Tuesday, November 13, 2007

United Nations admits carbon offsets fraud - lack of quality projects will result in slowdown for the industry - vows greater scrutiny

LONDON, Nov 13 (Reuters) - Tighter United Nations scrutiny of projects to cut greenhouse gas emissions will slow the supply of carbon offsets only until project quality improves, the U.N. official who heads carbon trading said on Tuesday.

The Kyoto Protocol on global warming puts limits on emissions of planet-warming gases by industrialised countries, but allows them to buy carbon offsets from developing nations.

That carbon trade, worth $5 billion last year, has attracted speculators who invest in projects to curb greenhouse gas emissions and sell the resulting offsets.

But there has been public criticism of some projects in the Kyoto trading scheme, including accusations of fraud in India.

Increased U.N. staffing has now allowed more review of the schemes, slowing the rate of approvals. "I see it as a transitory situation... improved quality of projects will make it possible to register more," said Halldor Thorgeirsson, director of sustainable development mechanisms.

Newly observed problems included missing information and lack of clarity.

"I would expect this to have stabilised by the middle of 2008. There will always be reviews but much lower fraction than we are seeing now."

A lack of capacity among private sector auditors -- supposed to screen project applications -- was also a concern, he said.

Here is the full article.