1. UNIDO Industrial Energy Efficiency and Climate Change UNIDO Activities in the context of the inter-agency project on capacity building for CDM New Delhi, 25 October 2002

2. Overview  Project Objectives Capacity building through the learning-by doing approach  Project Partners UNFCCC, UNDP, UNCTAD, UNIDO and WBCSD  Project Activities – the UNIDO Component - guidelines for baseline assessment - Promotion of CDM projects for ERs buyers

3. The UNIDO component activities (www.unido.org) The UNIDO component activities (www.unido.org) Engaging the private sector in CDM project activities  Preparatory activities - Preparatory tour - Workshop for key stakeholders  Capacity building for project analysis - Technical training seminars - Practical "learning-by-doing” project identification & formulation

4. The UNIDO component (cont’d)  Assessment of CDM project portfolio - Selection of viable opportunities (financial and economic analysis) - Assessment of baselines and additionality Development of decision support tools - Preparation of guidelines to support decision making on baselines  CDM investment promotion - Placement of a delegate with a ITPN - Development of promotion mechanisms - Broad promotion activities through ITPN - Review promotion mechanisms

5. The relevance of project activities to the CDM Project Cycle Project identification and project document Baseline Study Promotion of projects to buyers of emissions reductions Implementation MVP Validation Negotiation of CER purchase Implementation MV & transfer

6. Project history  First guidance document  Case-studies in Brazil to validate approach – Landfills, sustainable biomass use in the coke and steel industries, sugarcane bagasse utilization  Interaction with ERUPT guidelines – UNIDO guidelines influenced ERUPT program design criteria which were used for a number of projects  Interaction with the WRI/WBCSD corporate accounting & project-based accounting modules – Guidance document was reviewed and influenced design of project-specific baseline method design in project-based accounting module

7. Overview of the concept and the work progress  Concept – The relationship between corporate accounting of emissions and the accounting of project- based emission reductions – Attributing changes of emissions to emission accounting factors – Correlation of emission accounting factors to project typology – Definition of boundaries – Baseline methods

8. Key elements of UNIDO’s approach  Corporate accounting = static snapshots of source- specific emission inventories (= balance sheet in financial accounting)  Project-based accounting = explaining year-to-year changes of static snapshots of source-specific emission inventories (= profit and loss statement in financial accounting) PeriodCalculation of emissions 2001 inventory E 01 = Q 01  ((p 1  ef 1 ) + s 1  (p 2  ef 2 )) Intervention  e = (  p 1   ef 1 ) +  s 1  (p 2  ef 2 ) 2002 inventory E 02 = Q 02  ((p 1  ef 1 ) + s 1  (p 2  ef 2 )) Scope 1 Scope 2&3

9. Project interventions & project based accounting  Year-to-year specific emission changes are expressed as:  e = (  p 1   ef 1 ) +  s 1  (p 2  ef 2 )  Whereby a project intervention alters p 1, ef 1 and/or s 1 – Scope 1 change: carbon efficiency – Scope 2 change: activity level change  p 2 and ef 2 are outside the control of the project intervention  Case studies show a strong correlation between project type & the factor that is changed as result of a project intervention

10. CDM Investor Guide for Brazil  Prepared in cooperation with UFRJ;  Provides comprehensive information on institutional infrastructure, priority sectors in the energy and industry sector and on current projects (on-going and under development);  A comprehensive source of information for project developers, policy makers and investors.

11. Next Steps  Programming of the methodological guidelines;  Workshop on the CDM Investor Guide in cooperation with UNCTAD;  Technical workshop for South Africa;  Placement of project developers with a UNIDO ITPO office.