Page last updated at 12:24 GMT, Tuesday, 10 June 2008 13:24 UK

Mechanics of curbing climate change

Yvo de Boer (Image: AP)
Yvo de Boer

Negotiators from more than 172 countries are meeting in Bonn to hammer out a deal that may culminate in a new global climate agreement. In this week's Green Room, UN climate chief Yvo de Boer argues that negotiators want to see more of the Kyoto Protocol's Clean Development Mechanism, not less.

Solar panels in a Niger village (Getty Images)
The challenge is now to design a deal that will deliver the type of emission reductions that the scientific community tells us are urgently needed
When countries gather for UN climate change negotiations, they meet to respond to what can arguably be described as the greatest challenge ever to face humanity.

The prospect of rising sea levels, ever more incidences of drought and flooding, along with water and food shortages for billions of people, are monumental threats.

The extent to which greenhouse gas emissions can be reduced will determine our future, that of our children, and of generations to come.

Designing a new international climate change agreement, possibly the most complex and most ambitious ever conceived, is a tough task.

Delegates meeting this week in Bonn are looking at how to provide the clever financial architecture that will enable countries, not least those developing rapidly, to green their economic growth and avoid the mistakes made by the developed world.

Whilst a new agreement is currently being negotiated, the Kyoto Protocol is already up and running. It already provides part of the blueprint of the "Copenhagen outcome", the agreement that negotiators are hoping to achieve when the Danish capital hosts the annual UN climate summit in 2009 .

For example, the protocol's Clean Development Mechanism (CDM) allows industrialised countries to generate emission credits through investment in emission reduction projects in developing countries. This measure is in addition to the implementation of climate-friendly policies at home.

The issue is whether sustainable development projects would take place without the incentive of carbon credits
The CDM has managed to create an internationally recognised currency for trading emission cuts: the Certified Emission Reduction (CER).

Each CER is equivalent to one tonne of carbon dioxide, and it has brought the power of the market to bear on the problem of climate change, engaging the private sector in the developed and developing world.

Around two billion CERs are expected to be generated by the end of the first phase of Kyoto in 2012.

CDM renewable energy and energy efficiency projects registered in 2006 alone are expected to result in $5.7bn (2.9bn) of capital investment.

This is about three times the official development assistance available for energy policy and renewable energy projects in the countries in which CDM investments took place; and almost as much as private investment in renewable energy and energy efficiency in those countries.

More than hot air

In recent times, journalistic reports and academic studies have been questioning the "additionality" of CDM.

Pollution from energy plant

The issue is whether sustainable development projects would take place without the incentive of carbon credits.

The reports claim that project developers often don't need the incentives of carbon credits to shift towards clean technologies, and they criticise the high profits that can be made with some types of project.

The CDM project type expected to generate the most CERs at this point in time is the destruction of the gas trifluoromethane (HFC-23), which is a waste product from the manufacture of a refrigerant gas.

HFC-23 is 11,000 times more potent than carbon dioxide in terms of its ability to trap heat in the atmosphere.

Whilst substantial profits can be made, it is crystal clear that without CDM there is absolutely no financial incentive for HFC-23 to be incinerated, and that large amounts of the gas have been destroyed thanks to the mechanism.

Considering that CDM was designed to employ the strengths of the market to identify low-cost opportunities for emission reductions, it is not surprising that these low-hanging fruits were picked first.

But allegations of genuine flaws in and abuse of the system are taken extremely seriously by the Executive Board, which oversees the mechanism, and by all the countries that are party to the Kyoto Protocol.

On the one hand, countries are constantly looking at how to improve the mechanism, which involves permanent readjustments of the rules and regulations, along with the measures that determine what sort of project can and should be brought inside the scope of the CDM.

Man sitting on a pile of waste (Getty Images)

Just as importantly, countries are also looking at the mechanism's scale and scope, effectiveness, efficiency and accessibility.

Perhaps even more importantly, the CDM has already achieved significant emission reductions, but it has the potential to do much more when applied not only to individual projects, but to groups of projects, programmes and possibly even to entire sectors of the economy.

Negotiators are clearly indicating that they want to see more of the CDM, not less.

Parties to the Kyoto Protocol only recently agreed that the mechanism would continue beyond 2012, which is the year that the CDM's first commitment period expires.

The challenge is now to design a deal that will deliver the type of emission reductions that the scientific community tells us are urgently needed.

With hardly more than a year of negotiating time left to design the Copenhagen agreement, there is a great sense of urgency to move forward.

What exactly will be written into the agreement remains to be seen, but it is clear that expanded, market-based mechanisms will play a central role.

Yvo de Boer is executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC)

The Green Room is a series of opinion pieces on environmental topics running weekly on the BBC News website

Do you agree with Yvo de Boer? Are trading mechanisms such as the Clean Development Mechanism delivering real emission cuts? Will a strengthened system ensure that atmospheric carbon dioxide is reduced by as much as climate scientists say is needed? Or is it a mechanism of dubious morality that is being abused by companies looking to make a quick profit?

