Clean Development Mechanism The Dutch Approach Reginald Hernaus Ministry of Housing, Spatial Planning and the Environment

2 Objective of the presentation (1) Provide insight into: -The “over all” Dutch climate change policy -The international legal framework: UN FCCC and the Kyoto Protocol - Clean Development Mechanism - The Dutch CDM Purchase Programme

3 Objective of the presentation (2) -The role of “VROM” and the host countries - Memoranda of Understanding -Letters of Approval -Declarations of Approval -Impact of the Dutch CDM Programme on Central and Latin America -Challenges

4 The “over all” Dutch Climate Change policy - Full commitment vis-a-vis UN FCCC and the Kyoto Protocol -Reduction target for the emissions of greenhouse gases: -6% ( ) -200 Million Tonne of CO2 equivalent -”50% domestically and 50% internationally”

5 The international legal framework -UN Framework Convention on Climate Change (UN FCCC, 1992) -Kyoto Protocol (1997) -Bonn Agreement (2001) -Marrakech Accords and Executive Board (2001) -COP-9: afforestation and reforestation (2003)

6 Clean Development Mechanism -Triple objective of Article 12 of the Kyoto Protocol: 1)Achieving sustainable development 2)Contributing to the ultimate objective of the UN FCCC 3)Achieving compliance with reduction commitments

7 The Dutch CDM Purchase Programme -Multi-track approach: -Carboncredits.nl (CERUPT) -International Multilateral Financial Institutions (IFC, IBRD and CAF) -Private Financial Institutions (Rabobank International) -Bilateral CER Purchase Agreements (BCPAs) with host countries (under consideration)

8 The role of “VROM” and the host countries (1) -Participation requirements under UN FCCC and Kyoto protocol -”Participation in a CDM project activity is voluntarily” (this implies: on an equal basis) -CDM project cycle stipulates the involvement of the Governments (LoA, DoA)

9 The role of “VROM” and the host countries (2) - Pro-active: “VROM” may facilitate the submissions of LoAs by means of bilateral talks or a MoU! Features of a MoU: -Intension for a long standing cooperation -Not legally binding -A quantified insight into the potential for CDM cooperation with VROM -Support underlying activities, willingness to purchase CERs, if projects qualify

10 The role of “VROM”and the host countries (3) - MoU: No prerequisite for CDM cooperation! -Results so far: -Panama, Costa Rica, Colombia, El an Salvador, Guatemala, Uruguay, Nicaragua and Bolivia Amount of Mton CO2 eq vary per MoU: Mton

11 Impact of the Dutch CDM Programme on Central and Latin America -CCAD/Prosiga workshop: “How to develop CDM projects in Central America?” San Salvador, El Salvador, March 27-28, CDM Project activities: - CERUPT: “pending”: Panama (3), Costa Rica (3), El Salvador (1), Bolivia (1), Brazil (2), Jamaica (1): CERUPT: 11 out of 18! -IBRD, IFC: pending: Brazil,Belize,Chile Colombia,Guyana,Peru -CAF: pending: Bolivia,Colombia,Nicaragua

12 Challenges (1) -Entry into force of the Kyoto protocol! -“Stirr up” the carbon market! -Need to “promote equitable geographic distribution at regional and subregional level”!: -C(osta Rica) or C(hina) Development Mechanism? -C(ameroon) Development Mechanism?

13 Challenges (2) -New Dutch Government underway! (Impact for the Dutch CDM Purchase Programme?) -Executive Board Ruling available and in development! -The baseline methodolog(y)(ies), as applied under CERUPT, accepted by the Executive Board will be key!!

14 Challenges (3) - ”It takes two to tango” -A need for institutional CDM capacity in host countries -Identification of the (interim) Designated National Authority (DNA) for the CDM -Role of the host countries acquired in order to keep the CDM “clean”

15 CDM a living issue! For the latest developments: WWW: CDMINFO.NL For any remarks and/or questions: