: 27 May 2010 14:15 CET Last updated: 27 May 2010 19:25 CET
The pace of CDM project registration can be doubled by 2011, according to EB member Hugh Sealy.
Measures taken by the executive board (EB) to speed up the registration process for clean development mechanism (CDM) projects are taking effect, Sealy told delegates at the Carbon Expo event in Cologne, Germany.
“We can get to 1,000-1,200 projects next year. Give us some time, we can reform and scale up the CDM from a rate of 400-500 projects a year,” said Sealy of Barbados, who sits on the executive board that administers the CDM.
But market participants said that without drastic reform, an increase of this magnitude might not be enough to convince policymakers that the mechanism should play a big role after 2012.
As possibilities for larger CDM projects dwindle, developers are turning to smaller and smaller projects, said Marc Stuart, the former chief executive of developer Ecosecurities.
Even if the EB could increase the rate of registration for new projects, the amount of certified emission reductions (CERs) that could be generated would not rise by the same extent.
According to UN data, 2,213 CDM projects have been registered, giving a potential yield of some 1.79 billion CERs by the end of the Kyoto protocol compliance period in 2012 if these projects deliver all the emissions reductions outlined in design documents.
Recent EB efforts have resulted in an uptick in registrations, with 686 projects gaining UN approval last year, compared to 431 in 2008 and 426 in 2007, according to Point Carbon data.
But in reality many projects generate much fewer credits promised in these blueprints, and longer delays in getting projects registered and issued with CERs has prompted some analysts to downgrade their forecasts for issuances of CERs by the end of 2012.
Both Barclays Capital and UN research unit Unep Risoe estimate that fewer than 1 billion credits will be issued by the end of 2012.
Developers are calling for changes that would enable clusters of projects to get registered and issued with credits rather than project-by-project approach currently used by the EB.
“We need to be allowed to produce projects with multiple technologies on multiple sites,” said Gareth Philips, chief climate change officer at Sindicatum, a carbon project developer.
However, the EB’s Hugh Sealy said he believes the project-by-project approach is capable of achieving a scaled-up CDM without having to design a new mechanism from scratch.
“We are working our butts off tackling the reform of the system. I find it strange that we are being seen as yesterday’s news,” he added.
Fellow EB member Pedro Martins Barata was more doubtful that a project-based CDM could be expanded on the scale required to meet demand for offsets.
“We are probably going to issue around 1 billion CERs by the end of 2012, but we face a possible demand of around five times that,” said Portugal’s Barata.
“I’m not going to write off the CDM, I think it can be scaled up. But to soak up all that demand we will need to work on all sorts of mechanisms at the same time,” he said.
This includes a scheme to generate carbon credits from reduced deforestation and degradation (Redd) as well as a sectoral initiative to credit other emission cuts in the developing world, Barata told delegates.
By Ben Garside – email@example.com
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