CDM Project Cycle LGED Bhaban, Dhaka 8 – 9 April 2008 Presented by Khandaker Mainuddin Fellow, BCAS

Background of CDM  The objective of The United Nations Framework Convention on Climate Change (UNFCCC), entered into force in March 1994, is to stabilize greenhouse gas (GHG) concentration in the atmosphere at levels that would prevent dangerous human interference with the climate system.  To achieve this objective, all countries accept a general commitment to address climate change and adapt to its effects.  The convention divides countries into two groups: Annex-I Parties, the industrialized countries, who have historically contributed the most to climate change and non-Annex-I countries which primarily include developing countries. The convention require Annex-I countries to take lead in reducing their greenhouse gas emissions.

 To further the goals of UNFCCC, the Kyoto protocol was adopted at the third Conference of Parties (Cop- 3) held in Kyoto, Japan in1997. The Kyoto protocol sets a legal binding on Annex-I countries to reduce their GHG emissions.  There are three flexible mechanisms in Kyoto protocol through which Annex-I countries can meet their targets on emissions reductions.  CDM is one of these three flexible mechanisms. It is a mechanisms whereby an Annex-I party may purchase emissions reduction which arise from projects located and implemented in non Annex-I countries.

6 Greenhouse Gases are Covered by the Kyoto protocol  Carbon dioxide (CO 2 )  Methane (CH 4 )  Nitrous oxide (N 2 O)  Hydro-fluorocarbons (HFCs)  Perfluorocarbons (PFCs)  Sulphur hexafluoride (SF 6 )

 CDM Project Cycle Project Design and Development  Host country Approval from the concerned agencies  Validation  Registration  Project implementation and monitoring  Verification & certification  Issuance of certified emission reduction units (CERs)

Project Design and Development  Development of Project Idea Note (PIN) or project concept note (PCN) and Project Design Document (PDD)  PDD Contains  Baseline calculation (the emissions without the project)  Calculation of yearly emission reductions  Proof of additionality of the project  Monitoring plan of the emission reductions  Results of the stakeholders consultation  Environmental impact assessment

Project Additionality The key eligibility requirement for a CDM project is "additionality". Reduction in emissions must be additional to any that would occur in the absence of the certified projects activity. Emissions Baseline Monitored project emossions Time

Host government’s Approval  The Designated National Authority (DNA) of the host country approves the proposed CDM project against national sustainable development objectives.  The DNA issues a letter of approval for the proposed CDM project  In Bangladesh, the DNA consists of a two-tier structure with the Ministry of Environment and Forest being focal point.  The approval letter should include 1.the project participants voluntarily participating CDM 2.project being contributing to the country’s sustainable development.

Validation  The project design document, in particular, the baseline needs to be assessed and validated by an independent organization Known as “Designated Operational Entity” (DOE).  DOEs are registered with the Executive Board of the Clean Development Mechanism, and are responsible for ensuring compliance of the proposed project with CDM rules.  Validation checks  Meeting UNFCCC’s participation requirements  Stakeholders’ comments  Environmental impact analysis or assessment  Additionality of the GHG emissions reduction  Baseline and monitoring methodologies.

Registration  An automatic registration system from the date that the DOE submits all necessary documents and registration fee to the CDM EB and the CDM EB puts the documents on the website for public comments.  Registration by CDM Executive Board within 8 weeks (4 weeks for small scale project).

Monitoring  Monitoring and record keeping by the project developer  Actual GHG emission reductions compared to the baseline  Monitoring methodology needs to be approved by the CDM EB along with the baseline methodology prior to registration.

Verification and Certification  DOE receives the monitoring reports from the project developer  For verification DOE  Checks if the monitoring report satisfies the requirements of the registered PDD  Checks whether monitoring methodologies have been correctly applied  Can conduct on-site inspection or requests any additional information from the project developer, if necessary  Makes recommendations to the project developer for any revisions related to the monitoring methodology for the future crediting period.  Determines the actual GHG emission reductions by the CDM project activity.  DOE prepares the verification report and certification report and submit to the CDM EB.  The certification report states the verified amount of GHG emission reductions.

Issuance of CERs Issuance of Certified Emission Reductions (CERs)  DOE sends a request to issue CERs to the CDM EB.  CDM EB issues the certified amount of CERs within 15 days  Sale of CERs through a purchase contract or on the spot market

Project feasibility assessment CDM project development (PDD) Host country approval Project validation Project registration CER issuance Project Developer DNA DOE UNFCCC EB Project verification