U.N. regulators who administer the Clean Development Mechanism have objected to dozens of developing-world projects in recent months, questioning whether projects produce a real environmental benefit and raising concerns about some independent auditors of the projects, the Wall Street Journal reports.

In June, one senior figure suggested there may be faults with up to 20 percent of the carbon credits already sold. Since these are used by European governments and corporations to justify increases in emissions, the effect is that in some cases the process has added to the net amount of greenhouse gas in the atmosphere.

In 2007, the CDM’s executive board rejected nine percent of proposed projects and held up another 21 percent for further review. In previous years, practically every project was passed.

If the CDM’s approach were to be discredited, companies could be forced to stop buying carbon credits and will have to cut their own emissions – a move that would cost companies and consumers significantly more.

A member of the U.N. board recently expressed concern that the system may be open to what she called “collusion” between auditors and project developers to push through environmentally dubious projects.

The stakes for both groups are huge. The global carbon market will see 4.2 billion tons carbon emissions transacted during 2008, up 56 percent from last year, according to research from Point Carbon. At today’s prices, that would make the market worth $92 billion.

A report written last month by the Stockholm Environment Institute and commissioned by WWF Germany examined the voluntary carbon offset market.