Xiaoxi and Xiaogushan CDM Hydropower Projects: Report from a Field Trip

Thursday, November 27, 2008

EU legislation known as the Linking Directive states that CDM credits from hydropower projects larger than 20MW can only be used in the European Emissions Trading System (ETS) if the projects comply with the recommendations of the World Commission on Dams (WCD).

The German government has taken the lead on establishing a process for assessing WCD compliance of CDM hydropower projects. The government requires German companies that intend to buy CDM large hydro credits for use in the ETS to commission a third party to assess WCD compliance.

German power utility RWE, one of the biggest CO2 emitters in Europe, intends to buy CDM credits from numerous large hydro projects in China, including the Xiaoxi Dam in Hunan province and the Xiaogushan Dam in Gansu. RWE commissioned certification company TÜV SÜD to write WCD compliance reports for the Xiaoxi and Xiaogushan dams. TÜV SÜD ruled both projects WCD compliant.

International Rivers carried out a desk review of the Xiaoxi compliance report in June 2008 and concluded that "the report is of very low quality and does not provide a basis for the German government to accept the project as WCD compatible."

More recently International Rivers commissioned Chinese-speaking researcher Tina Lea to visit the Xiaoxi and Xiaogushan dams to gather on-the-ground information on the dams. Tina's report can be downloaded below. (The name is a pseudonym to protect local people who facilitated the field trip).

Tina's findings strongly contradict TÜV SÜD's assertion that Xiaoxi is WCD compliant. The findings include forced evictions, a failure to restore pre-eviction incomes, arbitrary compensation amounts, a lack of legal recourse for those who have suffered losses, and a non-independent EIA process.

At Xiaogushan the consultant found no evidence of significant social or environmental impacts.

Tina concludes that neither dam likely required CDM income to be completed and so neither should be eligible for the CDM. Xiaogushan Dam was “registered” (approved) by the CDM Executive Board in 2006. Xiaoxi is in the process of applying for registration.

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