 2013. While HFC traps thousands of times more heat than carbon dioxide, the EU decided to stop allowing such credits in its emissions trading system, the world’s largest, and is urging an outran ban on HFCs.
Svenningsen said the UNFCCC will push delegates at this year’s climate summit in Doha, Qatar, to commit to a so-called second commitment to Kyoto, or Kyoto II. That would mean developed nations would commit to binding cuts in emissions starting in 2013. So far, Europe is alone in its pledge to adopt binding targets going forward.
“Kyoto2 is still very important because it is still the only legally binding agreement that exists,” Svenningsen said. While nations including Japan, Russia and Canada ruled out new commitments to Kyoto at last year’s climate summit in Durban, South Africa, Svenningsen said the UNFCCC will pressure them to sign on in Doha. Australia may also commit to emission reductions, he said.
The UN carbon market regulator deferred a decision to change the rate at which emission credits are awarded to projects tied to reductions of HFC-23 at a July 2011 meeting in Marrakesh. The executive board of the CDM couldn’t agree on changes to the methodology governing HFC-23 offsets, according to Martin Hession, chairman of the executive board.
The Marakkesh Accords, the rules that govern the CDM, were signed a decade ago. The board also said last year it will seek further advice on whether to allow ultra-efficient coal-fed power stations in India and other countries to be awarded carbon credits. The board rejected advice from a separate UN panel to suspend the methodology after it deemed the advice was based on unrealistic efficiencies.