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The UN body that oversees carbon credit trading has suspended approval of some Chinese wind farms amid questions about how Beijing obtains money through the system.

AP/Nanet Poulsen02/12/2009 18:50
China has received millions of dollars through the Clean Development Mechanism (CDM), which allows industrialized economies to meet commitments to cut greenhouse gas emissions by paying developing countries to curb their own instead.

But environmentalists say some Chinese wind and hydropower projects improperly receive foreign money without showing they would not be built anyway, a requirement known as "additionality."

Now, the UN body that oversees carbon credit trading has suspended approval of some Chinese wind farms.

"The projects are stuck" in the Executive Board of the Clean Development Mechanism, which suspended approval in July pending a review, said Wang Shu, an official of the Cabinet’s Climate Change Department.
CDM officials raised questions after Beijing cut prices that utilities would be required to pay for wind power, said Lin Wei, general manager of Easy Carbon Consultancy Co. in Beijing, a consultant for CDM projects. Such a price cut might make projects appear to need more foreign financing by reducing their revenues.
"They thought the government believed CDM money would be coming in anyway so the government was making prices lower so that Chinese projects could have extra ‘additionality’ to get extra funding," Lin said.
However, Wang and Lin said the price cuts reflect lower costs for wind projects as technology improves.
"Of course we don’t agree" with the CDM board, Wang said. "They totally know nothing about the real situation in China’s wind power (industry)."

The CDM is expected to be a key issue at next week’s global climate conference in Copenhagen, Denmark. European governments want to change the system, due partly to its failure to slow rapid emissions growth in China, the biggest emitter of greenhouse gases.
AP did not succeed in getting a comment from the CDM office in Bonn, Germany.