Billionth carbon credit issued by UN offset scheme

The United Nation's issued its billionth Certified Emission Reduction (CER) carbon credit this week as part of its Clean Development Mechanism (CDM) offset scheme.

The significant landmark credit has been issued in India to a plant in the manufacturing sector which has swapped its energy source from carbon heavy fuels to biomass; a change which has seen a reduction in carbon emissions of over 17,000 tonnes a year.

The carbon trading scheme was insitituted in 1997 as part of the Kyoto Protocol. It allows independently-approved emission reduction projects in developing countries to issue carbon reduction credits that can then be sold to businesses and governments in industrialised nations.

Supporters of the mechanism argue that it provides an effective means of driving investment in developing country emission reduction efforts by richer nations, while allowing projects that would not otherwise proceed to develop a viable business case. In addition, forcing carbon intensive businesses in industrialised countries to buy CER offset credits provides them with a financial incentive to try and reduce their own emissions.

The scheme has expanded rapidly in recent years and there are now more than 4,500 CDM projects registered globally in 75 different countries, providing additional revenue streams to a huge variety of projects ranging from wind farms and energy-saving stove deployments to clean coal power stations and initiatives to reduce greenhouse gas emissions from industrial plants.

The UN is currently pushing to expand the scheme further having recently introduced new rules that should make it easier for groups of smaller emission reduction projects to gain official approval and start issuing saleable CERs. In the past, the scheme has been criticised for excluding poorer nations and projects where it is difficult to calculate emission reductions, such as initiatives to distribute efficient stoves to rural villages.