CDM Panel Calls for Investigation Over Carbon Market Scandal
Certified Emissions Reduction Units (CERs) for the destruction of HFC-23 represent over 1/2 of the CDM credits issued to date. The CDM’s HFC-23 projects pay 65-75 times more for HFC-23 destruction than the manufacturers pay. A revision request submitted by CDM Watch to the CDM Executive Board provides overwhelming evidence that manufacturers are gaming the CDM system and undermining carbon markets by producing potent greenhouse gases (GHGs) just so they can get paid to destroy them. The revision request called for an immediate overhaul in the rules governing the number of credits being issued and removal of the perverse financial incentives that currently exist.
Yesterday, the Methodologies Panel agreed that many of the claims in the revision request could cause perverse incentives, i.e. plants producing dramatically more HFC-23 per ton of HCFC-22 than technically feasible, plants producing HCFC-22 only if they are receiving CDM credits, and that the CDM credits may be causing unnecessary production of HCFC-22. The Panel said that further investigation is required to “identify situations” resulting in excessive issuance of carbon credits and how “to improve the methodology.”
“If the UN CDM Executive Board wants to reinstall the integrity of the mechanism it has no other choice than to put the current crediting methodology on hold with immediate effect and cease issuance of all credits for the destruction of HFC-23 until the Panel has fully investigated the issue and revised the crediting methodology,” said Eva Filzmoser Director of CDM Watch.
“It is clear that the CDM’s current HFC-23 program is financing and working against its own goal of producing reductions of greenhouse gas emissions for offsets. This type of abuse is gambling with our planet’s ecology,” said Mark W. Roberts of the Environmental Investigation Agency. “The world cannot afford this corrupted type of carbon trading; squandering climate money is bad enough, but in this case many of the alleged benefits are simply a charade that actually increases the problem of global warming.”