After giving carbon credits to numerous non-additional carbon projects in the past, the CDM Executive Board is now actively looking to create additional demand for certified emission reductions (CERs). The new plan being designed by the UN CDM board aims to facilitate the acceptance of CERs for voluntary purposes.
“We’re going to look for new sources of demand for CERs, both for compliance and voluntary use,” said CDM Executive Board Chair Peer Stiansen.
"But there is absolutely no demand for CERs. The CDM projects are not being developed currently, so perhaps there is a need to keep DOEs and other CDM stakeholders gainfully employed. Nobody wants to buy CERs since the UNFCCC still allows new coal plants to earn CERs among other past flaws in its methodologies and decisions to award fake projects with carbon credits," said a carbon trader from the UK.
There have been allegations and studies which have shown that the UNFCCC CDM has been flawed ever since it rewarded HFC and other industrial gas projects with CERs which were lapped up by companies in the EU under the ETS. (read more here). The list of some flawed and eco-damaging projects under the CDM includes:
According to carbonmarketwatch, an NGO, the CDM was designed to bring clean and sustainable development to poor countries while enabling rich countries to achieve their emissions reductions cost effectively. "New coal power plants, no matter how efficient, undermine climate mitigation goals by locking in millions of tons of CO2 emissions over decades to come. Coal’s overall human and ecological toll is staggering.These projects are not additional because new coal power plants are built to be efficient to minimize fuel costs, regardless of CDM support. Such offsets therefore lead to a net increase in global GHG emissions."
“When it comes to CERs for compliance, we need to let the new and emerging cap and trade systems know, loud and clear, that they have a proven tool ready to use,” said Mr. Stiansen. “When it comes to the voluntary sector and results-based financing, I see us raising awareness about the benefits of the CDM and making it easier to source CERs and project opportunities.”
In 2012, rule changes were agreed allowing project participants to cancel CERs in the CDM registry on behalf of third parties. "The biggest question is why would anyone want to develop expensive CERs and sell it in the voluntary market when the cost to develop a VER project is almost half that of the CDM and without the hurdle of going through the UNFCCC and their bureaucratic process" warned project developer from Tamil Nadu in India.