WWF has published a report rating different DOEs according to the number of their validated projects which pass the UNFCCC EB without being reviewed. The report was compiled by German Oeko-Institut.
Here’s the methodology for the ranking:
For this first rating, the basis for the rating of DOEs is a statistical evaluation of decisions by the CDM EB on requests by DOEs for registration of a project. The rationale for a statistical evaluation of EB decisions on requests by DOEs is that the number of reviews or rejections of projects by the EB may over longer timer periods and over many projects express to what extent the DOEs live up to the expectations of the EB.
For example, a DOE with a high percentage of projects being rejected fails on average more frequently to meet the requirements and expectations of the Board and should thus have a lower rating than a DOE with a low percentage of projects being rejected. Similarly, if the CDM EB requires that corrections have to be made to a PDD or a validation report before the project can be registered, one can argue that the DOE has not ensured a sufficiently transparent or correct documentation of the project or the validation process. A key advantage of this approach is that it allows the rating to be estab- lished on publicly available information. This makes the rating transparent and reproducible.
The report then finds, as summarized by Point Carbon:
The number of project registrations directly accepted by the board fell to 36 per cent from 41 per cent since the 2009 rating. The EB rejected 7 per cent of projects submitted by auditors, according to this year’s survey of around 900 CDM projects, compared to 6 per cent calculated in last year’s survey. “Since our rating in 2009, discrepancies did not decrease – they increased,” said Juliette de Grandpre, climate policy officer at WWF Germany, in a statement.
The report found that Tuev-Nord of Germany performed best of the companies which audit the CDM, also known officially as designated operational entities (DOEs). Tuev-Nord scored a ‘D’ in the range of ratings drawn up by WWF, while UK headquartered BVC scored the worst with an ‘F’ rating. All other DOEs surveyed – DNV of Norway, Switzerland-headquartered SGS and Germany’s Tuev-Sud – all got a ‘E+’ rating.
From “poor” to “no way I’m ever gonna contract them again” =)
Source: WWF Report
There’s nothing wrong with the numbers, the problem is simply that they don’t say too much about the performance of the DOEs. Different technologies and methodologies of validated projects certainly account for a large part of the difference between different DOEs. Another factor is timing, since the EB tends to randomly focus on a certain project type at a given time, right now for example you’d have a hard time registering your typical Chinese hydropower project, while the same project with exactly the same quality of documentation would have passed without any complications a year ago. There are too many random factors, the most important of which being the inconsistent behavior of the EB itself.
I don’t disagree with the conclusions of the report, however. Schneider, one of the authors of the report, lists the following changes that could make auditors more transparent and improve their performance:
- Publishing the meeting reports of the accreditation team
- Publishing the results from spot checks of auditors by the UN
- Publishing the issues which trigger a request for review; and
- Faster application of requests by UN climate talks for policy framework to address non-compliance.
The performance indicator I’m most interested in is another one: how long does it take a DOE from publishing the PDD until they finally upload the validated version to UNFCCC? To minimize the technology factor, one could limit the methodology to ACM002 and maybe only count projects from China (where most of the projects are located). Of course, you still cannot eliminate the impact of different quality standards of project developers, that’s why such a ranking would still be far from perfect.
All the above illustrates that a project based approach is not getting us anywhere in the long term. To use carbon credits as a tool to finance emission reducing activities and at the same time guarantee that they are real (additional), we need to have crystal clear eligibility criteria up-front, not a year long gamble after which your project may or may not see carbon revenue.