UN's carbon role questioned as $200 million cash pile sits idle
Its accounts show almost half of the current annual budget of $32.9 million is to pay staff, which still number around 150 despite a massive drop-off in new projects seeking registration.
U.N. data shows just 3 projects a month were registered on average this year, against 268 a month at the peak of activity in 2012. This means a staff of 10-20 people would be sufficient, said Axel Michaelowa, a University of Zurich climate policy academic and founding partner of consultancy Perspectives.
Michaelowa, who was seconded to the CDM during its busier periods, said surplus cash could be used to prop up the market by buying credits or develop new carbon market mechanisms earmarked to feature in a new climate deal
A CDM spokesman said the board had no current plans to cut employees but was conducting regular reviews of its operations.
The board is also trying to drum up demand for the credits by promoting them for uses other than meeting Kyoto targets.
While the CDM has enough money to see it through several years, a separate Kyoto Protocol programme, the Adaptation Fund, is struggling to fulfil its aims of helping the world's poorest nations cope with the effects of climate change.
Governments agreed to help finance the fund with a 2 percent levy on CDM credits issued for projects such as building sea defences or developing drought resistant farming techniques.
But the plummeting value of the credits has hit the Fund's coffers, with projects only getting the go-ahead last year after several west European nations donated 54 million euros.
"We were desperate for funding and we were successful in getting donations but it is not sufficient and we continue to look for ways to get stable sources of funding," said Laura Dzelzyte, vice-chair of the Adaptation Fund.
Officials and observers say scaling back the CDM or redeploying its cash will be difficult because of rigid rules that require almost 200 nations to agree.
"Institutions created internationally are difficult to reform and even harder to put to sleep, especially if they have a stockpile of revenue that allows them to continue regardless of the demand," said the European Commission's Werksman.
The CDM was created in 1997 under the Kyoto Protocol to help industrialised nations meet greenhouse gas targets more cheaply and promote sustainable development in poorer countries not bound under the pact to limit their emissions.
Its rules were crafted over years of U.N. negotiations and CDM credits have been used mainly by European countries and Japan after the United States failed to ratify Kyoto.
Alpha Oumar Kaloga of environmental campaign group Germanwatch said developing countries would not support a downscaled CDM because of a perception it may "distract from the finance commitment wealthy nations have under the UNFCCC."
Developed countries have agreed to mobilise $100 billion a year by 2020 to poorer nations, but the Green Climate Fund launched to help meet that goal had received donations of just $34 million by the end of 2013.
- TekWear partners up on new crop monitoring technologies
- Harvest delays impact crop performance, study shows
- Hogs were the exception to the bullish rule Thursday
- Sugarcane aphids found in North Carolina
- Online registration open for Dec. 15-16 AGMasters conference
- Export data, equity gains boost crop futures Thursday morning
- How much corn can the ethanol industry use?
- Economist: Taxing P could reduce risk of algal blooms
- Commentary: Government wants farmers to quit farming
- Ag markets made a generally mixed showing Thursday night
- What is the relationship between maturity group, yield?
- Commentary: Ambulance-chaser lawyers take on Syngenta