PCF

Large Hydro Still a Large Problem for the CDM 

As the CDM approval process nears the point at which the first projects may soon be registered, large hydro projects continue to be a concern. In addition to the millions of credits already being claimed by CDM large hydro projects, many more have signalled an interest in using the CDM. At the same time, concerns about the non-additionality of large hydro projects has been borne out by the validation opinions for the Dutch CERUPT projects and the baseline methodology review of other large hydros, underlining the need to exclude them altogether.

The Good, the Bad and the Dammed Ugly

In October 2002, International Rivers Network and CDM Watch published “Damming the CDM: Why Big Hydro is Ruining the Clean Development Mechanism.” The report showed that a significant proportion of proposed Clean Development Mechanism credits could be captured by “non-additional,” business-asusual, large hydro projects. “Damming the CDM” warned that this trend threatened to undermine the effectiveness and credibility of the Kyoto Protocol.

The seven months since our report was released have seen positive and negative developments relating to hydro in the CDM. On the positive side, the Dutch government rejected the largest and most controversial hydro project proposed for credits so far, Bujagali Dam in Uganda. Also highly positive is the Dutch and Germans’ move toward requiring that hydro projects from which they source credits comply with the recommendations of the World Commission on Dams.

The World Bank claims that its flagship carbon market vehicle – the Prototype Carbon Fund (PCF) – is focussed primarily on renewables, and includes small hydro as one of the most common renewable technologies it is developing. This is deliberately misleading. The Bank includes hydro projects up to 43MW as “small hydro” in its calculations, many times the commonly accepted capacity limit of 10MW. In fact, of the 8 CDM hydro projects currently being developed by the PCF, 5 are in excess of 10MW and thus large hydro projects, not renewables. These 5 projects generate nearly twice as many carbon credits as the PCF’s 8 existing CDM renewables projects combined.

Submitted to the World Bank’s Prototype Carbon Fund

Comments on Project Design Document for the World Bank Prototype Carbon Fund El Gallo Large Hydro Project (Mexico)

Submitted to the PCF

In the six months since our last CDM large hydro status note, the World Bank has continued to unveil new CDM large hydro projects of questionable additionality - including the largest hydro project in its carbon portfolio to date. None of these projects have demonstrated compliance with the recommendations of the World Commission on Dams. The World Bank continues to cling to the fiction that all of the projects are "small hydro".

Ken Newcombe
Fund Manager, Prototype Carbon Fund
The World Bank
1818 H Street, NW
Washington, DC 20433

Dear Mr. Newcombe,

We are writing to you concerning your erroneous and misleading use of the term "small hydro" to describe all hydroelectric projects in the Prototype Carbon Fund’s Clean Development Mechanism portfolio. We ask that you correct this language on your website and in future publications.

Submitted to Japan Consulting Institute (JCI)

Comments on Non–Additionality of 16 Small Hydros in the Czech Republic (World Bank PCF Joint Implementation Project)

Submitted to Det Norske Veritas (DNV)