Response to Interpol's Guide to Carbon Trading Crime, from John Kilani, Director of UNFCCC's SDM programme

Response to Interpol’s Guide to Carbon Trading Crime from John Kilani, Director of UNFCCC’s Sustainable Development Mechanisms programme

(Bonn, 7 August 2013)

The UNFCCC applauds the thought and effort that went into producing Interpol’s Guide to Carbon Trading Crime.

The guide will be a useful resource for regulators and law enforcement agencies, and thus will contribute to the continuing maturation of carbon markets.

As the guide points out, as a financial market the carbon market has similar features to, and unfortunately faces the same vulnerabilities as, other financial markets.

The main value of the guide is its highlighting of potential risks, even citing actual cases for illustration when such exist.

More mention could have been made however, of the maturation that has already taken place in the carbon market.

The guide’s references to the challenges of demonstrating additionality in clean development mechanism (CDM) projects could have made mention of the tools available for testing additionality, the enhanced objectivity introduced through the development of the guidelines on the assessment of investment analysis, the guidelines for objective demonstration and assessment of barriers and the steady and significant increases in stringency of standards and requirements, particularly in the past several years.

The guide's references to designated operational entities (DOEs), the third-party certifiers that validate CDM projects, were outdated and contribute to a negative presentation of their important role in the CDM and their relationship with project participants. The guide should have made mention of significant improvements made in recent years in the CDM accreditation process and the much closer working relationship between DOEs, through the DOE Forum, and the CDM Executive Board in recent years.

The use of magazine and press commentary or reporting to highlight points in some instances greatly overstates the case being made, especially with respect to suspected non-additionality.

These points aside, the guide is a useful document that will no doubt contribute to the development and increasingly effective use of carbon markets to incentivize action on climate change.

For further information, please contact David Abbass, Public Information Officer, UNFCCC at: dabbass@unfccc.int, +49 (0) 228-815-1511.