1. Climate Change and the Clean Development Mechanism
Introduction to
Climate Change and the Clean Development Mechanism
Training Workshop: Project Formulation for the Clean Development Mechanism
Hanoi, Vietnam
September 30 – October 2

2. Important Dates in the History of Climate Change
1988: Toronto Conference – climate change on policy agenda
1990: First International Scientific Assessment
1992: Signature of the UNFCCC
1994: UNFCCC comes into force
1997: Kyoto Protocol (CoP 3)
2001: Third International Scientific Assessment
2001: Marrakech Accords (CoP 7) – rules of implementation of Kyoto Protocol adopted

3. IPPC Third Assessment Report (2001)
The Earth’s climate is warming and human activities are primarily responsible
Most socio-economic sectors, ecological systems and human health will be adversely affected by climate change, with developing countries being the most vulnerable
Technologies are available to reduce greenhouse gas emissions but policies and measures are needed to realize the technological potential

4. United Nations Framework Convention on Climate Change (UNFCCC)
Ultimate objective of stabilizing global greenhouse gas concentrations in the atmosphere
Developed countries aim to restore GHG emissions to 1990 levels
Support capacity building in, and facilitate technology transfer to developing countries to mitigate, and to adapt to climate change
Meet as a “Conference of Parties” in the future, consider progress
Pre-industrial levels at 260 ppm
Current: 360 ppm
If we are to stabilize at 450 ppm, concentrations would have to peak in 2010
If we are to stabilize at 550 ppm, concentrations would have to peak in 2025?
In the 1980s the world’s scientists sounded the alarm that the quantity of greenhouse gases emitted to the atmosphere could potentially affect the Earth’ climate.
In response, countries signed at Earth Summit at Rio (1992) the UNFCCC
came into force in March parties
Objective has to be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure food production is not threatened, and to enable economic development to proceed in a sustainable manner
Developed Countries:
Design and implement plans to reduce greenhouse gases and/or enhance carbon sinks
OECD to provide financial resources to assist developing countries in submitting national communication (inventory and national climate policy) and conduct vulnerability assessment

5. Contributions to Global Warming

6. The Kyoto Protocol 39 Developed Countries and Economies in Transition
agreed to reduce greenhouse gases by 5.2 % below 1990 levels in the commitment period
Reduction of greenhouse gases by 5.2 % below 1990 levels in the commitment period (~ Mt CO2, including US)
Status: Not yet in force
Marrakech Accord: Final decision text agreed in Nov 2001
Coming into force: requires ratification of 55 Parties to UNFCCC representing 55 % of CO2 emissions (US constitutes 36 %)
Developed Countries/ EITs now considering ratification (except the US)
As of October 2001, Kyoto Protocol has 84 signatures and 43 ratifications
Of the developed countries with quantified emission limitations, only Romania has ratified
Assigned amount??

7. Graphical Representation of the Kyoto Protocol
GHG Emissions or “BUSINESS AS USUAL”
GHG Emissions ton/ year for Annex B countries
AVG: %
2008
2012
1990: Base Year
First Commitment
Period;

8. Which Policies and Measures can be Implemented by Annex B Countries?
Domestic Reductions
Carbon Sinks
International Credits (Kyoto Mechanisms):
International Emissions Trading
Project –Based: Joint Implementation
Project – Based: Clean Development Mechanism
Supplementarity: (CoP 6 bis) “..domestic action shall constitute a significant element of the effort by each Party..”

9. The Kyoto Mechanisms: International Emissions Trading and JI
International Emissions Trading (IET)
Defined: trading of emission credits among developed countries
Russia may have large supply to sell
Joint Implementation
Defined: credit for emission reduction investments in Annex B countries
Emission credits can be accrued as of 2000, but can only be issued/ transferred once country becomes a Party
Nuclear in JI: Parties are to “refrain from using..”
Sinks: All activities are eligible

10. The Kyoto Mechanisms II: Clean Development Mechanism
Defined: credit for emission reduction investments in developing (non-Annex B) countries
Objectives:
To promote sustainable development in developing countries
To assist Annex B countries in meeting their emission reduction targets in cost-effective manner
Emission Reductions (ERs) must:
Create real, measurable, and long-term benefits related to the mitigation of climate change. (Art. 12.5b)
Be additional to any that would occur in the absence of the certified project activity. (Art. 12.5c)

11. What is Additionality?
“Additionality” is the key eligibility criterion for CDM projects.
You must do something that you wouldn’t have done without the CDM
Interpreted as “environmental additionality”:
Emission Reductions = hypothetical baseline emissions – effective (project) emissions

12. What are the Eligibility Requirements for the CDM?
Developing Countries must:
ratify the Kyoto Protocol >> to promote early coming into force of the Protocol
designate national CDM/JI focal point
Developed countries (Annex B) must:
ratify the Kyoto Protocol
be in good standing with reporting requirements
Parties must be subject to compliance mechanism

13. What are the Criteria for CDM Projects?
Sustainable development
Host country criteria
Environmental Impact Assessment
Stakeholder consultations
Emission reductions
Environmental additionality
Project viability
Technologically proven
Financially sound
Host country approval
Project validation and registration

14. The Clean Development Mechanism - Other Key Features
Prompt Start: projects can already begin to generate emission reductions
Simplified procedures for small projects:
Renewable Energy Projects up to 15MW
Energy efficiency with reductions of 15GWh eq./year
Other projects of less than 15,000 t/CO2 per year
To be agreed by CoP8/2003
Sinks in CDM: only afforestation and reforestation activities are eligible
Modalities by CoP9/2004 > manage the uncertainty
Nuclear in CDM: Parties are to “refrain from using..”

15. What can the CDM do for you?
Attract foreign investment to countries engaged in the trading CERs
Increase the profitability of cleaner more efficient technology in energy, industry, and transport sectors
Clean up waste management operations
Improve land-use strategies and practice
Contribute to sustainable development of the host country

16. Who can help you to develop a CDM project?
World Bank Carbon Finance Unit
Dutch CERUPT program
Development NGOs and consultants
UN Organizations (UNDP, UNEP, UNIDO)
Bilateral development organizations
Foreign companies

17. Questions? http://www.prototypecarbonfund.org http://www.ipcc.ch

18. Annex B Countries

19. 2008-2012 GHG Emission targets (100 = 1990)
Hungary
Iceland
Ireland (113)
Italy (93.5)
Japan
Latvia
Liechtenstein 92
Lithuania
Luxembourg (72)
Monaco
Netherlands (94)
New Zealand 100
Norway
Poland 94
Portugal 92 (127)
Romania 92
Russian Federation 100
Slovakia 92
Slovenia 92
Spain 92 (115)
Sweden 92 (104)
Switzerland 92
Ukraine
UK 92 (94)
USA 93
Australia
Austria (87)
Belgium (92.5)
Bulgaria
Canada
Croatia
Czech Rep. 92
Denmark (79)
Estonia
Finland (100)
France (100)
Germany (79)
Greece (125)
Between brackets: EU internal burden sharing agreement

20. Hot Air