Understanding CDM Methodologies - SuSanA

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2. CDM principles and institutions Sources of CDM Principles and Rules Framework Decisions and Discretionary Decisions Need for Hierarchy of Decisions System of Russian Dolls UNFCCC and Kyoto Protocol COP/MOP Decisions Guidance and Interpretation of Framework through COP The CDM is based on a huge body of rules. These rules have differing sources that define a de facto hierarchy. The highest level of rules is defined by international treaties that have been formally ratified by states, such as the Kyoto Protocol. The second level is an agreement by representatives of countries at a meeting of the international climate negotiation process, such as a COP decision. The third level is a decision of institutions created through an international treaty or the negotiation process, such as an EB decision. And on the lowest level, advisory bodies to an institution shape important parts of rules even if they formally do not decide on them – such as the Methodology Panel does with respect to proposed baseline methodologies. Depending on their hierarchical level, rules will have different characteristics and lifetimes. We differentiate them according to their stability over time into fixed “pillars” of the CDM regime which we call framework decisions and into discretionary decision making that often has a short lifetime. Up to now, there is no formal catalogue of decisions, nor a hierarchy of decisions which is a key weakness of the system and should be remedied to generate greater transparency and consistency of decision making. 2.1 CDM Framework There is a clear hierarchy of pillars of the CDM that can be compared with a system of Russian dolls, with the UNFCCC being the outermost shell, the Kyoto Protocol the second layer and the Marrakech Accords the third. The UNFCCC and the Kyoto Protocol The UNFCCC and its Kyoto Protocol are treaties that had to be ratified by countries and cannot be changed easily after ratification. The UNFCCC is likely to remain the foundation of international climate policy for a very long time. Legally the provisions of the Kyoto Protocol could remain intact while only the first commitment period expires in 2012. However, it is likely that the post-2012 climate policy regime will be based on a new protocol. Further new protocols to the UNFCCC are likely to emerge over time as has been the case in the ozone regime. COP/MOP Decisions As countries will not ratify treaties of thousands of pages, the pillars have gaps that need to be filled by detailed rules. Moreover, in some places ambiguous text is found that is due to the need to find a consensus in the negotiations without being able to agree on certain points. These ambiguities need interpretation. Thus, generally the pillars are not sufficient to implement CDM in practice. They define principles that have to be supplemented by further more detailed guidance, decisions on rule details and technical explanations. Such decisions will be taken by the annual Conference of the Parties to the UNFCCC and the Meeting of the Parties to the Kyoto Protocol, which are customarily held at the same time. 8
Special Status of the Marrakech Accords “Ordinary” COP decisions The Marrakech Accords – a special form of COP/MOP Decisions The Marrakech Accords are a group of decisions by COP 7 in 2001 and defined the details that could not be specified in the Kyoto Protocol 3 . So in theory they can be changed easily. However, there has been a tacit consensus that changing a part of them would destroy the carefully crafted equilibrium and jeopardize the implementation of the Kyoto Protocol. Nevertheless, some amendments have been made over time. During each COP, a decision on CDM issues will be made which is usually framed as “guidance” to the EB. This type of decision belongs to the discretionary decision making. 2.1.1 General CDM Principles The UNFCCC UNFCCC Principles regarding Market Mechanisms Annex I Commitments As the term CDM was only defined in the Kyoto Protocol, the UNFCCC obviously does not contain CDM-specific rules. However, it contains a number of important principles that were preconditions for development of the CDM. The principle of common but differentiated responsibilities means that countries with a low degree of economic development and historical responsibility do not have to take up commitments, while those with a high development status and high responsibility do so 4 . However, all states participate in some action against climate change. While the UNFCCC did not introduce any legally binding emission commitments, it specified that industrialized countries (so-called Annex I countries) should take the lead in combating climate change and that they can implement commitments jointly 5 . This clause is the foundation stone of all market mechanisms in international climate policy. The Kyoto Protocol The cornerstone of the Kyoto Protocol is the set of legally binding emission commitments for a group of 38 industrialized countries and countries in transition (so-called Annex B countries). These commitments relate to a basket of six types of greenhouse gases that are converted into CO 2 equivalents by using their Global Warming Potentials for a 100-year timeframe, as specified in the IPCC’s 2nd Assessment Report of 1995. The commitments are to be reached in the commitment period 2008-2012 and quantified in comparison to a base year of 1990 6 . On this basis, an emissions budget is defined for the commitment period. 