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Making Carbon Offsets Work in the Developing World: Lessons from the Chinese Wind Controversy

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The Clean Development Mechanism (CDM) is the leading international carbon market and a driving force for sustainable development globally. But the eruption of controversy over offsets from Chinese wind power has exposed cracks at the core of how carbon credits are verified in developing economies. It has become almost impossible to determine whether offsets from Chinese wind are "additional" and that they in fact represent "real" reductions beyond business as usual. Unless this problem can be resolved, it threatens to spread beyond wind in China and could threaten the ability of carbon markets to deliver the mitigation demanded by international climate policy.

In 2009 the CDM Executive Board (EB) shocked the carbon market by forcing an unprecedented review of whether multiple Chinese wind projects satisfied UNFCCC additionality requirements. CDM investors reeled as the safest CDM bet became the riskiest; the Chinese government publicly criticized the UN's oversight of carbon markets; and the CDM EB prepared itself for an unprecedented fight over how carbon offsets could be verified in the world's largest CDM market.

At the center of the controversy is the Chinese power tariff for wind.

When the EB observed decreases over time in power tariffs granted by China's National Development and Reform Commission (NDRC) to wind projects, it became concerned that China might be manipulating power tariffs in order to guarantee additionality and subsidize its domestic wind development with international finance. If the Chinese government were controlling additionality, then the CDM's ability to validate carbon offsets would be dealt a near‐lethal blow because the problems posed by Chinese wind extend to nearly all power sector projects in almost every developing country. If offsets cannot be credibly verified, then the integrity of emissions caps set by the Kyoto Protocol is directly threatened.

The Chinese wind controversy therefore has direct implications for the design and negotiation of any successor to the Kyoto Protocol. Despite largely failed negotiations in Copenhagen, the design of reliable, efficient carbon markets remains the world's most serious prospect for international cooperation. The developed world has committed USD 30 billion in climate aid by 2012, but the majority of these funds will likely have to be private capital delivered through markets. In order for carbon markets to avoid controversy and function effectively, the lessons from the Chinese wind controversy must be used to implement key reforms.

This report examines the application of additionality in the Chinese wind power market and draws implications for the design of effective global carbon offset policy. It demonstrates the causes of the wind power controversy, highlights underlying structural flaws in how additionality is applied in China, and charts a reform path that can strengthen the credibility of global carbon markets.

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Publication Type
Working Papers
Publication Date
Journal Publisher
Program on Energy and Sustainable Development Working Paper #90
Authors
Gang He

Economic Globalization and U.S.-Korea Relations

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Korean Studies Program at the Shorenstein Asia-Pacific Research Center is hosting an international workshop on South Korean economic affairs on March 18-19 sponsored by Koret Foundation.  Leading scholars and former senior officials from Korea and the United States will explore key aspects of economic globalization and Korea's role, from policies and politics to the economic prospects of a unified Korean. This lecture is offered as a public event on the first day of the workshop for a larger audience from the community and the Bay area.

Ambassador Han was appointed by President Lee, Myung-bak as the new Ambassador Extraordinary and Plenipotentiary to the United States of the America on January 18, 2009. He presented his Letter of Credence to President Barack Obama on May 20, 2009.

Before the appointment, Ambassador Han served as the 38th Prime Minister of the Republic of Korea after his nomination was approved by the National Assembly on April 2, 2007, and he worked in that capacity until February 2008.

Prior to serving as Prime Minister, Ambassador Han held numerous high-ranking positions in the Korean government. In 2006, he was named Chairman of the Presidential Committee on Facilitating KORUS FTA following his service as Deputy Prime Minister and Minister of Finance and Economy. Before being named Minister of Government Policy Coordination in early 2004, he worked as President of the Korea Institute for Industrial Economics and Trade.

As Korea’s Permanent Representative to the Organisation for Economic Co-operation and Development, Ambassador Han went to Paris in 2001 before returning to Seoul later that year to serve at the Blue House, first as Senior Secretary to the President for Policy and Planning and later as Senior Secretary to the President for Economic Affairs. 

Ambassador Han was the Minister for Trade at the Ministry of Foreign Affairs and Trade from 1998 to 2001. Previously, he was Assistant Minister for International Trade and Vice Minister at the Ministry of Trade, Industry and Energy. From 1993 to 1994, he served as Secretary to the President for Economic Affairs.

