Piloting standardised CDM methodologies in LDCs Sarah Love, Economic Advisor Climate and Environment Department, DFID 24 March

What are standardised approaches? Benefits of standardisation Overcoming challenges DFID pilot project –Aims and objectives –Progress so far Outline 2

A means of improving the efficiency and objectivity of the CDM approval process Not a new concept – standardised elements are permitted in the CDM and form part of several meths – but are only used to a limited extent Scope for greater use of standardisation, including for additionality test The greater the use of standardisation, the greater the potential benefits but the greater the challenges What are standardised approaches? 3 Industry-wide performance standards Project specific baseline & project specific additionality test Increasingly standardised Grid emission factors Technology penetration rates Standardised additionality test

An example: performance standards What are standardised approaches? 4

Benefits of standardisation 5 Standardised approaches can help improve: Efficiency: Lower costs, complexity and uncertainty for project developers Environmental effectiveness: Consistent additionality test Equity: Improve geographical distribution by reducing costs and complexity and potentially making smaller-scale projects more attractive → Could also help build capacity for new market mechanisms

Overcoming challenges 6 Standardised approaches are not a “quick fix” There are challenges in terms of data requirements, particularly in LDCs  Likely to be greater upfront costs in meth development Need to decide on many parameters e.g. level of aggregation etc. Setting the standard at the ‘right’ level will need expert judgement => need strong regulatory oversight to maintain environmental integrity CDM decision in Cancun gives a broad range of organisations a mandate to develop standardised methodologies, prioritising underrepresented countries  Gives encouragement for those interested in testing the concept…

DFID pilot programme 7 Project team: consortium of Perspectives, Poyry, South Pole, GERES Group of expert peer reviewers to assist Steering Group Project is expected to complete in June 2011 with the submission of three methodologies to the Meth Panel Objectives: 1.to develop three new standardised CDM methodologies in sectors with high relevance to LDCs 2.To work with DNAs and local institutions to adapt/apply each methodology in three developing countries In December 2010 DFID launched a project to develop and pilot standardised methodologies for project types particularly suitable for LICs

Progress so far… …to each apply in 3 developing countries: 3 project types selected: Charcoal Water purification Rural electrification DFID pilot programme 8 Countries were selected on the basis of DNA interest in participating and project team capacity on the ground Team are presenting initial findings at DNA Meeting in Bonn (10/11th April) Draft methodologies due mid April First phase involved short-listing project types and countries The following project types were selected following discussion with Steering Group and Expert Panel: Cambodia, Zambia, Mali Zambia, Benin, Laos Cambodia, Tanzania, Benin

Questions for discussion Do you agree that greater standardisation could be of benefit to LDCs? Are you aware of others doing work in this area? Do you have ideas for next steps? 9  Systematic revision of existing methodologies?  Targeting particular project types?  Focus on more ‘challenging’ project types e.g. transport/building efficiency?