New CDM rules aimed at helping smaller countries

Despite the Kyoto Protocol lapsing at the end of next year - unless something is done about it - a meeting of the Clean Development Mechanism Executive Board in Marrakesh, Morocco last week approved two important guidelines that should allow low-greenhouse-gas emitting countries and underrepresented countries to benefit more from the mechanism.

The first, Guidelines on Standardized Baselines, allow countries to calculate the typical emissions for an entire sector and create a list of technologies or measures that automatically qualify for approval because of their ability to reduce emissions below that baseline level. For example, a stove recognized as being more efficient than the regular, higher emitting stove might automatically qualify for approval.

The second, known informally as Guidelines on Suppressed Demand, allow project developers to assume a level of development in underrepresented countries that would lead to emissions, to be avoided. For example, a project that installs an advanced water treatment facility in a country with no water treatment facilities might earn credits. This would allow countries to leap frog to clean technology without first having to suffer through dirty technologies.

"The result of these two guidelines should be a clearer, more straightforward path to project development and approval. It's reasonable to expect that this will lead to life-improving projects in countries and regions that have so far missed out on the benefits of the CDM," said CDM Board Chair Martin Hession.

Improving transparency

Another important piece of work adopted at the meeting, modalities for direct communication with CDM stakeholders, will enhance private and public sector interaction with the Board, add clarity to the regulatory process, and could expedite the answering of questions that otherwise might slow the vetting of projects.

To date over 3,200 projects have been registered under the CDM, allowing emission reduction initiatives in developing countries to generate additional revenue by issuing and selling certified emission reduction (CER) offset credits. But over half of CDM-approved projects have come from the large emerging economies of China, India and Brazil, prompting accusations that smaller and less developed countries are struggling to access a mechanism designed to drive investment in clean technologies.

At the meeting, the Board considered the question of whether CDM's rules and procedures ensuring stakeholder consultation are being followed and whether they are adequate. The Board will launch a call for public inputs on local and global stakeholder consultation. It also asked the UNFCCC secretariat to analyze how the adequacy of stakeholder consultation is validated by designated operational entities (accredited third-party certifiers).

"The CDM is evolving and improving, thanks in large part to the engagement by the private and public sector. These decisions represent a significant improvement in terms of transparency and stakeholder engagement, to what was already a very open process," said Hession.

Big coal OK

At the same meeting, however, the Board rejected a move to block the issuing of Certified Emissions Reductions for "ultra mega thermal power" projects. A UN panel had recommended taking these off list of projects approved for earning carbon credits on the grounds that claimed emission reduction was exaggerated by 25 to 50 percent.

China and India, which are the primary beneficiaries, lobbied hard to block the move. Of the 37 ultra mega thermal power projects under consideration, 26 are from India and 11 from China. Of the three projects already registered, one is from India and two from China.