The U.N. body that oversees carbon credit trading said Thursday it was reviewing 10 Chinese wind power projects amid questions about how Beijing obtains money through the system.
The board of the Clean Development Mechanism is looking at how Chinese power prices affect the viability of the projects, which would influence whether they are eligible for CDM money, the board’s chairman, Lex de Jonge, said in an e-mailed statement.
The CDM is expected to be a key issue at next week’s global climate summit in Copenhagen, Denmark. European governments want to change the system, due partly to its failure to slow rapid emissions growth in China -- the biggest emitter of carbon dioxide and other gases that scientists say trap the sun’s heat and are changing the climate.
China has received millions of dollars through the CDM, which allows industrialized economies to meet commitments to cut greenhouse gas emissions by paying developing countries to curb their own instead. But environmentalists say some Chinese wind and hydropower projects improperly receive CDM money without showing they would not be built anyway, a requirement known as “additionality.”
A Chinese official and an industry consultant said the CDM board suspended approval of Chinese wind projects in July amid questions about cuts in prices that China’s utilities pay for wind power. Lower prices would make more projects qualify for CDM credits because they would need more foreign money to cover their expenses.
“The projects in question are not suspended, they are under review and at various stages of assessment,” de Jonge said. He said the CDM board, based in Bonn, Germany, would decide on the projects at a meeting this week in Copenhagen.
CDM officials raised questions after Beijing cut wind power prices in July, according to Lin Wei, general manager of Easy Carbon Consultancy Co. in Beijing, a consultant for CDM projects.
“They thought the government believed CDM money would be coming in anyway so the government was making prices lower so that Chinese projects could have extra ‘additionality’ to get extra funding,” Lin said Wednesday.
However, Lin and Wang Shu, an official of the Chinese Cabinet’s Climate Change Department, said the price cuts reflect lower costs for wind projects as technology improves.
Construction of the projects is going ahead without the CDM board’s approval, Wang said.
“Of course we don’t agree” with the board, Wang said. “They totally know nothing about the real situation in China’s wind power (industry).”
