El Quimbo Dam – Poster Child of a Faulty CDM Project

Payal Parekh

Resistance to El Quimbo dam by the local community.
Resistance to El Quimbo dam by the local community.
Beehive Collective
International Rivers continues to submit comments to the Clean Development Mechanism (CDM) Executive Board pointing out problems with proposed hydropower CDM projects. Most recently, I  prepared comments on the El Quimbo Project on the Magdalena River in Colombia. This megadam, 400 MW at full capacity, is neither additional nor does it promote sustainable development.

Additionality is the flawed concept upon which the CDM is based – a project must prove that it would not be built without the additional funding made available through the sale of carbon credits. A project developer can make three type of arguments: the project's financial profitability is too low, it faces almost insurmountable barriers, and the project type is not common for the region.

The El Quimbo project makes all three arguments. Yet upon closer inspection, none of them stick. To show that the profitability of a project is low, there are many numbers that can be fudged, such as what the price of energy will be in ten years from now. The project application lists barriers such as mudslides and earthquakes. Extra financing cannot make seismic risk disappear. If the seismic risk is especially high, it would be prudent not to build the dam. The last argument that hydro is not a common project type in Colombia is laughable, considering that the country draws two-thirds of its power from hydropower.

To add insult to injury, over 350 families will be displaced. The project has faced intense resistance and the local inhabitants were forced to leave their homes. Unfortunately, the CDM provides no guidelines for assessing whether a project is sustainable or not. The host country gets to decide. As developing countries are hungry for foreign direct investment, they have no incentive to evaluate projects strictly for fulfilling sustainability criteria.

Unfortunately, El Quimbo is not an exception, but rather the rule. In fact, analysis by International Rivers shows that, as of March 2010, 80% of all CDM projects were already built when they were registered under the CDM. Clearly these projects were not dependent on the sale of carbon credits.

There is some hope, though. This past week, the Executive Board of the CDM suspended the issuance of credits from projects that destroy waste gases from the production of a refrigerant gas, due to concerns highlighted by the NGO CDMWatch that chemical companies were increasing their production of the refrigerant (itself a greenhouse gas) purely to gain the lucrative income from selling the carbon credits earned from destroying the waste gases.

The Executive Board is clearly taking note of public concerns and willing to clean up the worst abuses of the CDM. Hydro projects are one other area that badly needs the Executive Board to crack down on dishonest project developers. In the next two weeks, International Rivers will be at the UN Climate Change Conference in Cancun , working relentlessly to get CDM Executive Board members to do the right thing when it comes to hydro as well – NO CARBON CREDITS FOR DESTRUCTIVE HYDRO PROJECTS!