Kyoto carbon projects mostly sound-UN official

LONDON, June 19 (Reuters) Unscrupulous projects falsely claiming to cut greenhouse gas emissions under the Kyoto Protocol on global warming are isolated incidents, if they exist at all, the UN's climate change chief said today.

Under Kyoto rich countries can meet greenhouse gas reduction targets by paying poor countries to make cuts for them, in a trade in carbon offsets worth billion last year.

Yvo de Boer heads the UN body, which administers the scheme, and fended off recent allegations of fraudulent claims.

Unscrupulous behaviour was to be expected in the early stages of a brand new market, he told Reuters.

''We're in a very new area, so it's logical we don't get it right 100 per cent right first time,'' he said on the sidelines of an energy conference in London hosted by the Financial Times.

''(We're) not at the moment re-considering projects, which have been approved.'' The environmental group WWF last week said it was ''concerned'' that the UN process wasn't stopping projects from fraudulently cashing in on the new trade, by submitting claims for emissions-cutting activities that they were planning anyway.

''We have a very rigorous process to allow NGOs to react to a project proposal,'' said de Boer.

Britain has a strong interest in seeing carbon trade work under Kyoto's so-called Clean Development Mechanism (CDM), not least because London financial institutions cornered half the market last year.

''There are some very good projects and some, which have received a lot of flak,'' British Environment Minister David Miliband told Reuters.

''CDM will have an important role. There's a perpetual process.'' WWF was particularly concerned about a project in Equatorial Guinea, which is still awaiting UN approval, after getting the thumbs up from Britain. That first step was needed because the carbon credit buyer is based in Britain.

''Our key concern is that construction of the plant started in 1998,'' said WWF's Keith Allott. ''We've got serious concerns about why Britain approved this project.'' The project involves making methanol from natural gas, and according to WWF it fails a key Kyoto principle called ''additionality,'' which says carbon credits can only be claimed if it shown that the emissions cuts wouldn't have happened without the Kyoto Protocol.

The fact construction started so long ago showed the project was profitable without Kyoto and already under way, Allott said.

''The UK doesn't check CDM projects for additionality,'' said consultant and academic Axel Michaelowa. ''There's pressure from carbon businesses based in London to make a buck.'' Britain's environment ministry wasn't immediately available for comment.

REUTERS PY BST0026