A high-level independent panel has called on nations to address the “crisis” in carbon markets and save the Kyoto Protocol’s Clean Development Mechanism (CDM).
The aim of the CDM is to earn a saleable credit for each tonne of greenhouse gas emissions avoided and has supported over 4500 projects in 75 developing countries, mitigating around one billion tonnes of emissions.
But the current low price for carbon credits, because of low demand and uncertainty over future demand, which is related to countries’ emission reduction commitments, is threatening the scheme.
An international panel led by Valli Moosa, which reported at United Nations talks in Bangkok yesterday, warns that if the CDM is left to fall apart the consensus for global carbon markets may also falter.
Nations around the world should be upping the scope of their emission reduction efforts, strengthening their commitments under the United Nations Framework Convention on Climate Change and instigating policies and abatement measures now.
“Nations must, as a high priority, restore faith in global carbon markets generally and in the CDM specifically,” says Moosa. “Although the CDM has been the subject of extensive criticism, it has improved markedly in recent years and has helped combat climate change by mobilizing the private sector through markets.”
The CDM has been criticised by some as being too stringent and slow and by others as not stringent enough.
But UK vice chair of the committee, Joan MacNaughton, admits that while the CDM may not be perfect it is currently the best option available.
“New market-based mechanisms will take years to design and make operational. For the balance of this decade the CDM is likely to remain the world’s foremost means of gaining the benefits of a truly global carbon market,” she said.
But the panel did make some 50-odd recommendations to improve the CDM, including more systematic reporting and verification of sustainable development schemes, the implementation of performance benchmarks and other standardised methods, and improved access for under-represented regions.
The recommendations should be implemented “fully and without delay”, says the panel, so that they are in effect by the UN Climate Change Conference scheduled for December 2013.
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11 September 2012