The architects of a new global climate change deal should not lose sight of the achievements already made, despite calls for wholesale reform, a senior executive with Italian power giant Enel said on Saturday.
The clean development mechanism (CDM), set up under the Kyoto Protocol, enables rich countries to meet their carbon reduction targets by investing in clean energy projects in the developing world, which are granted tradable "certified emission reductions" (CERs) by the United Nations.
Opponents call for far-reaching changes, saying the current mechanism has been hijacked by commercial interests and is not delivering the promised carbon emission cuts, but Giuseppe Diodati, Enel's head of carbon strategy, told Reuters in Beijing that there was no reason for it to be ditched. "There are good points to defend about the CDM market and a lot of good points to be saved," he said.
The Kyoto Protocol will expire at the end of 2012, and negotiators need to thrash out a replacement by the time they meet in Copenhagen at the end of this year. Enel has been "an early mover" in China's CDM sector as it tries to meet its own mandatory C02 reduction targets, Diodati said.
As well as developing energy efficiency projects, the company's focus in China has also been on hydropower and reducing industrial gases like HFC-23. China has been a crucial part of Enel's strategy to "minimise (Kyoto) compliance costs", he said. And that has been the problem with the CDM, critics say. The current regime allows western countries to meet their targets on the cheap, and the financing available through carbon trading could be better employed elsewhere.