China carbon credits a boon amid market slump: Camco

BEIJING (Reuters) - China should be praised for its lead role in a U.N.-backed scheme to cut carbon emissions and efforts to cap its flow of credits should be resisted, a leading British-based clean-energy project development firm said.

China and its big state-owned firms have been accused of exploiting the United Nations' Clean Development Mechanism (CDM) to boost earnings from clean-energy projects that were already viable, thus flooding the market with cheap and dubious carbon credits.

Proposals have been made in Europe to cap the volume of offsets supplied from China.

But China is effectively being singled out for the successful way it has adapted to the CDM, Anders Brendstrup, managing director for China for Camco, told Reuters.

"They should be praised, not criticized, for this success," he said. Camco is one of the larger CDM project developers and advisers in China.

The CDM, part of the Kyoto Protocol, was set up to allow rich countries meet mandated U.N. emissions targets by investing in clean-energy projects in the developing world in return for tradable offsets called certified emission reductions (CERs).

Projects in China have produced more than 40 percent of all CERs issued under the scheme to date.

Each CER represents a ton of greenhouse gas emissions saved from being emitted and the offsets are given by the United Nations to projects provided they meet strict criteria and pass a rigorous verification process.

China has a third of the 1,593 CDM projects registered by the United Nations to date and hundreds more Chinese projects are in the CDM pipeline. Only registered projects can eventually be issued with CERs.