Clean Development Mechanism Principles

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Clean Development MechanismPrinciples

• Joslin Andrews

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Kyoto Protocol

• GHGs defined as carbon dioxide, methane, nitrous
  oxide, HFCs, PFCs and SF6
• Annex 1 Parties means those listed in Annex 1 of
  the UNFCCC. They are developed countries incl
  economies in transition
• Annex 1 Parties have different GHG emission
  ceilings for the 1st commitment period
• The base year emissions are the aggregate GHG
  emissions in 1990

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3 Market Mechanisms

• Annex 1 countries can achieve their emission
  reductions cost effectively by using the Kyoto
  Mechanism
• Besides Parties, private firms may use the Kyoto
  Mechnisms
• Provided the Party meet eligibility requirements

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The Clean Development Mechanism
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International Emissions Trading

• Trading of , including part of
• Assigned amounts
• CERs
• ERUs
• tCER and lCER
• Increasingly non Kyoto units eg VERs
• Minimum trading unit 1ton CO2 equivalent
• Decreasing the cost of compliance

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CDM project cycle

• Available from www.unfccc.int
• Detail on procedure and templates
• Updates list of
• Designated National Authorities
• Designated Operational Entities

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CDM project cycle part 2

• Project participant to
• Collect and archive all relevant data necessary
  for calculating GHG emissions
• In accordance with the monitoring plan written in
  the PDD
• Decide exclusively on distribution of CERs
• 2 of issued CERs deducted for adaptation fund

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CDM cycles
Vintage credits
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CDM related bodies

• Conference of parties serving as the meeting of
  the parties to the Kyoto Protocol (COP/MOP)
• Authority over and provide guidance to CDM
• Designated National Authority (DNA)
• Host country approval of project
• CDM Executive Board (EB)

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CDM Executive Board (1)

• Make recommendations to the COP/MOP on further
  modalities and procedures for the CDM and/or any
  amendments or additions to rules of procedure for
  the EB, as appropriate
• Approve new methodologies related to, inter alia,
  baselines, monitoring plans and project
  boundaries
• Review provisions with regard to simplified
  modalities, procedures and the definitions of
  small scale CDM (SSC) project activities, and if
  necessary, makes appropriate recommendations to
  the COP/MOP
• Be responsible for the accreditation of
  operational entities (OEs), and make
  recommendations to the COP/MOP for the
  designation of OEs.

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CDM Executive Board (2)

• Make any technical reports to the public and
  provide a period of at least 8 weeks for public
  comments on draft methodologies and guidance
• Develop and maintain the CDM registry
• Formally accept a validated project as a CDM
  project activity (registration)
• Instruct to issue CERs for a CDM project activity
  to the CDM registry administrator

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Panels and working group

• Methodologies Panel (Meth Panel)
• Working group for small scale CDM project
  activities (SSC WG)
• Working group on afforestation and reforestation
  project activities (AR WG)
• Registration and Issuance Team (EB-RIT)
• CDM accreditation panel (CDM-AP)

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Designated Operational Entities

• Applicant Entity status
• Either domestic legal entity or international
  organization accredited and designated
• Two functions
• Validates and requests registration of proposed
  CDM project activity
• Verifies emission reductions and requests
  issuance of CERs

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Project Participant (PP)

• Participation in a CDM project activity is
  voluntary
• A PP is either
• A Party involved (if indicated as such in the
  PDD)
• A private or public entity
• Each PP need authorization
• Change of PP must be communicated to the EB
• In accordance with modalities of communication

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Confidential/proprietary info

• Information obtained from PPs marked as
  proprietary or confidential shall not be
  disclosed without the written consent of the
  provider of the information, except as required
  by national law.
• Information used to determine additionality, to
  describe the baseline methodology and its
  application, and to support an environmental
  impact assessment shall not be considered as
  proprietary or confidential.
• PPs shall submit documentation that contains
  confidential and proprietary information in one
  marked up version where all confidential/proprieta
  ry parts shall be made illegible by the PPs, and
  a second version containing all information which
  shall be treated as strictly confidential by all
  handling this documentation

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Conditions of a CDM project

• to assist non-Annex I Parties in achieving
  sustainable development and in contributing to
  the ultimate objective of the Convention, and to
  assist Annex I Parties in achieving compliance
  with their commitments. KP Art.12 para2
• It is the host Partys prerogative to confirm
  whether a CDM project activity assists it in
  achieving sustainable development.

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Five other CDM principles

• A CDM project activity is additional if GHG
  emissions are reduced below those that would have
  occurred in the absence of the registered CDM
  project activity
• Annex I Parties are to refrain from using CERs
  generated from nuclear facilities to meet their
  quantified GHG emissions reduction targets
• The eligibility of land use, land-use change and
  forestry project activities under the CDM is
  limited to afforestation and reforestation (A/R)
  
• Public funding for CDM projects from Annex I
  Parties is not to result in the diversion of
  official development assistance (ODA) and is to
  be separate from and not counted towards the
  financial obligations of Annex I Parties.
• It is necessary to prepare a project design
  document (PDD) in order to be registered as a CDM
  project activity

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Project registration
Designated National Authority (DNA)
Designated Operational Entity (DOE)
CDM Executive Board (CDM EB)
Project Start
Project Idea Note (PIN)
Submit for Letter of No Objection
Submit for Validation
Project Design Document (PDD) based on approved
methodologies
Submit for Host Country Approval
Project validated
Host Country Approval
Submit for EB registration
Posted for review
Project registered
Project Implementation
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Identifying a project type
Is the GHG emission reduction project activity
eligible for CDM?
Yes
Is it eligible for small-scale CDM project
activity?
Yes
No
Project Design Document (CDM-PDD)
PDD for small-scale project activities
(CDM-SSC-PDD)
Choose an appropriate form
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Determining a baseline and monitoring methodology
Is there an approved methodology (AM) applicable
to the project activity?
No
Yes
Request for clarifications to an AM
Request for deviation
Request for revision
Submission of a proposed new methodology
Approval
Approval
Answers
Approval
Write CDM-PDD by applying an AM
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Small Scale CDM project

• Simplified modalities and procedures are
  applicable
• 3 types
• Renewable energy
• Energy efficiency improvement
• Other project activities

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Type I projects

• Renewable energy projects shall have a maximum
  output capacity of 15MW
• Maximum output is defined as installed/rated
  capacity, disregarding the actual load factor

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Type II projects

• Improvement of energy efficiency, on supply or
  demand side, limited to a maximum output of 60GWh
  per year
• Eg saving of 4000hr of a 15MW plant

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Type III project activities

• Limited to an emission reduction of less than or
  equal to 60kt CO2 equivalent annually

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Methodological tools

• Tool for the demonstration and assessment of
  additionality
• Tool to determine methane emissions avoided from
  dumping waste at a solid waste disposal site
• Tool to calculate the emission factor for an
  electricity system
• Tool to determine project emissions from flaring
  gases containing methane

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CDM project criteria

• Host party criteria
• Set by the DNA
• UNFCCC criteria
• Voluntary participation
• Project Design Document
• Baseline Methodology and Additionality
• Sustainable Development
• Assessment of Environmental Impact
• Monitoring methodology and Plan
• Stakeholder Comments

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Questions
Joslin Andrews joslin_at_promethium.co.za www.prometh
ium.co.za