July 16, 2008 cable to US officials from Mumbai, India, published in August 2011 by Wikileaks.…”Climate policy has very little to do with science and everything to do with creating and tapping into vast flows of money.” “Wikileaks cable reveals the fraud that is the Kyoto protocol”
9/27/2011, “Clean-energy credits tarnished," Nature, Quirin Schiermeier
Critics have long questioned the usefulness of the Clean Development Mechanism (CDM), which was established under the Kyoto Protocol. It allows rich countries to offset some of their carbon emissions by investing in climate-friendly projects, such as hydroelectric power and wind farms, in developing countries.
Verified projects earn certified emission reductions (CERs)–carbon credits that can be bought and sold, and count towards meeting rich nations’ carbon-reduction targets.
But a diplomatic cable [dated July 16, 2008] published last month [Aug. 2011] by the WikiLeaks website reveals that most of the CDM projects in India should not have been certified because they did not reduce emissions beyond those that would have been achieved without foreign investment. Indian officials have apparently known about the problem for at least two years.
“What has leaked just confirms our view that in its present form the CDM is basically a farce,” says Eva Filzmoser, programme director of CDM Watch, a Brussels-based watchdog organization. The revelations imply that millions of tonnes of claimed reductions in greenhouse-gas emissions are mere phantoms, she says, and potentially cast doubt over the principle of carbon trading. “In the face of these comments it is no wonder that the United States has backed away from emission trading,” Filzmoser says.
The cable, written on 16 July 2008, was sent by the US consulate in Mumbai, India, to the US secretary of state, and summarizes a discussion of the CDM involving representatives of the consulate and the US Government Accountability Office, along with Indian officialsand executives of large Indian companies. At the time, 346 Indian projects had been registered with the CDM’s executive board. Today, more than 720 Indian projects have been approved and have gained some 120 million tonnes’ worth of carbon credits, a large fraction of the 750 million tonnes issued since 2005 (see ‘Cleaning up’).
Indian authorities were also criticized in the cable. All CDM projects must be validated nationally, then verified independently by an accredited firm. But the cable quotes R. K. Sethi, then chairman of the CDM’s executive board and member-secretary of the Indian CDM authority in New Delhi, as admitting that the authority simply “takes the project developer at his word for clearing the additionality barrier”.
“This will not invalidate carbon trading, but it does go to show that the CDM has serious flaws,“ says Mark Maslin, a climatologist at University College London. “In India and China, the multiple levels of governance which you need to have in place to make carbon trading work are simply not there.”
Martin Hession, head of global carbon markets at the UK Department of Energy and Climate Change, and chairman of the CDM executive board, says that the critical remarks in the cable date from a time when “people were complaining a lot” about problems with the CDM. Controversies over whether specific projects reduce net emissions are still common, he says. But since 2008, the board has followed more stringent guidelines for verifying the eligibility of projects and for enhancing the overall efficiency of the scheme.
“The CDM is much more transparent and predictable than the tenor of these remarks might suggest,” he says. “We reject many projects in India and China because they fail to meet the required criteria, and we do in fact often get the message that project validation has become too stringent.”
Others argue that the rules are still not rigorous enough. In some circumstances, the CDM may actually have encouraged the production in developing countries of the coolant chemical HFC-23, an extremely potent greenhouse gas (M. Wara Nature 445, 595–596; 2007). Critics have demanded harsher sanctions against validating companies found guilty of lax oversight, together with clearer conflict-of-interest policies and tighter rules on what qualifies as an additional clean-development project.
International Rivers, an environmental campaigning group based in Berkeley, California, is now calling on the CDM executive board to reject the 412-megawatt Rampur hydropower project in Himachal Pradesh, India, which is awaiting CDM approval. The project could earn some 15 million carbon credits from 2012 to 2022, amounting to an estimated US$150-million windfallfor the Shimla-based developer Satluj Jal Vidyut Nigam Limited, the group says. But the decision to finance that project was taken long before the CDM was even created, says Himanshu Thakkar, director of the Delhi-based South Asia Network on Dams, Rivers and People, clearly invalidating its application.
The company stands by its claim that the project qualifies for the CDM, and says that the Indian government approved the investment proposal for the project in 2007, when the CDM was already in place. As Nature went to press, the CDM’s executive board, which met in Quito, Ecuador, this week, had not yet decided whether to approve the Rampur project.
Despite the controversy, the European Union seems determined to continue its mandatory emissions-trading system, which it sees as crucial in tackling climate change.”...
(Top image caption: “Indian carbon-credit claims–such as those for the Baglihar Dam–are under scrutiny. A. Gupta/Reuters/Corbis”)
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Added: From July 16, 2008 cable to US officials from India:
1. Summary. (SBU) Despite the risk and uncertainty of qualifying for carbon credits (see ref A), Indian businesses have pumped USD 25 billion into unilaterally developing Clean Development Mechanism (CDM) projects to generate carbon credits….Carbon credit boosters in Mumbai denounced the carbon credit validation and registration process as bureaucratic, lengthy and arbitrary, similar to what GAO heard during meetings in Delhi (see ref B). However, they conceded that no Indian project could meet the “additionality in investment criteria” to be eligible for carbon credits….
7….”If the projects fail to qualify for carbon credits, Tamotia continued, he will be forced to source sub-standard equipment from China rather than high-quality energy efficient technology from Europe and the U.S. It is difficult to justify the added cost of using green technology without a carbon credit revenue stream, he maintained….
15….Agarwalla pointed out that India has abundant coal resources and therefore coal will continue to dominate in the country’s energy portfolio. Recognizing this, processes that are developed to make the most efficient use of coal should be encouraged and should earn carbon credits, he maintained….
18….Amidst complaints about the “arbitrary” decisions of the CDM Executive Board, all interlocutors conceded that all Indian projects fail to meet the additionality in investment criteria and none should qualify for carbon credits. By their own admission, all of their clean energy projects are aimed at achieving sustainable development and will continue with or without the CDM benefit.”…
Date: July 16, 2008…
“To: Central Intelligence Agency | Department of Commerce | Department of Energy | India Chennai | India Kolkata | India Mumbai | India New Delhi | National Security Council | RUCNUNE UNEP GOVERNING COUNCIL COLLECTIVE | Secretary of State | United Nations (Vienna) | United States
From: Mumbai”
“CARBON CREDITS SUFFICIENT BUT NOT NECESSARY FOR SUSTAINING CLEAN ENERGY PROJECTS OF MAJOR INDIAN BUSINESS GROUPS”
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