CDM host nations ask U.N. for power to ban projects

By John McGarrity
Developing countries will next week ask the U.N. if they can withdraw  approvals they have given to U.N. emission reduction projects if evidence emerges that they harm the environment or breach human rights. On March 23, government officials from developing countries will ask the  U.N.’s climate secretariat for permission to ban Clean Development Mechanism (CDM) projects that have already been registered, a move that would in theory increase uncertainty for investors.
Under U.N. rules, developers of CDM projects must receive a letter of approval (LoA) from countries hosting the schemes before the U.N. can register them and award them carbon credits. But the rules do not allow government departments handing out the letters, known as designated national authorities (DNAs), to later withdraw their consent after the scheme has started, a situation some countries want rectified."DNAs are requesting for such a procedure to enable them to withdraw a (letter of approval) in case of non-compliance of a project’s sustainable development commitments," said Lindiwe Chauke, who is head of South Africa’s government agency responsible for approving CDM projects."There is no recourse for projects that fail to comply with the sustainable development commitments."
Moves by host countries to have more control over registered CDM  projects on their territory comes against the backdrop of high-profile campaigns over the last year by green groups to have three projects 
blocked from earning carbon offsets under the Kyoto Protocol.Colombia, which is home to a controversial reforestation project accused of stealing land from local peasants, is said by NGO Human Rights Watch to be one of the countries now seeking the right to withdraw letters of approval for projects registered by the CDM Board.
No-one from Colombia’s DNA was able to comment at press time.The CDM’s Executive Board, which does not have the power to rescind previous registrations for projects, will discuss the views aired at a 
meeting next week, said a spokesman for the UNFCCC."The next meeting of the CDM EB will discuss the matter next week and it’s possible that U.N. climate talks at the end of the year will decide on proposals to change the procedures for LoAs," the spokesman added.
The International Emissions Trading Association (IETA), the main carbon trading lobby, said it respected the right of host countries to block projects that had subsequently been proved to harm human rights or the environment, but want a clear framework."IETA members wouldn’t support such projects, but we would want governments in such cases to work in tandem with the Executive Board. The right procedures need to be in place." However, one CDM investor said he was sceptical that host countries would choose to withdraw approval for projects."Given the capacity of many DNAs, I’m wondering what would prompt them to re-evaluate their original decision. They are usually overly busy with new projects, never mind looking back into the past," said Mark Meyrick, head of carbon trading at Dutch utility Eneco.
Next week’s forum of CDM host countries comes as the Panamanian government and the indigenous Ngobe-Bugle people meet to discuss their objections to the Barro Blanco hydro project that was registered by the CDM Executive Board last year.Opponents of the scheme, which is part-funded by KfW and FMO, which are state-owned banks in Germany and the Netherlands, claim that the scheme will displace villagers and harm the local environment.
Panama’s government supports the CDM project as part of the country’s modernisation drive, but green groups want foreign funding stopped for the scheme and approval withdrawn."We call on the UNFCCC and the national authority to make sure that the Environmental Impact Assessment of the Barro Blanco project is thoroughly reviewed and the approval subsequently withdrawn," said CDM Watch.Last year members of the European Parliament in Brussels called for a "do not harm" assessment for U.N. credits that could be used by EU governments or companies to address concerns that such schemes could be damaging local communities.