Death knell sounded for dirty carbon credits from coal

CDM Executive Board decides to put the methodology used by coal power plants to earn carbon credits under further scrutiny

By Uthra Radhakrishnan
Published: Saturday 28 July 2012

The coal energy industry’s attempts to sell itself as clean enough to earn carbon credits through the UN-backed clean development mechanism (CDM) may not pay off in future. In a meeting that concluded last week at the CDM Executive Boards’ headquarters at Bonn, the board members wanted the methodology used for evaluating coal-fired plants to be revised yet again despite already having undergone significant revisions in the past one year. Until this revision gets cleared by the board, projects that are yet to get registered will have to wait. At present, there are 45 projects in the validation stage, pending registration. The decision comes at a time when time is running out for such plants. That’s because starting January 1, 2013, the EU, the largest buyer of such carbon credits or certified emission reductions (CERs) will only be accepting carbon credits from the poorest countries. This leaves out countries such as India and China where most of these coal CDM projects are located.

According to Eva Filzmoser, director of CDM Watch, a Brussels-based CDM watchdog, “coal power projects not only pose severe harm to the climate, they also threaten the health of local communities, ultimately failing to deliver sustainable development.” “We applaud the board’s decision which essentially marks the end of dirty carbon credits from coal power in the EU Emissions Trading Scheme.”
How clean can coal get?

Coal is one of the most carbon-intensive fuels. But by using better boiler technology in coal-powered thermal power plants, it is possible to make such plants more efficient and hence less carbon-intensive. But by how much is the question. Reports prepared by the CDM methodology panel and Stockholm Environment Institute in 2011 suggest the methodology that is used by applicants is systemically flawed, allowing companies to show more reductions than might actually have taken place by manipulating the data. One report states that this overestimation could be as high as 250 per cent. Further, the amount of CO2 emissions reduced due to such technological improvements in coal plants would be marginal when compared to the large amount of CO2 emissions from them for the rest of their lifetimes.

Carbon credits put on hold 

The methodology that would enable coal-fired power plants to earn carbon credits was introduced into the CDM process in 2007. At the time the methodology got suspended by the UN board last November, 10 projects had been registered, out of which four were eventually rejected. The suspension followed reports prepared by the CDM methodology panel and Stockholm Environment Institute. The six coal-fired plants that continue to be registered are alone expected to generate carbon credits to the tune of 9 million CERs annually. There are 45 projects in the validation stage, pending registration. Should it be possible for them to get registered, more than 500 million CERs would be generated, which is almost a quarter of the total number of CERs expected from all CDM projects by the end of 2012.

Thus, such projects would not only have contributed to the warming planet’s woes, but essentially have stolen scarce climate funds that could otherwise have been used to promote clean technology and put developing countries on a low-carbon growth path, which was what the CDM was actually set up to do.

Over the past few years, developed countries, primarily the EU, have been using carbon credits generated through CDM projects in developing countries to meet their own domestic mitigation targets under the Kyoto Protocol, the only internationally-binding climate change treaty so far. But CDM projects have been severely questioned for their ability to promote sustainable development, a primary tenet they were supposed to meet and have failed to. Coal-powered thermal power plants, known to be heavily polluting and unsustainable, did not meet many of the CDM’s basic requirements and the CDM Board has finally inched closer to showing the coal industry where it belongs—out. 

Subscribe to Daily Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.