The GAO said Europe’s cap-and-trade system had created “a functioning market for carbon dioxide allowances, but its effects on emissions, the European economy, and technology investment are less certain.”
According to both the GAO and several experts, one of the biggest problems facing the CDM is that it is hard to determine if the green projects rich nations are funding in developing countries such as China or India would have taken place without the funding.
This follows a GAO report from September that said the growing U.S. market for carbon offsets is so loosely regulated that it offers consumers “limited assurance of credibility.”
Opponents of President-elect Barack Obama and congressional Democrats’ plan to adopt a cap-and-trade system for emissions have seized on the GAO study as a reason to halt the plans.
In response to U.S. criticisms, Yvo de Boer, head of the U.N. Climate Change Secretariat, told Reuters that he sees the GAO report “as offering a number of constructive suggestions.”
De Boer told Reuters that the U.N. is learning and that “there is room for improvement.” He also said governments at the climate meeting in Pozan, Poland are discussing ways to improve the CDM as part of a long-term treaty to combat climate change.
In October, Jorund Buen, director at Point Carbon, said some companies are forging documents in an attempt to gain certification for projects under the CDM.
In August, the World Bank said that CDM is “expensive and time consuming” because it requires project managers to follow new rules regarding emission reduction technologies.
Earlier this year, U.N. regulators who administer the CDM questioned whether projects produce a real environmental benefit and raised concerns about some independent auditors of the projects.