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Unregulated Carbon Credit Markets Threaten Local Sustainability Projects Worldwide

Richard Graves

Bali, Indonesia - Yuyun Ismawati recently won the 2009 Goldman Environmental Prize, known as the “Green Nobel”, for her waste to wealth approach to cleaning up municipal waste in Bali, Indonesia. She developed a community based waste management system, providing employment to former rag and scrap collectors in recycling and composting efforts. She is providing jobs and income by diverting waste from municipal landfills, but the greatest threat to her project isn't local officials, but short-sighted global environmental policy.

The Clean Development Mechanism, a product of the 1997 Kyoto Protocol, is intended to fund projects in the developing world to reduce carbon emissions, offsetting the emissions of industry in the developed world. However, poor design and loopholes have plagued the Clean Development Mechanism and are threatening local sustainability projects, including BaliFokus, Ismawati's nonprofit.

Ismawati's community-based sanitation project diverts the 70% of municipal waste that is recyclable or compostable, processing it and selling it to companies or farmers. Despite this successful model, she is facing new threats from carbon credit financed projects. Ismawati that “We have many cities in Indonesia now, they have proposals from investors and buyers regarding the carbon credits, or CDM in the landfill, which will require more garbage bringing to the landfill so they can capture the methane and sell the carbon [credits] to the buyers.”

One such proposal, in Bali, the Gasification, Landfill Gas, and Anaerobic Digestion (GALFAD) project would divert community waste from her project to a landfill, intentionally increasing the production of methane, a greenhouse gas over twenty times stronger than the carbon dioxide emitted by composted waste. The landfill gas project would burn the methane to power an electrical generator, yet such projects rarely capture more than 20% of the methane and carbon dioxide mixture emitted, meaning the GALFAD project would increase greenhouse gas emissions by at least 800%, while eliminating an award-winning local environmental project providing jobs, environmental benefits, and a model to the Indonesian government.

The Global Alliance for Incinerator Alternatives, reported that “[Ismawati's] case is typicalof the CDM’s interventions in the municipal waste sector; its carbon credits have gone almost exclusively to incineration and landfill gas projects”. As all CDM projects are registered online, a quick perusal shows that the project would receive 15,784, 238 euros in carbon credits, providing almost three-quarters of the 21,306,891 euro profit from the project. The GALFAD project did not respond to requests for comment.

“Most local governments now are more interested in supporting the carbon credit projects, instead of local grassroots and people powered or people centered activities”, Ismawati told writers and bloggers in an audio interview, highlighting the contradiction between global climate policy and local environmental action.

As governments and advocates prepare for the Copenhagen climate talks in December 2009, carbon markets remain a central mechanism to combat global warming. Nevertheless, evidence is growing that without regulation and reform, carbon trading between developed and developing countries may harm local sustainability efforts worldwide.

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Richard Graves is Founder of Fired Up Media, an Associate Producer for LinkTV: EarthFocus, and a contributing editor for It's Getting Hot in Here.

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