The body charged with the administrative oversight of the United Nations’ Clean Development Mechanism (CDM) is showing signs that a critical transition in the technical framework may be coming.

The CDM Executive Board (EB); currently the judge, juror and executioner of the Kyoto Protocol’s cornerstone carbon offsetting mechanism, could receive a much needed shake up, and not a minute too soon.

CDM-EB Meeting

CDM-EB Meeting

Pressure Points

The demands from the mechanism until the end of 2012 are sure to be intense as the UN (and its climate policy body, the UNFCCC) are placed under pressure to deliver on international climate policy.

Providing the framework to extend the life of the CDM beyond 2012 is one of the crucial outcomes required from UNFCCC negotiations.  The lack of any concrete resolutions on this matter from Copenhagen in December did little to allay the vast uncertainty that currently resides in the CDM.

Without the Kyoto framework, which technically ceases to exist from 2013, the CDM is in danger of failing simply because of regulatory and political uncertainties.  In order to survive, the challenges in the next few years need to dealt with head on if expectations are to be met, and criticism subdued.

Meeting the Challenge

The EB’s recent 52nd meeting (taking place approximately every six weeks) was the first one following December’s negotiations.

Among the usual list of actions which required their attention (project approvals, issuance reviews, methodology considerations, etc.) were a wide range of important topics that had to be considered; including appointing a new chair and vice-chair and establishing an independent committee to assume technical responsibility for project approvals et al.

The EB was also urged to speed up processes and to increase the volume of emission reductions delivered from projects.  The daunting task to improve the overall time it takes projects to enter the pipeline and issue the all-important Certified Emission Reductions (CERs) falls to one person.

Clifford Mahlung, lead climate negotiator for Jamaica, was promoted from vice-chair to resume control of the EB during what will arguably be the most important two years of its existence.

The proposed improvements are anticipated to increase the scope and scale of the CDM, especially in terms of volumes of CERs issued and the regional distribution of the projects to countries that are yet to benefit from the CDM.

Balancing Point

Mahlung is expected to steer the CDM towards equilibrium of the three central inputs to any project-based mechanism: quality, time and cost, whilst ensuring the emission reductions in the CDM remain environmentally credible and uphold the integrity of the mechanism.

In an effort to reduce the time it takes projects to move through the milestones in the CDM pipeline, which has been the main drawback experienced to date, Mahlung is hoping to adopt a more automatic approach to project approvals.  However, the detrimental impact this may have on the quality of emission reductions and cost of projects needs to be accounted for.

The EB has so far been overwhelmed by the administrative demands on its members.  So the introduction of a Project Assessment Committee (PAC), a group of 12 technical experts, is expected to lighten the load on the EB from its technical approvals and reviews.

Whether this proposal aids processes, or merely increases the depth of bureaucracy in the CDM by adding another committee into the mix, remains to be seen.

In any case, signals of technical improvements could be just what potential participants are looking for.  There was a danger that a lack of clarity surrounding the CDM after 2012 was severely stifling potential investment.  After all, when the outlook for a healthy return on investment is uncertain, investors will be understandably discouraged.

Positively, what Mahlung has quickly accepted is that until the ‘post-2012 problem’ is figured out on the international arena, his immediate responsibility lies with improving the CDM now.  The opportunity for underlying growth in the CDM before the 2013 Kyoto deadline is considerable, but is matched in size by the challenges ahead.

As ever, time will tell whether Mahlung is up to the task.

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