Transcript Slide 1

Global mechanisms:
The CDM
Prof. Peter Newell
[email protected]
What is it?
• Project based market mechanism
• Offsetting mechanism: Allows countries with
emissions obligations to fund emissions
reductions where it is cheapest to do so and
claim these savings against their targets
• One of the flexible mechanisms in the Kyoto
Protocol (CDM, JI, ET)
What the Kyoto Protocol says
Article 12 of Kyoto Protocol:
‘the purpose of the clean development
mechanism shall be to assist Parties not
included in Annex 1 in achieving sustainable
development and in contributing to the
ultimate objective of the Convention and to
assist Parties included in Annex 1 in achieving
compliance with their quantified emission
limitation and reduction commitments’.
CDM Project Cycle
Phase
Project Design
Documentation
PDD
Validation Report
Validation
Letter of Approval
Key Players
Project Developers, Funds,
Investors, NGOs
Executive Board for new
methodologies
DOE
DNA
Registration
Executive Board
Proper Documentation
Project Participants
Monitoring
Verification Report
Verification
DOE
Certification
Executive Board
Issuance of CERs
CERs
Executive Board, CDM Registry
Administrator
Project Participants
Adaptation Tax
Administrative Tax
Baseline scenario of a CDM project
activity
The CDM in numbers
• 4200 in pipeline
• 2279 registered
• 81% - vast majority of projects are registered
without incident
• One fifth require additional scrutiny: generally
minor changes to project documentation
• 67% of all reasons given by EB for triggering a
review were related to additionality
Projects by host party
Projects by region
By investor
Projects by type
Key trends
• Dominance of China & India
• Sub-Saharan Africa not been successful to
date
• 70% of CERs in 1st 1.5 years were issued for
abating gases other than CO2
• Growing balance in scale and type of project
Some issues
• Proving additionality- always counter-factual.
• Bureaucratic bottlenecks & time-lagsprojects, methodologies, getting the CERs
• Uncertainty over future of the climate regime
post 2012: source of demand?
• Valuing sustainable development benefits
• Capacity of DNAs and DoEs
Future challenges
• Which technologies in and out: CCS? Nuclear?
Forests?
• Scaling up: more programmatic? Sectoral?
• Regional quotas?
• Common SD criteria?
• Changes in governance of CDM: Full-time
professionalised EB; redress mechanisms;
permanent DoEs
Thank you!
For more information
www.clean-development.com