Designated Operational Entities

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Designated Operational Entities (DOEs) are companies who assess and certify claims to Certified Emissions Reductions (CERs) (i.e carbon credits) generated by initiatives under the Clean Development Mechanism (CDM). CERs are generated when carbon emissions are deemed to have been avoided, and then traded with companies who have exceeded their allowance of emissions under the Kyoto protocol. The idea of the CDM is that we should cut emissions where it is cheapest first. I.e: its easier for industrialised countries to pay for industry in the developing world to cut emissions, than to cut their own carbon footprint.[1]

Three companies entirely dominate the certification process and all of them have been heavily critiqued for failing to demonstrate that the projects they certify wouldn't have happened anyway without the extra finance (ie the carbon savings were not 'additional'), rendering the scheme ineffective in these cases.

History

DOEs

The full list of DOE's as of March 2010 is below, though the market is dominated by the three companies:

  • TÜV SÜD, suspended in March 2010 for approving projects with serious doubts over their additionality. [2]
  • Det Norske Veritas
  • SGS UK, suspended in September 2009 for inadequately vetting projects. [3]


Other DOE's:

Critique

The International Rivers' 2008 publication 'Bad Deal for the Planet: Why carbon offsets aren't working and how to create a fair global climate accord' gives a good synopsis of critiques on the ineffectiveness of DOEs in evaluating emissions cutting projects. Some of the main issues raised are:

  • That the concept of 'additionality' is intrinsically flawed and impossible to prove and DOE's are rewarding 'good storytellers over good projects'.
  • That the volatile nature of CER markets and the uncertain certification process means that DOEs often only recommend that companies claim CERs for existing projects (not projects that really require the funding to go forward) and let them make up additionality stories later. This has resulted in some projects being awarded CERs for projects launched and even completed many years before.
  • That validators are chosen and paid by the project developers requiring certification, who will select for cheap cost and likelihood of being certified. The authors suggest validators should be appointed by the UNFCCC instead.[5]

Resources

Notes

  1. Lori Pottinger (2008) 'Bad Deal for the Planet: Why carbon offsets aren't working and how to create a fair global climate accord'. Dams, Rivers and People Report 2008, International Rivers, Berkeley, CA
  2. UNFCCC, 'TUV SUD suspended from CDM accreditation work for now' carbon yatra website, News, Accessed 31/03/10
  3. Danny Fortson, Georgia Warren Carbon-trading market hit as UN suspends clean-energy auditor The Sunday Times, September 13, 2009. Accessed 31/03/10
  4. UNFCCC List of DOEs Accessed 31/03/10
  5. Lori Pottinger (2008) 'Bad Deal for the Planet: Why carbon offsets aren't working and how to create a fair global climate accord'. Dams, Rivers and People Report 2008, International Rivers, Berkeley, CA