3 They were put in the form of a COP decision to be substituted by a decision of the first Conference of the Parties serving as a Meeting of the Parties to the Kyoto Protocol (COP/MOP) once the Kyoto Protocol had entered into force. As entry into force of the Kyoto Protocol took until 2005, the first COP/MOP was only held in December of that year in Montreal and rubber-stamped the decisions made in Marrakech, repeating them word by word. The references used here relate to the Annex of Montreal decision 3/CMP.1, which was derived from the Annex to Marrakech decision 17/CP.7 4 UNFCCC, Art. 4,1 5 Ibid., Art. 4,2 a 6 Countries in transition were allowed to use a different base year; some countries chose the year or period in the late 1980s when their emissions reached their peak. 9
Page 1 and 2: Understanding CDM Methodologies A g
Page 3: Introduction The success of the Cle
Page 7 and 8: 1. Introduction Climate Change is a
Page 9: Aim of Guidebook This guidebook wil
Page 13 and 14: Small Scale Thresholds over Time Cr
Page 15 and 16: Transparency, Conservativeness, Con
Page 17 and 18: Role of DOEs - Absence of Accredita
Page 19 and 20: Figure 2: The CDM project cycle CER
Page 21 and 22: EB Decision Making and the Role of
Page 23 and 24: While COP/MOP has provided that Lar
Page 25 and 26: Verification Regarding verification
Page 27 and 28: 3. Barrier analysis, with the aim t
Page 29 and 30: Rejections due to Lack of Additiona
Page 31 and 32: 4. Methodologies Methodology Case L
Page 33 and 34: Figure 9: Fuel switch family tree M
Page 35 and 36: Interpretation of top 20% in Approa
Page 37 and 38: 4.1.4 Leakage Unclear Definition of
Page 39 and 40: Top-down Methodology Development fo
Page 41 and 42: Table 4: Methodology revisions 2005
Page 43 and 44: 5. Key elements and application of
Page 45 and 46: Two Methodologies added Nitric Acid
Page 47 and 48: Methodological Concept Power Genera
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Page 51 and 52: Build Margin Build Margin: newest P
Page 53 and 54: Box 16: OM/ BM calculation where th
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Page 59 and 60: Leakage Leakage: Transfer of Equipm
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Box 20: Sufficient natural gas supp
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• Option 3: The emission factor o
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Industrial Gas Methodologies 5.3 De
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No Additionality Problem Another co
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In a second step, it is tested whet
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Determination of the Emission Facto
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Baseline scenario and additionality
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Box 27: Ensuring accuracy of measur
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5.4.2 Basic concept Emissions Reduc
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Default Cogen Plant Efficiency 90%
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5.4.4 AMS-II.D Project Description
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5.4.5 AM0046 This methodology warra
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• Information on any changes made
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Displacement of Natural Gas in Pipe
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Landfill gas capture and flaring ac
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Ex post: The main parameters that n
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Box 31: Deviation of monitoring met
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Box 32: Measurement of the flare ef
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Expanding of Applicability Conditio
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Seven-Step Procedure for Measuremen
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Project boundary Transport of Waste
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Biomass Leakage: Proving that there
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5.6 .3 ACM0008 Description of the c
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• Methane used for electricity an
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Applicability conditions Definition
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or retrofit. This baseline holds fo
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• For biomass-fired projects, a s
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A handful of projects have submitte
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Submission of further Baseline Scen
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Heat only Projects Baseline Scenari
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• Quantity of steam diverted from
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