You can call a rip-offset a CDM project, but it’s still a rip-offset

Like landfills, oil sands, and “occasional irregularity,” the term Clean Development Mechanism (CDM) is in the euphemism Hall of Fame. But once a rip-offset, always a rip-offset. Reuters reports:

The U.N. climate change body has suspended one of the largest auditors of clean energy projects under Kyoto Protocol, a move highlighting problems long aired by critics of the climate pact’s greenhouse gas trading scheme.

Norway’s DNV had their accreditation as project auditors suspended late last week for five “non-conformities” relating to its practices, the U.N. said after performing a spot check of the company’s operations in early November.

Speaking of euphemisms, if George Carlin were still alive I’m sure he’d add “non-conformities” to his famous list. DNV wasn’t fraudulent or incompetent. No. It’s just a misunderstood nonconformist. Fortunately, DNV isn’t a big player or central to the entire CDM process.

DNV is a major player in the $13 billion CDM market, having validated close to half of the projects registered by the U.N.

D’oh. Well, at least the non-conformities weren’t in areas central to CDM credibility, like, say project auditing and verification would be.

DNV said the non-conformities related to project auditing and verification procedures.

Never mind.

Seriously folks, let’s remember that the West got suckered into giving China some $6 billion to destroy greenhouse gas refrigerants that probably cost Chinese companies $100 million to capture and destroy (for more details, see “Kyoto’s Great Carbon Offset Swindle“). Let’s remember that a major 2008 analysis from Stanford found

“between a third and two thirds” of emission offsets under the Clean Development Mechanism (CDM) — set up under the Kyoto treaty to encourage emissions reductions in developing nations — do not represent actual emission cuts.

Let’s remember that

U.N. regulators are also concerned that some independent auditors of these projects, who are responsible for vetting their environmental legitimacy, have been letting project developers push through ventures of questionable environmental value….

In a presentation to U.N. officials last fall, the head of T¼v S¼d’s carbon business told U.N. officials that the quality of projects the auditors are receiving from carbon brokers is “going down,” according to the U.N. panel’s Mr. Schmidt, who was at the meeting….

“There is a high incentive” for companies to put together environmentally questionable carbon-credit projects, “because there is a lot of money that can be earned,” he said. “People are getting more inventive, so it’s getting harder to detect the black sheep.”

Let’s remember that instead of using the money to fund the transition to a sustainable economy, the World Bank “has loaned $1.5 billion to fossil-fuel companies to make minor greenhouse-gas reductions,” and “then sells carbon credits for those reductions,” and “takes its 13 percent cut”?

Let’s remember that “The vast majority of schemes that sell carbon credits to offset pollution are delivering 30% less than they promise“?

But here’s some news that will warm your heart if you are a hard-core (i.e. Lehman- or Enron-loving) capitalist:

A DNV spokeswoman said the company had not lost any clients as a result of the suspension, and would carry on as usual with project validation and verification work.

“We assume that we’ll be back in business in January,” the spokeswoman said. “We will be very quick in closing these non-conformities.”

Thank goodness.

We wouldn’t want to take this opportunity to reconsider the whole CDM business in the light of evidence that suggests we have run out of friggin’ time to pay other countries to do questionable rip-offset projects while the West keeps running fossil fuel plants (see Stabilize at 350 ppm or risk ice-free planet, warn NASA, Yale, Sheffield, Versailles, Boston et al and Study: Water-vapor feedback is “strong and positive,” so we face “warming of several degrees Celsius”).

Heck, it’s not like fossil carbon dioxide emissions have a mean atmospheric lifetime of 30,000 years while CDM rip-offset projects last a few decades if we’re lucky, and they aren’t just purely fraudulent.

Or maybe it is. Enough!

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3 Responses to You can call a rip-offset a CDM project, but it’s still a rip-offset

  1. Thanks for another excellent posting on the CDM, Joe. Note that the GAO just came out with a stinging (by bureaucrat-speak standards) critique of the CDM (and the EU Emissions Trading System). Download it from and read the Reuters coverage here Also see International Rivers’ recent fact sheet on the CDM which we’re currently spreading around at the Poznan climate talks –

    Patrick –

  2. Modesty says:

    From the International Rivers fact sheet:

    “Industrialized countries will need to meet their obligations
    for financial transfers [to developing nations] in a way that is independent from and additional to their emission reduction obligations.”


  3. Brian says:

    Before I left consulting, I was deeply involved in the brave new world of carbon credits. In the late 90’s it was mostly experienced environmental people mixed in with a few finance types, looking for a way to get business to give a crap about GHGs. Now its like the wild west and any bozo can get a job. I knew the industry was beyond help when about a year ago NPR had some a segment interviewing some new grads having a dinner party, and the journalist breathlessly described how two of them had jobs with offset providers, waxing on about this cool, hip new generation. Then the kids were interviewed and it was clear that had no clue what they were doing – but they felt they were important because they were generating ‘credits’. Actually, the comparison to CDOs is spot on, because now its all about – as we use to say – making carbon ‘fungible’, and who cares if the projects actually have any lasting benefit.

    The CDM program is particularly silly, because since its inception, the number of bureaucratic hoops you have to jump through just to propose a project make it worthwhile only to those groups that have a project that is uncomplicated. Offsets are a good idea gone bad because of lack of a global regulatory regime that would ensure that only ‘real’ credits were generated. I still think there is an opportunity to use offsets to drive changes that wouldn’t otherwise occur, but flaring methane from a landfill isn’t one of them.