During his distinguished career in government, Ambassador Han has made many contributions to the development and modernization of the Korean economy.  Deregulation, market opening and strengthening of the market economy have been the three pillars of his philosophy and framework for the economic policy of Korea.

Ambassador Han earned a B.A. in economics from Seoul National University, and an M.A. and Ph.D. in economics from Harvard University.  He has been awarded two Order of Public Service and Merit Medals.

This event is supported by a generous grant from the Koret Foundation.

Bechtel Conference Center

Duk-Soo Han Korean Ambassador to the United States Keynote Speaker
Conferences
Koret Workshop

Dealing with North Korea: A Current Snapshot

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Ambassador Bosworth will share his off-the-record thoughts with us.  No quotes or cameras of any kind please.

Stephen W. Bosworth is the Dean of The Fletcher School of Law and Diplomacy at Tufts University, a position he assumed in February 2001. Prior to his appointment at The Fletcher School, he served as the United States Ambassador to the Republic of Korea from November 1997 to February 2001.

From 1995-1997, Dean Bosworth was the Executive Director of the Korean Peninsula Energy Development Organization [KEDO], an inter-governmental organization established by the United States, the Republic of Korea, and Japan to deal with North Korea. Before joining KEDO, he served seven years as President of the United States Japan Foundation, a private American grant-making institution. During that period, he co-authored several studies on public policy issues for the Carnegie Endowment and the Century Fund. He also taught International Relations as an Adjunct Professor at Columbia University's School of International and Public Affairs from 1990 to 1994. In 1993, he was the Sol Linowitz Visiting Professor at Hamilton College.

Dean Bosworth has had an extensive career in the United States Foreign Service, including service as Ambassador to Tunisia from 1979-1981 and Ambassador to the Philippines from 1984-1987. He also served in a number of senior positions in the Department of State, including Director of Policy Planning, Principal Deputy Assistant Secretary of State for Inter-American Affairs, and Deputy Assistant Secretary for Economic Affairs. He is currently serving as Special Representative for North Korea Policy.

Dean Bosworth is the recipient of several awards, including the American Academy of Diplomacy's Diplomat of the Year Award in 1987, the Department of State's Distinguished Service Award in 1976 and 1986, and the Department of Energy's Distinguished Service Award in 1979. In 2005, the Government of Japan presented him with the Order of the Rising Sun, Gold and Silver Star.

Bosworth is a former member of the Board of Directors of the Council on Foreign Relations and currently serves as a member of the Board of Directors of the Japan Society of Boston. He is also a member of the Trilateral Commission.

Bosworth is a graduate of Dartmouth College where he was a member of the Board of Trustees from 1992 to 2002 and served as Board Chair from 1996 to 2000.

Philippines Conference Room

Stephen W. Bosworth Dean of The Fletcher School of Law and Diplomacy Speaker Tufts University
Seminars

The Long Shadow of Vietnam

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Please join Marvin Kalb to discuss the impact of the Vietnam War on presidential/strategic decisions about national security issues. 

Marvin Kalb is also a contributing news analyst for National Public Radio and Fox News Channel. In addition, he is frequently called upon to comment on major issues of the day by many of the nation's other leading news organizations.

Kalb had a distinguished 30-year broadcast career, working for both CBS News and NBC News, where he served as Chief Diplomatic Correspondent, Moscow Bureau Chief, and moderator of Meet the Press. Among his many honors are two Peabody Awards, the DuPont Prize from Columbia University, the 2006 Fourth Estate Award from the National Press Club and more than a half-dozen Overseas Press Club awards. He has lectured at many universities, here and abroad. Kalb was the founding director of the Joan Shorenstein Center on the Press, Politics, and Public Policy at the Kennedy School of Government at Harvard University.

A graduate of the City College of New York, Kalb has an M.A. from Harvard and was zeroing in on his Ph.D. in Russian history when he left Cambridge in 1956 for a Moscow assignment with the State Department. The following year, he joined CBS News, the last correspondent hired by Edward R. Murrow. Kalb has authored or co-authored 10 nonfiction books and two best-selling novels. His latest book, The Media and the War on Terrorism (co-edited with Stephen Hess), was the recipient of the 2004 Arthur Rowse Award for Press Criticism. He is currently engaged in research for a book on U.S. involvement in the Vietnam War and its impact on American politics and foreign policy.

