The European commission is steadfast in its belief that the Clean Development Mechanism should be tightened to make it more difficult for developing nations to earn offset credits from cutting greenhouse gas emissions.
Under current rules, rich countries can meet their own carbon emissions limits under the Kyoto protocol by investing in clean energy projects in the developing world.
Mr Peter Zapfel, a senior official at the EU's environment commission, said the CDM was in need of reform after 2012, when the first round of Kyoto expires.
Explaining his rationale, he said: "You have the CDM in one corner, which is voluntary per project with credits for everything you reduce. And then in the other corner, you have the EU carbon market, which has several sectors under one arrangement, they're all mandatorily covered and they actually have to reduce emissions and respect the cap before they can have free allowances."
Reforms should include a sectoral approach to emissions cuts, setting quotas set at variable rates based on industries, with polluters obliged to make cuts against a minimum standard before receiving free credits for further cuts.
Yvo de Boer, head of the UN's climate change secretariat, concurred that the CDM was in need of some reform but such changes must be gradual rather than revolutionary.
The CDM market was worth some $13 billion in 2007, according to the UN.
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