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Trading Carbon : November 2011
18 PEOPLE Susanne Haefeli-Hestvik provide for upfront investment security by means, for example, of positive lists," she said. Developers of projects on a so-called "positive list" are likely to receive the regulatory green light, because they are automatically deemed to have fulfilled the "additionality" criteria due to the nature of the project type. Thus, avoiding a complex procedure to try and prove that the carbon finance is integral to a project going ahead. The issuance of credits presents a much bigger hurdle for developers of these projects than getting them through the initial registration process. This makes the timing of returns on investment in the projects more difficult to determine, she added. As Trading Carbon went to press in mid- October, some 1,210 projects had been awarded UN carbon credits, but just six of these schemes are located in LDCs. With the first commitment period of the Kyoto Protocol due to expire at the end of 2012, negotiators at this year's high-level climate change talks in Durban will continue to seek a successor regime, or find a way to extend the treaty, and so ensure the continuation of its flexible market mechanisms, including the CDM. Haefeli-Hestvik said she has not yet decided whether to attend the meeting. After the disappointment of the Copenhagen talks in 2009 -- when many believed a new international climate change treaty could be signed -- she avoided the talks in Cancun last year. Yet, despite the lack of optimism that an international breakthrough will be found in Durban, Haefeli-Hestvik is confident about the potential for the development of new, regional cap-and-trade schemes outside of the EU. "If you look at China's scheme it will be huge, and although the detailed rules are not yet out, GHG measurement methods do not differ very much around the world, so the basic building blocks will be the same as in the EU ETS and for the CDM," she said. l Susanne Haefeli-Hestvik has been with Clean Development Mechanism (CDM) project developer Tricorona for over five years, but has been involved with the CDM since its beginning. She feels the UN carbon offset programme has not been applauded enough for its achievements. Green groups have been particularly critical of projects that receive carbon credits for destroying industrial gases, such as HFC 23 and N2O, mainly because of the huge volume of Certified Emission Reductions (CERs) that have been generated. Just 23 HFC 23 and adipc acid N2O projects have accounted for 65 percent of the 753 million CERs awarded by the UN by mid-October. According to Haefeli-Hestvik, the large number of emission reductions achieved make these projects the "success story" of the CDM. "People claim there are environmental issues with these projects, but they have created such large emission reductions, at such a low cost, which would not have happened without the CDM," she said. Tricorona, which does not have any HFC 23 or adipic acid N2O destruction projects in its portfolio, has around 160 registered CDM projects in its stable, with a further 40--60 expected to be registered before the end of 2012. From 2013, however, the pipeline slows dramatically, with just 10 or so projects likely to be registered, she said. For projects approved from 2013 and beyond, carbon credits will only be eligible for use in the EU Emissions Trading Scheme (ETS) if they have been generated by projects in least developed countries (LDCs). But current low CER prices mean it is still too risky to pump swathes of cash into these regions, Haefeli-Hestvik said. On October 20, the front- year CER contract hit an all time low of ¤6.69 ($9.20) a tonne of carbon dioxide. "You need higher prices to develop projects in LDCs and to Susanne Haefeli- Hestvik, Tricorona: Optimistic, despite the current UN impasse November 2011 www.pointcarbon.com SUSANNA TWIDALE TALKS TO SUSANNE HAEFELI-HESTVIK, TECHNICAL DIRECTOR AT CARBON OFFSET PROJECT DEVELOPER TRICORONA ABOUT THE FUTURE OF THE UN'S CDM
December - January 2011