Daniel and Nancy Okimoto Conference Room

Marvin Kalb James Clark Welling Presidential Fellow at The George Washington University and Edward R. Murrow Professor Emeritus at Harvard's Kennedy School of Government Speaker
Seminars

George Foster

Littlefield 274
Stanford, California 94305-5015
Littlefield 274
Stanford, California 94305-5015

(650) 723-2821 () -
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Paul L. and Phyllis Wattis Professor of Management
Dhirubhai Ambani Faculty Fellow in Entrepreneurship for 2009-2010
Director of the Executive Program for Growing Companies
SPRIE Affiliated Faculty
foster_george.jpg PhD

George Foster's research and teaching includes entrepreneurship/early-stage companies; financial analysis, especially in commercial disputes; and sports business management. His recent research includes the role of financial and other systems in the growth and valuation of companies. He also is researching globalization challenges facing both sporting organizations and companies.

George Foster holds undergraduate and graduate degrees in economics from the University of Sydney and a doctorate from the Graduate School of Business, Stanford University. He taught at the University of Chicago and the Australian Graduate School of Management prior to joining the GSB faculty at Stanford University.

His writings include over thirty research articles and three monographs, as well as multiple editions of several textbooks. Foster's early and continuing research was on the role of financial analysis in the valuation and growth of companies. He subsequently broadened his research interests to include management control systems, entrepreneurship/venture capital, and sports business management. His textbook writings include Financial Statement Analysis; Cost Accounting: A Managerial Analysis; and The Business of Sports.

Foster has won multiple research awards including the AICPA Award for Outstanding Contribution to the Accounting Literature (twice) and the Competitive Manuscript Award of the American Accounting Association (twice). He is a winner of the Distinguished Teaching Award at Stanford Business School and has been awarded honorary doctorates from the University of Ghent (Belgium) and the University of Vaasa (Finland).

Foster is actively involved in the business community, especially with venture-capital backed startup companies and has served on the Board of Directors of multiple companies. He is also actively involved with sporting organizations around the globe, including directing executive programs for the National Basketball Players Association (NBPA) and for the National Football League (NFL).

Participatory Development in East Africa's Largest Slum: The Carolina For Kibera Story

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Carolina for Kibera (CFK) inspires and nurtures youth leaders in the slum of Kibera, Kenya through a unique model of participatory development.  CFK recognizes the youth of Kibera as resilient, wise, innovative, and eager to lift their community above the poverty and violence that plagues it.  CFK's long-term initiatives provide youth opportunities to learn and serve while addressing a wide range of community needs including healthcare, education, waste recycling and reduction, HIV/AIDS testing and counseling, and girls' empowerment.  CFK's model of participatory to fight abject poverty, and prevent ethnic, gender and religious violence has been internationally recognized, earning awards as a Time Magazine and Gates Foundation "Hero of Global Health" and the 2008 Oklahoma City National Memorial Foundation's Reflections of Hope Award.  CFK is a major affiliated entity of UNC based at the Center for Global Initiatives.


Salim Mohamed Salim Mohamed co-founded and served as the Executive Director of Carolina for Kibera for eight years. At the age of 16, he was involved in the development of MYSA - the largest youth sports program in Africa based in the Mathare slum of Nairobi.  Salim has helped launch community based sports and development programs in Ghana, Gambia, and Nigeria and presented at the International AIDS Conference. He serves as a director for Shoe 4 Africa, an advisor to Global Education Fund and a YES! facilitator.  A TED Africa Fellow, he is currently pursuing a master's degree at the University of Manchester.

Rye Barcott  While an undergraduate on an NROTC scholarship at UNC-Chapel Hill in 2001, Barcott founded CFK with the late nurse Tabitha Atieno Festo and community organizer Salim Mohamed. Barcott served five years in the Marine Corps before earning a combined MBA and MPA at Harvard as a Reynolds Social Entrepreneurship Fellow and a member of the Harvard Endowment's Advisory Committee on Shareholder Responsibility.  In 2006, he was named an ABC World News Person of the Year.  A TED Fellow and member of the UNC Chancellor's Innovation Circle, Barcott is writing a book that juxtaposes community organizing and counter-insurgency (under contract, Bloomsbury Publishing).

