Draft Copenhagen text hints at relaxation of offset rules

In a development that looks set to infuriate environmental groups and excite the carbon market in equal measure, draft proposals from the Copenhagen summit emerged earlier today, which if adopted would effectively relax the rules governing UN-approved carbon offset projects.

The draft document, which has been obtained by news agency Reuters, proposes reforms to the UN's Clean Development Mechanism (CDM) carbon-offsetting scheme that would effectively streamline the approval processes for new emission reduction projects.

Ahead of the talks, the International Emissions Trading Association released a major report warning that the $6.5bn (£4bn) a year CDM market was being undermined by onerous and time-consuming accreditation processes that stopped many legitimate projects from qualifying for the scheme and selling certified emission reduction carbon credits.

Much of its criticism centred on so-called additionality checks which aim to ensure that emission reductions are additional and would only be delivered if the project is allowed to issue carbon credits.

The draft text appeared to accept that the additionality checks had become too onerous, proposing "a positive list of sectors for which conservative criteria could be used to assess additionality, initially for small-scale projects in renewable energy and energy efficiency, as an alternative to using the (present) additionality tool".

It also proposed the "consideration and development of baseline and monitoring methodologies that are applicable to certain sectors", which could be interpreted as an attempt to streamline approval processes by establishing standard processes for a wider range of projects.

Relaxation of the CDM is regarded by many of the countries involved in the negotiations as one of the most effective ways of accelerating the transfer of clean technology funding from rich nations to developing countries.

However, the scheme has been widely criticised by green groups which already regard it as too lax and have consistently argued that it is providing funding to projects that would have gone ahead regardless of extra funding and carbon-intensive infrastructure and energy projects such as "clean coal" technologies.