Executive Summary

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This report provides critical policy analysis and case documentation about the role of the Clean Development Mechanism (CDM) in Africa. Instead of providing an appropriate flow of climate finance for projects related to greenhouse gas mitigation, the CDM has benefited large corporations (both South and North) and the governments they influence and often control. South Africa is a case in point, as both a victim and villain in relation to catastrophic climate change.

Many sites of emissions in Africa – e.g., methane from rotting rubbish in landfills, flaring of gas from oil extraction, coal-­‐burning electricity generation, coal-­‐to-­‐liquid and gas-­‐to-­‐liquid petroleum refining, deforestation, decomposed vegetation in tropical dams – require urgent attention, as do the proliferation of ‘false solutions’ to the climate crisis such as mega-­‐hydro power, tree plantations and biofuels. Across Africa, the CDM subsidizes all these dangerous for-­‐profit activities, making them yet more advantageous to multinational corporations which are mostly based in Europe, the US or South Africa.

In turn, these same corporations – and others just as ecologically irresponsible – can continue to pollute beyond the bounds set by politicians especially in Europe, because the Emissions Trading Scheme (ETS) forgives increasing pollution in the North if it is offset by dubious projects in the South. But because communities, workers and local environments have been harmed in the process, various kinds of social resistances have emerged, and in some cases met with repression or cooptation through ‘divide-­‐and-­‐ rule’ strategies.

Chapter One sets the context for the carbon markets and the CDM mechanism, revealing its continuing price collapse and gloomy future prospects. Chapter Two maps the players in CDM markets and voluntary schemes.

Chapters Three through Eight are the case studies, beginning with South Africa’s pilot CDM fraud and environmental racism in Durban’s Bisasar Road landfill methane-­‐ electricity project, along with similar trends in Egypt. Chapter Four dissects the case of Nigerian CDM corruption of local governance, especially where oil companies are receiving subsidies for reducing their Niger Delta gas flaring – an act which by law they are prohibited from doing in the first place. Chapter Five addresses the emergence of trees, plantations and forests within CDM financing debates, with cases from Uganda, Mozambique, the DRC, Tanzania and Kenya. Chapter Six is about two failed CDM proposals both involving exploitation of Mozambique’s gas reserves. Chapter Seven discusses the way mega-­‐dams are being lined up for CDM status, with case studies from Ethiopia and the DRC. Chapter Eight considers the rise of the Kenyan and Mozambican Jatropha biofuel industries.

All these cases suggest the need for an urgent policy review of the entire CDM mechanism’s operation (a point we made to the United Nations CDM Executive Board in a January 2012 submission), with the logical conclusion that the system should be decommissioned and at minimum, a moratorium be placed on further crediting until the profound structural and implementation flaws are confronted. The damage done by CDMs to date should be included in calculations of the ‘climate debt’ that the North owes the South, with the aim of having victims of CDMs compensated appropriately.