Oksenberg Conference Room

Rye Barcott Founder (l) Speaker Carolina for Kibera (CFK)
Salim Mohamed Co-Founder (r) Speaker Carolina for Kibera (CFK)
Conferences

Activating a North Korea policy

Authors
Robert Carlin
News Type
Commentary
Date
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Article Highlights * After a spring and summer filled with rocket and nuclear tests, relations with North Korea have calmed. * Washington should use this period of quiet to its advantage by abandoning its current hard-line strategy against Pyongyang in favor of a strategy of engagement. * Such a change will better help the United States reach its ultimate goal--a denuclearized North Korea.

It is routine in U.S. foreign policy for a pot not boiling over to be moved to the back burner. Precisely because the North Korean issue is not boiling, however, might offer an all-too-rare chance to make progress with Pyongyang. Over the past several months, the North has signaled publicly and privately that it is in engagement mode. In Washington, arguments abound about whether or not this is a stall tactic or a trick, but we'll never know if we don't move ahead with serious and sustained probing of the North's position. So long as our government sticks to an all-or-nothing approach in terms of Pyongyang, the opportunity to advance vital U.S. security interests in northeast Asia could be lost.

Underlying Washington's current position are two beliefs, so firmly held that they approach dogma. The first is that we should wait until the situation with North Korea breaks in our favor or sanctions force North Korean leadership to reassess its attachment to nuclear weapons. A year into the Obama administration, this waiting borders on self-imposed paralysis even though North Korea remains capable of badly damaging regional stability as well as U.S. nonproliferation goals. So instead of positively defining and shaping the realities on the ground, we have taken shelter behind fixed positions: enforcing U.N. Security Council sanctions and demanding that the North make progress on denuclearization at the Six-Party Talks. These may be useful parts of an overall policy, but they cannot be effective by themselves and must be handled carefully.

Sanctions will inevitably get in the way of diplomatic progress, and there needs to be a way to use their loosening--as much as their tightening--in support of negotiations. Moreover, Washington's single-minded insistence that the North return to the Six-Party Talks actually has ceded to Pyongyang a great deal of tactical initiative. There is nothing the North Koreans love more than leaping over our heads to a new position just as we think we have them cornered. As such, in mid-January, they reversed their opposition to talks in the framework of the September 2005 Six-Party joint statement and have proposed that talks proceed on all fronts simultaneously.

The second part of Washington's dogma is that there is no sense in negotiating with Pyongyang because history shows that agreements with North Korea always fail and the United States ends up snookered. But the idea that our deals with the North have all been useless is based on a flawed reading of the record, a lingering misrepresentation of the accomplishments of the 1994 U.S.-North Korea Agreed Framework. In fact, the utility of that agreement (which lasted from 1994 until 2002) is still evident. Without it, North Korea would have produced far more fissile material and a significantly larger arsenal of nuclear weapons. Two hulking, unfinished North Korean nuclear reactors testify to its lasting legacy.

Reinforcing the belief that we don't need to, or shouldn't, pursue an active policy toward North Korea is the Obama administration's apparent concern that it will be vulnerable to charges of being "weak" if it approaches Pyongyang from anything but the toughest position possible. Thus, on the grounds that the September 2005 joint statement calls for progress on the North's denuclearization before talks can begin on replacing the 1953 Korean Armistice with permanent peace arrangements, Washington rejected out of hand Pyongyang's recent proposals to move on both issues simultaneously. We may find it difficult to hold that position because it is neither what the joint statement actually says nor what some of the other parties (especially the Chinese) intended.

The fundamental U.S. goal is exactly right: We want North Korea to denuclearize and to return to the international nuclear nonproliferation regime. But stating the goal isn't the same as moving closer to it. To do so, we must accomplish things that can help stabilize the situation, make it less likely that the strategic threat from the North will get worse, and begin exploring with Pyongyang a range of ideas for reducing tensions on the Korean Peninsula and in the region. A couple of mid-term steps could include a halt in nuclear testing and long-range ballistic missile launches, along with a complete freeze of the Yongbyon nuclear center, which would involve further decommissioning and a return of international inspectors.

These interim steps won't "solve" the nuclear problem, but they aren't beyond what we can accomplish. They will do considerably more to protect our interests and those of our allies than the current all-or-nothing policy, which is going nowhere fast.

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