Panama’s Barro Blanco hydroelectric CDM project was suspended by the country’s environment agency this week after it found the project had breached requirements concerning local communities.
The suspension puts pressure on the project’s investors – state-owned development banks DEG of Germany and FMO of the Netherlands – and raises questions about how well the CDM ensures its projects respect human rights.
Barro Blanco is a 29-MW hydroelectric power plant installed across the Tabasara river.
Panama’s environment agency ordered operations to stop after finding breaches including unclear agreements with affected communities, the lack of plans to protect archaeological findings and repeated failings to manage erosion, it said in a statement released Monday.
The suspension follows years of lobbying from local and international pressure groups for the Panamanian government to defend the indigenous Ngobe population, who risk being displaced if the project is completed and the area flooded.
Despite concerns, the project was registered under the CDM in 2011 to enable it to earn saleable carbon credits for emission reductions generated by providing emission free electricity.
“The suspension of the Barro Blanco project is a landmark decision that adds to the pressure of governments around the world to establish procedures, such as grievance mechanisms, that protect those most affected by climate change,” said Brussels-based environmental campaigners Carbon Market Watch in a statement published Tuesday.
The CDM was set up under the UN’s Kyoto Protocol with the twin aims of helping industrialised nations meet emission targets using its credits and to contribute to sustainable development in the poorer nations than host the projects.
But campaigners argue that local people have too little protection from project developers or host countries keen to attract foreign investment.
“I’m not happy with the current situation … I don’t sleep well at night,” said Hugh Sealy, the outgoing chair of the CDM Executive Board, in response to a question about the CDM’s provisions for sustainable development at the UNFCCC climate conference in Lima in December.
Sealy said the board had made considerable efforts in recent years but added that would ask the next chairman to “have another look at this”.
The EB is due to appoint a new chairman and members at its meeting next week in Geneva.
By Ben Garside – firstname.lastname@example.org