UN talks offer no signal for CDM

CDM reform took a backseat role in Bangkok as delegates clashed on other issues. Reform of the Kyoto protocol’s clean development mechanism (CDM) was on the agenda at the Bangkok meeting, but in common with previous UN meetings - aimed at preparing the ground for crunch talks in Copenhagen - no tangible progress was made.A document shortening the official negotiating text on market mechanisms was published on Thursday, but this has done little to move the talks forward, observers said. “The market mechanisms have been mixed into the discussions on finance,” said Andrei Marcu, head of regulatory affairs, environment and climate with Mercuria Energy Trading. He added: “Is this encouraging investments? Probably not, as it creates uncertainty.”
“China, India and Brazil are not so interested in CDM reform,” said Jos Cozijnsen, a consultant for US-based Environmental Defense Fund. He suggested those countries would be better off introducing sector-based initiatives. (Source: Pointcarbon)

Reform
Investors are waiting for news on possible reform to the CDM after the end of 2012, which include a possible expansion to other sectors and making the mechanism more efficient.
But at Bangkok highly contentious issues such as future commitments and how to finance cleaner technology and adaptation in developing countries took up the lion’s share of the negotiations, so CDM reform was not addressed in detail.
Right now, not all countries are equally interested in discussing the issue, delgates at the talks said.
But most developing countries, including China, remain circumspect about sector-based emission targets and the generation of carbon credits from such an approach.

Limit
At Bangkok, limiting the use of carbon markets was on the agenda – both in terms of volume and geography.
Developing countries are worried that an overemphasis on the market will limit finance available for mitigation and adaptation activities in poor countries.
Several of them, including China, have argued strongly that a strict limit must be imposed on how many credits developed nations can use to meet their emission reduction commitments.
Most rich countries say no such restrictions should be introduced.
“Such a limit would be an arbitrary number, and it would limit developing countries’ capacity to contribute to mitigation,” Howard Bamsey, Australia’s lead negotiator told Point Carbon News.

Other mechanisms
The future role of the CDM is in doubt as other potential market mechanisms emerge as alternatives.
The world’s carbon markets could see potentially huge supply of credits from reduced emissions from deforestation and degradation (Redd) projects and a sectoral crediting mechanism over the next decade.
Some, such as the EU, have proposed to restrict CDM to least developed countries from 2013, meaning that larger developing nations would only be able to generate credits through sector-based targets.
But talks on that issue failed to address the question in detail and little progress was made, delegates said.