“>additionality – the most important issue for the integrity of the mechanism. (22 hydro projects have been rejected or withdrawn so far.) According to one of the authors of the report, Lambert Schneider of the Öko Institute, another major problem is that auditors are “caught in an inherent conflict of interest. They should serve as the extended arm of the EB but are paid by the project developers.” While many believe that the CDM can be improved, it will take a lot more than tweaking the rules to prevent offset fraud and storytelling.
Needless to say, the auditors are feeling the pressure. Data from UNEP Risoe showed 437 projects had their project application terminated or rejected by the auditors themselves at an early stage of development. Hydro accounted for the majority of projects that failed, with 82 projects failing to progress past the initial validation stage. Of these, 45 were in China.