The United Nations is the main global policeman in an effort by wealthy nations to reduce the impact of their own pollution by paying for cleanups in the developing world. The program, known as the Clean Development Mechanism, is one of the most important coordinated efforts to attack global warming.
In recent months, however, U.N. regulators who administer the program have objected to dozens of these developing-world projects, ranging from hydroelectric plants to wind farms, questioning whether the projects would produce a real environmental payoff.
U.N. regulators are also concerned that some independent auditors of these projects, who are responsible for vetting their environmental legitimacy, have been letting project developers push through ventures of questionable environmental value.
The issue is two pronged: Corporations buying carbon offsets want to get the most bang for their buck. And project developers want to build high value projects for cheap, increasing their bottom line. This creates a tremendous incentive for fraudulent, or at least cheap offset projects. Add to that the fact that many of these offset projects are in developing countries, and the administrative and oversight problems become enormous.
The U.N. says it isn’t suggesting that most of the developing-word projects are illegitimate. Evaluating whether a project would have been built without carbon-credit revenue is a complex judgment call,
The U.N. is taking a closer look at project developers, mostly Europe based companies, who set up projects to sell credits to buyers. Also facing scrutiny are the 3rd party auditing firms who inspect and certify to the U.N. that the projects are environmentally sound.
A member of the U.N. board, Christiana Figueres, expressed concern that the system may be open to what she called “collusion” between auditors and project developers to push through environmentally dubious projects.
