E&E: CDM board to revisit financing for coal projects in India, China

> CDM board to revisit financing for coal projects in India, China >
> Colin Sullivan, E&E reporter
>
> Published: Tuesday, May 8, 2012
>
> UNITED NATIONS — The U.N. board charged with running an international > carbon offsets program under the Kyoto Protocol meets this week in Bonn, > Germany, to consider revising how it delivers carbon credits for > coal-fired power plant construction in the developing world. >
> The Executive Board of the Clean Development Mechanism (CDM) has scheduled > a meeting to discuss and possibly approve a proposed methodology for > determining whether a new generation of coal plants, to be built in India > and China, should qualify for emissions credits.
>
> The issue has been ripe for action at the board since U.N. officials late > last year suspended the previous methodology. Under the old rules, which > were halted during climate talks in South Africa, 45 coal-fired plants > would have been eligible for 89 million carbon credits.
>
> The street value of those credits is about $500 million annually for the > projects in question, sources said. Of those, 32 are in India and > 13 in China. Six have already been registered under the CDM. >
> Activists close to the complex offsetting regime are pressing the board > this week to abandon the program altogether. They have accused India and > China of trying to game the system with arguments that the CDM money would > help to make the plants more efficient.
>
> Justin Guay, Washington representative for the Sierra Club’s International > Climate Program, argued that project developers — whether in private > industry or government — are already planning on building the plants with > more efficient technologies with or without financing provided under CDM. > He added that he wants the board to send a firm message.
>
> “Emissions trading is not going to go away if Kyoto goes away,” he said. > “The precedent that this sets that says coal can be low carbon is > incredibly dangerous.”
>
> The group CDM Watch estimates that the 45 projects would lock in more than > 400 million tons of carbon dioxide emitted per year. Moreover, a report > last year from the Stockholm Environment Institute found that CDM support > for such projects has little to no bearing on whether projects opt for > more efficient technology.
>
> Guay said he has not seen the proposed new methodology, which the CDM > board has not yet released. Asked how the system got to where it is in the > first place, Guay said the rumor is that the United Kingdom intervened at > some point to help India build the plants, thinking doing so would > encourage use of the cleanest technologies available.
>
> “The rumor is that the British government looked at the pipeline of > projects and said, ‘It’s a big problem, let’s incentivize them to make > them slightly more efficient,'” he said. “But India was already planning > on better technology anyway.”
>
> A call to the CDM Executive Board seeking comment was not returned. > The board is meeting all week in Bonn.
>
> —
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