Xiaoxi Dam, China

Xiaoxi Dam, Hunan Province, China
Xiaoxi Dam, Hunan Province, China
Tina Lea
This large dam epitomizes the abuse of carbon offsets and the many flaws in the Kyoto Protocol's offsetting scheme, the Clean Development Mechanism (CDM). In this case, the dam has evicted from their homes poor farmers in Hunan Province, China, while allowing Germany to burn more coal and still meet its Kyoto commitments.

The German power utility RWE, one of the biggest CO2 emitters in Europe, intends to buy CDM credits (or offsets) from the now infamous Xiaoxi Dam on the Zishui River so that it can continue to expand its coal-fired electricity generation. In addition to generating offsets that don't lead to any real emissions reductions (because the dam has been built regardless of whether it receives CDM approval), Xiaoxi is beset with resettlement abuses, and fails to meet the basic standards of the World Commission on Dams as required by European law.

Under EU and German law, hydropower projects above 20 megawatts seeking to sell carbon credits in the EU Emissions Trading Scheme, in which RWE is participating, must comply with WCD recommendations. RWE commissioned the certification company, TÜV SÜD, to write a WCD compliance report for the Xiaoxi project. TÜV SÜD concluded that Xiaoxi is WCD-compliant despite clear evidence to the contrary.

A field report commissioned by International Rivers strongly contradicts TÜV SÜD's assertions. Our researcher documented problems including the forced eviction of 7,500 people, a failure to restore pre-eviction incomes, arbitrary and inadequate compensation for resettlers, a lack of legal recourse for those who suffered losses, and a non-independent EIA process marred by an obvious conflict of interest. As one displaced villager describes it, "Nobody asked if we wanted to move... The government just posted a notice that said, 'Your home will be demolished.'"

The international media is beginning to report on this record of bad carbon credits and WCD violations from hydro projects in China. Most recently, the Washington Post, the International Herald Tribune, the Huffington Post and Germany's Focus Online were among the many outlets that carried an Associated Press story that substantiates our criticism of this dam's phony offsets. Swedish Radio even reported that TÜV SÜD was  traveling with a police escort when doing their assessments of the Tongwan CDM hydropower project in China.

International Rivers is closely monitoring the Xiaoxi Dam, as it awaits approval by the CDM Executive Board. For more immediate coverage of the Xiaoxi investigation, visit our blog.