"The extent to which greenhouse gas emissions can be reduced will determine our future, that of our children, and of generations to come" There is not a shred of factual evidence for this fantastical claim. Such gross and ignorant speculation by a political functionary with a job to support should be ignored for the nonsense it is. As usual, the UN is the last place to look for reliable information, or rational debate.
Jon Anderson, Woking

Here we sit teetering on the edge, much of the offsetting (even if does work) results in a Carbon reductions some time in the future. However, if we cross a "tipping point" in our climate, while we are waiting for the offset to "kick in", we could find ourselves in a similar situation to putting a car in reverse after you've driven off a cliff!
John Grant, sheffield

The CDM scheme has a lot of loopholes that can be exploited by countries/entities with money. One possible solution would be to mandate a fair minimum level of CERs before they can purchase any credits elsewhere. These minimum levels should be based on per capita consumption or pollution. This way each country is forced to look at its own emissions first.
Aparna, Redmond, USA

CO2 is not a poison! Climate change will always be that. How arrogant to think Mankind can alter the Atmospheric Greenhouse Gases when we only contribute 0.1% of the total! 99.9% is from "Mother Nature" Stop all this Carbon Claptrap and spend money otherwise thrown away, or handed to frauds like Al Gore and improve the impoverished countries directly. The UN is weak and wimpish. Kyoto is a political sop that has absolutely no substance or effect on the planet other than to increase the price of food and waste Trillions of Dollars to no effect whatsoever.
Brian Johnson, Farnham Surrey

All this so-called carbon trading is a complete nonsense. The only way to cut emissions is to stop pumping oil, to stop mining coal and to stop piping natural gas. But what are our leaders asking for now that the price of oil has gone up a bit; "Pump more oil, mine more coal, pipe more gas!!" The only purpose of emissions trading is to make money for governments and industry. It certainly wasn't invented to reduce emissions.
P Coil, Birmingham

All in all I support the CDM but how many CDM beneficiaries really lack the capital to invest in lower emission technologies? Some very wealth and heavily polluting companies operate in developing nations (sometimes to avoid costs associated with social and environmental regulations in developed nations). Shouldn't some of these well and able companies be held more accountable for polluting rather than awarded for doing what similar companies in the developed world are paying for themselves?
Brad Mulley, Bangui, Central African Republic

The effects of climate change have alresdy started showing up in the form of unprecedented climatic changes. This is the right time that we take up measures to restore nature's balance by the way of cutting the emissions with a sense of urgency. Thanks to the efforts being taken by the UNFCCC in bringing together 172 nations of the world to work towards this goal, we can hope for a greener, cleaner environment in the coming years.
Kanchan Dharwar, Gurgaon, India

The CDM scheme has been and will continue to be widely abused. IF climate change does occur AND its downsides outweigh its good points (time alone will tell) then it is best that we now focus on developing countries in terms of infrastruure, education and prosperity. These areas make a real difference to people on the ground and will enable them to cope with any changes. The CDM scheme on the other hand involves flaky economics on top of fuzzy science with no meaningful impact for the billions in developing world. Get rid of this global quango.
Patrick Murphy, Cork, Ireland

Mr De Boer is clearly living in a state of denial when it comes to the CDM. Countless studies have exposed the fact that despite its benevolent development rhetoric, it has not brought about any tangible benefits in this area, and many communities in Southern countries have been expelled from land they once had access to in order to develop these projects, or are suffering the impacts of secondary pollution from the big industrial location are the typical recipients of such carbon financing. Furthermore, the big industrial polluters who are getting all the money are often using the large profits to simply expand their polluting industries. Carbon offsetting like this reduces the business of making emissions reductions down to a narrow focus of supposed 'cost effectiveness', and in doing so ignores important considerations such as human rights, North/South relations and the wider social and economic circumstances in which the supposed emissions cuts are taking place. Making emissions reductions in distant countries because it is cheaper to do so than here is 'carbon colonialism'.. treating cheap emissions reductions as a commodity to extract and export for the benefit of Northern consumers, companies and countries.
Kevin Smith, London

Carbon credits by themselves only have the potential to slow the planet's road to ruin. Industry is a worm when it comes to finding ways around things to make a profit when they think rules are there to slow them down or give their competition an advantage. But it doesn't have to be this way. Industry has the expertise to invest in products and services which support the common good. We must stop thinking of capping emissions or trading them as though we were a bunch of people standing around the tailpipe of an SUV trying to think of the best way to plug it up while the engines still on. There isn't time for incremental change or to relearn that companies will game the system as some did with HFC23 if they feel they can get away with something. Fashions are changing and those caught on the wrong side of the fence with dirty industry will be at a disadvantage.
Dale Lanan, Longmont, Colorado USA

Unfortunately I can neither agree nor disagree based on this article, as Mr de Boer presents nothing I would regard as evidence. I certainly think a market mechanism of this type is required and I hope the existing mechanism is indeed working as he states, but how on earth can an ordinary person judge such things?
Daniel, London

Act locally and think globally. Plant green trees today and see the difference tomorrow. Cut pollution and let your child breathe fresh air. Act today and let the future generation sing and dance in the fresh air. Make the global world green and gift them.
Niteesh Singh, Baroda,India

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