Larvatus Prodeo

The big questions for those in Poznan are those around financing. In what ways do existing instruments need reform? What novel measures could be devised to reign in emissions growth in areas like air and sea transport? So it was with some interest that I noticed a little PR at work. The administrators of the Clean Development Mechanism, scrambling for public recognition, announced the awards for the 2008 Changing Lives photo contest. Unsurprisingly, there is an eerie resonance between the winning entries and criticisms of the CDM itself, captured mostly recently by the US GAO report. That report, far from being simply ‘US criticism of the UN’ is the culmination of a year’s work, including engagement with some 26 experts, and on the effectiveness of the CDM.

The pictures that emerge are of ambivalent participants, and clunky principles that demand attention. The winning photograph is a local solar installer in a residential project in South Africa. The photographer has tried to use an on camera fill flash, but doesn’t seem to have applied any exposure compensation, so the subject – an installer awkwardly crouching – is rather underexposed. The third placed photo, ‘Indian Sugar Power’, also feels like an uneasy moment has been captured. A boy is holding a loose sugar cane on a (presumably moving – we can’t tell because the shutterspeed is set too high) truck and glaring, unemotionally into the camera. The four placed photo, ‘Mount Bagasse’, actually shows some aesthetic effort, though it’s hardly in line with the intent of the competition – to showcase the way the CDM is ‘changing lives’. Instead, the subjects are thoroughly dominated by technology and the flattened by the landscape as if in an ironic homage to the romantic modernists.

Though the aesthetics of industrial waste gas destruction are conspicuously absent from the photo contest (they make up a disproportionate number of Certified Emissions Reductions), the GAO provides a nuanced view from experts on the issue. Some believed it a good move because it probably wouldn’t have happened anyway, and these cheap ($1, sold on for $25) offsets are finite and rapidly diminishing.

However the sense that the CDM, in a Frankenstein-esque move has overtaken its original role as provider of, well, finance for some clean development projects and devoured other development pathways (such as direct legislation) is perhaps the most notable punchline of the GAO report, which notes that

… using the CDM to involve developing nations in efforts to address climate change may not always have positive effects. For example, some experts said the mechanism encourages host countries to rely on external funding from industrialized nations. Others went further, saying the CDM can dampen or delay efforts by host countries to reduce emissions on their own. The CDM does not credit emission reductions that result from newly imposed policies or standards, in part because it would be difficult to demonstrate that emission reductions were a direct result of the law. This may pose a dilemma for host countries that want to implement low-carbon policies but also want to attract investment through the CDM. Given these considerations, many experts and researchers have said the CDM would best be used as a temporary tool to help transition countries toward broader commitments (p.38).

Which isn’t to say that policy insiders are aware of this problem. Flows through the CDM will almost certainly be explicitly pulled if developing countries don’t signal an intent to get on board an international mitigation effort down the track. Perhaps the most telling data from the work of the auditors was this graph which shows the inherent ambiguities in the notion of ‘additionality’:

The CDM isn’t just asphyxiating alternative technological development, but propping up industries that were well on their way too:

According to a review of available research, between one-third and one-half of CDM projects involve some type of technology transfer. Such transfer is much more common in certain types of projects, such as industrial gas projects that utilize “end-of-pipe” technologies developed in Europe and Japan. Apart from industrial gas destruction, the project types most likely to involve technology transfer appear to be wind power, landfill gas capture, and agriculture (biogas). However, one expert pointed out that most of the wind power capacity represented in the CDM project pipeline is sited in India and China, countries that have supported domestic wind industries prior to the CDM (p.44).

In Australia, of course, has devised its own solution to the question concerning technology. Cars in, wind out. One might be forgiven for thinking that our debate is completely arse backwards if we can’t even figure out how to transition away from fossil fuel dependent stationery energy, let alone what some abstract carbon target should be. Howard was a denialist through and through, but at least he put his priorities on the table – like looking after Australia’s natural advantages. Like having babies. and digging things up.

On a more positive – if entirely unrelated – note, get your daily does of hope and the sublime in one hit from Sarah Wilson’s extraordinary documentary slideshow of Texas School for the Blind prom.

Update: Point Carbon is reporting that a ruling on whether to include new HFC-23 production in the CDM has been delayed until June. Looks like it’s part of a broader trend of delays to hit the process.

Elsewhere: Kevin Smith in New Matilda: Money Can Save the World:

The winners are energy intensive companies, whose profit margins have benefited enormously in the short term through the lucrative trade in the credits themselves. Because of fundamental flaws in the design of the CDM, industry has been able to buy cheap carbon credits to meet their emissions commitments and avoid the cost of shifting to low carbon technologies. Add these savings to potential windfalls from new trading options in derivatives and other exotic financial services and it’s no surprise there is such a gold rush for this lucrative market.

Conversely, Southern countries have lost out enormously. Many projects, such as the waste incinerator in India, have been imposed on communities without their prior, informed consent…

Political will must instead be directed at ensuring that Northern countries meet their commitment to providing finance to the South that isn’t tied to undemocratic institutions like the World Bank and that doesn’t lock those countries further into the spiral of debt.