EU Emissions Trading Should Not Be Linked With Destructive Hydro Projects

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European Parliament Urged to Safeguard Climate Policy

Greenpeace and International Rivers held a briefing today at the European Parliament on the proposed directive1 linking EU emissions trading with credits from the Kyoto Protocol project mechanisms” Joint Implementation (JI) and the Clean Development Mechanism (CDM). They warned that if rules are not set, the EU greenhouse gas emissions trading scheme will be flooded with credits from destructive hydroelectric projects, compromising the effectiveness of the scheme2 and undermining previous EU positions on sustainable development. Greenpeace and International Rivers called for the exclusion of credits from large hydroelectric projects and from any project that does not meet the recommendations of the World Commission on Dams (WCD). The Parliament is due to start debating this issue within the next two months.

Environmental groups have opposed the proposed directive in its entirety since it will reduce the pressure for domestic action. Large hydroelectric projects developed under the Clean Development Mechanism are almost always non-additional and generate large amounts of “fake” credits instead of real reductions in greenhouse gases.3

“Big dams are not an effective tool for climate protection or sustainable development”, said Patrick McCully, Campaigns Director of International Rivers. “Opening the emissions trading scheme to credits from destructive hydroelectric projects will undermine the EU climate strategy and divert investment from sustainable technologies, like new renewable energy sources and energy efficiency measures.”

The inclusion of large hydroelectric projects also represents a significant reversal on previous EU negotiating positions in the Kyoto Protocol. At the climate convention negotiations in The Hague in 2000, the EU sought to include a 10MW cap on hydroelectric projects in the CDM, a position that was ultimately defeated by other countries. Yet, there is nothing to prevent the EU from setting this cap for its own emissions trading scheme.

“The EU must convince the world that it’s not losing its grip as a global climate leader. Ideally, this proposal should be rejected in its entirety. The absence of rules for hydroelectric projects is an additional blow to the dubious environmental integrity of the proposed legislation”, said Mahi Sideridou of Greenpeace European Unit.


1. COM(2003) 403
2. The scheme, to start in 2005, creates an EU-wide market for the emission allowances that will be issued to large greenhouse gas emitters.
3. A non-additional project is one that would have happened without the CDM and thus does not result in real reductions in greenhouse gases.

More information

Safeguarding EU Emissions Trading – Setting Rules for Hydro. Briefing for the European Parliament prepared by IRN, Greenpeace and CDMWatch.