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Understanding CDM Methodologies - SuSanA

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Role of DOEs<br />

– Absence of<br />

Accreditation,<br />

Validation and<br />

Verification<br />

Standards<br />

DNAs check<br />

Sustainable<br />

Development<br />

Impacts<br />

DOEs validate 79 proposed <strong>CDM</strong> projects and verify emission reductions 80 . They<br />

have to show that they are free of conflict of interest regarding the project<br />

participant 81 . To get accreditation as a DOE, companies or institutions have to<br />

fulfil a number of requirements listed in, including the need to have insurance<br />

cover 82 , a management structure with quality assurance procedures 83 and<br />

documented structures which safeguard impartiality 84 . As project participants<br />

can freely select among accredited DOEs 85 , an intense competition for<br />

getting validation and verification assignments has developed between<br />

DOEs. In addition, project participants not only select DOEs but contract and<br />

remunerate them for their services. Some have argued for a revision of this<br />

relationship because of a potential conflict of interest – where DOEs may<br />

have difficult rejecting validation of projects as they could lose clients whose<br />

projects did not achieve validation. There are no standards for validation and<br />

verification (see section 2.2.3). No liability other than the risk of losing the<br />

accreditation exists for mistakes in validation. DOEs are liable for “excess<br />

CERs” issued due to significant deficiencies in verification found in an EBmandated<br />

review by another DOE 86 ; however no DOE has been fined so far.<br />

Countries can only participate in the <strong>CDM</strong> if they have ratified the Kyoto<br />

Protocol 87 . Countries have to specify a Designated National Authority<br />

(DNA) for project approval 88 . Annex B countries can use CERs only if they<br />

fulfil the requirements of Article 5 and 7 of the Kyoto Protocol regarding their<br />

emission inventory and specification of their emissions budget 89 .<br />

Companies and public entities have to be authorized to participate in<br />

<strong>CDM</strong> projects 90 ; this is usually done within the text of the approval letter<br />

by the DNA. They can only buy and sell CERs if the authorizing country is<br />

allowed to use CERs.<br />

Figure 1: <strong>CDM</strong> institutions<br />

accredits<br />

elects<br />

COP/MOP<br />

EB<br />

supervises<br />

support,<br />

recommend<br />

DOE<br />

MP<br />

A&R –<br />

WG<br />

AP, AT<br />

SSC –<br />

WG<br />

RIT<br />

UNFCCC<br />

Secretariat<br />

79<br />

Annex to decision 3/CMP.1, para 27 (a)<br />

80<br />

Ibid., para 27 (b)<br />

81<br />

Ibid., para 27 (d)<br />

82<br />

Appendix A to decision 3/CMP.1, para 1 (c)<br />

83<br />

Ibid., para 1 (g)<br />

84<br />

Ibid., para 2 (a) (i)<br />

85<br />

Annex to decision 3/CMP.1, para 37<br />

86<br />

Ibid., para 22<br />

87<br />

Ibid., para 30 and 31 (a)<br />

88<br />

Ibid., para 29. The preamble of 17/CP.7 had specified that sustainable development impacts of a proposed <strong>CDM</strong><br />

project are only checked by the host country.<br />

89<br />

Ibid., para 31. These requirements have been elaborated in decisions 12, 13, 15, 19, 20 and 21/CMP.1<br />

90<br />

Ibid., para 33<br />

15

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