· © 2011 Perspectives GmbH Towards practical application of CDM Standardized Baselines – Perspectives experience and comments on latest regulatory decision-making Matthias Krey, Perspectives GmbH Latin American Carbon Forum, San José, Costa Rica, September 2011 Panel: CDM Standardized Baselines: latest policy developments and opportunities for application in LAC

· Analytical groundwork conducted 2 Commissioned by the UK Department for International Development (DFID) Project type Development of standardised methodology/case studies CharcoalCambodiaZambiaMali Water purificationLaosZambiaBenin Rural electrificationCambodiaTanzaniaBenin Step 1: Selection criteria Step 2: Selection Step 3: Evaluation Sector selection Identification of selection criteria for sectors Selection of sectors Evaluation of sectors shortlisted in step 2 Country selection Identification of selection criteria for countries Selection of countries (1)Criteria for evaluation of sector/country combinations (2)Evaluation of sector/country combinations 1 INCEPTION 2 DEVELOPMENT

· Various elements of standardisation are possible: -Deemed additionality, penetration rates, global benchmarks, default factors, minimum levels of service, statistical databases, omission of negligible sources of emissions, assumptions on usage patterns, aggregated default leakage, etc. Benefits… -Conservative default assumptions replace data collection, can unlock specific project types for which the determination of a baseline is cumbersome -Increased simplicity and decrease of transaction costs => greater mobilisation including small-scale Risks… -Environmental integrity -Achieving standardisation can be costly (data gathering) Development and operationalisation of standardised approaches requires resources and coordination -Selection of most appropriate project types and methodological concepts -Awareness-raising and capacity-building of project developers, NGOs and DNAs Lessons learned 3

· Guidelines (GL) SBL (EB 62): -Sector coverage: Transport is not covered -GL provides on a very high-level definitions and procedures -EB understanding of SBL seems to be limited to default factors/benchmarks -The GL does not provide methodologies, and content of GL is only a fraction of required methodological work -Practical questions are not addressed -How will the Board (or the submitting DNA?) determine and justify benchmark level and based on which criteria (transparency, conservativeness, etc)? -What about methodology elements not addressed in the GL (e.g. applicability project emissions, leakage, etc) -How do (or will) SBL relate to existing methodologies (will they simply replace BL/additionality elements of existing methodologies) -If not, who is responsible for developing the missing elements for a full practically implementable methodology? Procedures (EB 63, consideration) -Only applicable for DNA submissions and based on GL, approved meth or tool -New form for submission of SBLs -What are the criteria for assessment of adequacy of the SBL? Comments on latest regulatory decision-making 4

· © 2011 Perspectives GmbH Many Thanks for Your Attention! Matthias Krey, Perspectives GmbH