LONDON, (Reuters) – The U.N.-backed carbon offset market needs an overhaul as it lacks transparency and is vulnerable to bribery and collusion that threaten efforts to help developing nations cut their growing carbon emissions, researchers in Britain said.
A report from the Univer-sity of East Anglia and University of Sussex yesterday warned that the Kyoto Protocol’s emissions offset market could become “a rich man’s club” of project developers, emissions verifiers and government officials, without benefiting the poor. Under the protocol’s Clean Development Mechanism (CDM), companies and governments in rich nations can develop emissions-reduction projects in the developing world in return for carbon offset credits.
The researchers said governance of the offset scheme does not function properly, while CDM finance is seen as extra revenue for big corporations keen to prop up existing investments in fossil fuels.
“This is undermining the credibility of the CDM by prolonging the life of the very industries that most need to transition to a lower carbon economy,” they wrote.
Problems of governance at the local level have been “almost entirely neglected,” the paper said, adding that many project consultations are inaccessible to many people in poorer communities. “Lack of transparency and monitoring can also be to the detriment of project developers, who find hearings hijacked by local officials wanting a bribe in return for support for the project.”
The researchers released the paper weeks before the start of a U.N. climate summit in South Africa, where representatives of more than 190 nations will discuss the future of the Kyoto pact and its market-based mechanisms, which expire at the end of 2012.
DEBATE
The CDM has often come under fire from critics saying it lacks environmental integrity and in some cases breaches human rights. The executive board of the CDM has repeatedly said that reform of the system is in the works.
Martin Hession, chair of the CDM executive board, said he welcomes a debate on improved governance and that the board will launch a high-level policy dialogue on the CDM in Durban.
“Governance is a shared responsibility and under our rules host countries in particular are responsible for ensuring projects deliver sustainable development,” he told Reuters in an emailed statement.
The CDM has delivered “transformative” investment, real emissions reductions and social and environmental benefits through a pipeline of 3,500 projects in 70 countries, he said.
