In its last Executive Board meeting held towards the end of last month, the UNFCCC Panel suspended one of the largest designated operational entity – Norway's DNV - for non-conformities. This was an interesting development. While the Clean Development Mechanism (CDM) has been criticized by some independent experts including the leading non-governmental environmental organization, the World Wide Fund For Nature (WWF), the suspension of DNV was unexpected.
The suspension is seen as a sign of the EB getting stricter and more willing to take on reforms in response to the criticism directed at the CDM. Project developers though have been adversely affected by this decision. The EB has disallowed DNV from submitting any new registration or issuance requests. This will hurt project developers who have projects currently in verification and issuance stages with DNV. Project developers will now have to start the process again with another DOE, which is not only time-consuming but also very expensive. Project developers have already been reeling under the delays in the UN CDM certification process and the sudden suspension of one of the largest DOEs is going to further upset the purveyors of carbon credits.
DNV has validated close to half of the projects registered by the UN. The CDM pipeline shows that projects verified by DNV had an average issuance success of 81% and in 2008, of the 342 projects registered by the UN, 136 were validated by DNV. In India 30% of the projects at validation stage have been validated by DNV.
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