CDM Review: see you in Bonn!

Posted by Jean-Benoit Fournier on December 14, 2008
COP 14-Poznan, Mitigation

Talks at Poznan about a re-engineering of the Clean Development Mechanism, Kyoto Protocol’s righteous son, have been Bonn-ed. This does not come as a surprise for some observers, but disappointment is understandable. As a flagship of the Kyoto Protocol’s market-based approach to climate change, one could have hoped that delegates fixed at least the most visible holes perforating its surface.

What holes?

UNFCCC recently removed DNV’s CERs verification licence. The unease about project managers hiring the verification team then found, rightly or wrongly, an a posteriori justification. (DNV said it would win back its licence within a month).

Speaking of discomfort, the demonstration of additionality by the project promoters themselves also raised concerns throughout the short history of CDM. With acute information asymmetry between promoters and the Secretariat, the demonstration of additionality can potentially suffer credibility deficit.

Finally, the environmental impact assessment (EIA) of CDM projects is regarded as insufficient. A good EIA would make sure, for instance, that we don’t remove CO2 from the atmosphere ruining an entire ecosystem in the process of doing so.

What can be done? Some suggestions from delegates, bloggers and specialists.

  • UNFCCC, not promoters, should hire and pay verification firms directly.
  • UNFCCC, not promoters, should assess additionnality.
  • Promoters should be required to conduct sound EIAs for CDM projects.

 

CDM being a rather complicated tool, its short history has given much weight to the procedural status quo. Project promoters, countries and Designated National Authorities (DNAs) have climbed up the learning curve of the actual CDM: they probably don’t want to start over again with new procedures.

In order to gather wide interest, an agenda for CDM should try to mix discussions on potential simplifications of project methodologies with discussions on the procedural modifications listed above.

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Related posts:

  1. Bonn in Review
  2. CDM Review: yes, we should…
  3. The G20 Summit – A Day in Review
  4. CDM approvals: A trade-off between speed and credibility?
  5. UNFCCC conference kicks off in Bonn

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Comments

  • Climatico » CDM Review: yes, we should…

    [...] thus refused, until recently, to acknowledge insufficiencies of CDM (see prior blog for more details). There are good and bad reasons for [...]

    January 09 2009
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    • Avatar of Jean-Benoit Fournier
      JBF

      I like the idea of playing a “balancing act between bureaucracy and confidence in additionnality”. Very hindsightful!

      By simplification, I had in mind a possibility for some DNAs to propose projects that are less methodologically complex in exchange for more conservative estimates of CERs.

      To illustrate, let’s say that countries A and B would both go for a similar CDM project. Country A hires a world-rank consultancy to register the project using a grade “A” methodology. Country B would decide to go for simpler methodology based, for instance, on prior studies and registered projects.

      The EB would then attribute a percentage of CERs that can be claimed (they would still have to be verified by a third party) depending on the degree of precision of the methodology.

      This was discussed in several meetings of the AWG-LCA prior to Poznan. The vision of “simplification” was more of a refusal of a “either in or out” vision of project registration.

      About transfers of technologies, I think we are all looking forward for more cooperation. What do you see as concrete means to foster that ?

      December 15 2008
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      • Dan

        I don’t think they will get anywhere with attempts to make the CDM simpler. They have to play a balancing act between bureaucracy and confidence in the projects’ additionality. I don’t think there is a simple way to make the whole thing quicker and more reliable. The real discussion should be about better ways to transfer technology and money so that developing countries can make quantified emission reductions. It shouldn’t be about tweaking the CDM process.

        December 15 2008
        CommentsLike