Suspension of UK firm puts UN’s CDM under spotlight

The UN’s carbon offsetting scheme, known as the Clean Development Mechanism (CDM), allows a country with an emission reduction or limitation commitment under the Kyoto Protocol to implement an emission reduction project – such as a rural electrification scheme – in a developing country, in order to earn salable certified emission reduction (CER) credits. 

Each CER is equivalent to one tonne of CO2, which can be counted towards meeting Kyoto targets. 

SGS UK, reported to be the largest accreditor of CDM projects, is the second CDM verifier to be suspended in the last 12 months. 

Concern has been expressed that its suspension will cause further delays in the supply of CERs and this market constraint will, in turn, push up prices. 

It will also add grist to the mill of those who oppose the CDM on principle, arguing that the system allows western polluters to buy their way out of more costly measures for cutting emissions and fails to adequately ensure that projects selling CERs have delivered real and quantifiable emission reductions. 

SGS UK’s suspension came after a spot-check showed up problems in the company's procedures for vetting emission reduction projects and called into question the qualifications and skills of some of its staff.

Although SGS UK immediately identified the corrective action needed to address the issues raised at the spot-check and undertook to rectify them by a target date of the end of October, the CDM’s Executive Board decided to suspend the company until an on-site assessment could verify that all necessary corrective action had been taken.

Launched in 2006, the CDM has so far registered more than 1,650 projects and is anticipated to produce CERs amounting to more than 2.9 billion tonnes of CO2 equivalent in the first commitment period of the Kyoto Protocol from 2008 and 2012. 

It is expected that reform of the CDM will be up for discussion at the UN climate talks in Copenhagen in December.