getting heard in the madhouse: a citizen's guide to the cdm

8/8/2019 Getting Heard in the Madhouse: A Citizen's Guide to the CDM

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Getting Heard in theMadhouse:

A CITIZENS GUIDE TO THE CDMPatrick McCully

Rivers for Life 3

Temacapauln, Jalisco, Mexico

October 2010


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Climate change Global warming is a major threat to

communities in developing countries Wet areas getting wetter; dry areas getting drier;

extremes getting more extreme

Many sources of greenhouse gases: biggest

contribution is from burning fossil fuels

US & China are biggest polluters


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Origins of the CDM The Kyoto Protocol (1997) to the UN Framework Convention on Climate Change

(UNFCCC)

Sets targets for industrializedcountries to reduce emissionsby an average of 5% below1990 levels in the period

2008-2012


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Purpose of the CDM Under Kyoto, the Clean Development Mechanism is supposed to reduce emissions

and promote sustainable development by: allowing project developers in developing countries to gain revenue by selling carbon

credits for projects that reduce greenhouse gas emissions and

allowing offset buyers (industrialized

country companies and governments)

to use credits to comply with Kyoto-

mandated emissions reductions


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The CDMsCurrency: CERs

Carbon Emission Reduction

= 1 tonne of CO2-equivalent not emitted to the atmosphere


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Current CDM Pipeline:5513

PROJECTS

Adapted from UNEP Risoe


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Expected CERs by 2012


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Key Problems with the CDM

1. Lack of additionality

2. Inefficient & ineffective

3. Perverse incentives

4. Climatologically insufficient

5. Inequitable

6. Lack of sustainable

development


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Lack of Additionality What does additional mean?

- CDM credits must represent real emission reductions that only happened because of

CDM revenue/recognition Non-additional projects allow emissions in industrialized countries to increase without

reducing emissions in a developing country.

Estimates of non-additional projects range from 40% to most. Actual number is

unknowable


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Additionality Testing Most projects prove additionality with the following tests:

- Investment analysis shows whether project is profitable without CDM income

- Barrier analysis show where there are barriers that prevent project implementation without theCDM (e.g. project is located in a remote area, project ran into financial difficulties, etc.)

- Common practice demonstrates whether the project type is common in the relevant sector and

region.

THESE TESTS ARE HIGHLY SUBJECTIVE


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Inefficient & Ineffective Inefficient

- emission reductions could be achieved cheaper in other ways Ineffective- CDM revenues too low and too unpredictable to support emerging technologies

- Process extremely opaque, complex & bureaucratic

- Unsuitable for small projects

- Supports cheapest, least best solutions (e.g. natural gas) rather than

transformative solutions (e.g. solar)


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Perverse Incentives The CDM is increasing production of the refrigerant HCFC-22 in order to

produce more waste gas (HFC23) for more CDM credits

Discourages climate friendly policies


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Insufficient To stay below 2C, we need reductions in both industrialized and

developing countries

No climate benefit from Southern emission reduction opportunities if

these delay climate action in the North


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Inequitable Increases future costs of developing countries own reductions

Levy on CDM revenue for adaptation fund

=> developing countries pay costs of adaptation

Most funds go as extra profits to corporations & developers in China and other

middle-income countries


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Sustainable Development Little or no sustainable development benefit

Host country defines sustainable development Lack of safeguards for stakeholder consultations

Some projects cause social and environmental damage:

- Dams

- Industrial projects

- Gas-fired power plants

- Coal?


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Hydro in the CDM Majority of CDM hydro projects in China (then Brazil, India and Vietnam)

As of 4 Sept 2010:

1525 hydro projects seeking registration

749 (56,771 MW) large hydro ( > 15MW)

71% of large hydros in China

16m CERs issued from 177 big hydro projects

All big hydros in pipeline would produce 166m CERS/year

[Mexico fossil fuel emissions 2007 = 129m tonnes]


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Big dams in the CDM:NON-

ADDITIONALITY

More than a third of the hydros approved already completed at the time of registration

Almost all already under construction

No substantial increase in the number of large hydros under construction


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Big hydro in China Worlds largest installed hydro capacity

Hydropower technology at mature stage

Project development mostly carried out by a small number of state-owned or state-

controlled actors

Loans from banks for 75% or more of capital costs

No need for subsidies

Plans to double installed capacity to

225 GW by 2020

Almost 2/3 Chinese large hydro projects

applied for CDM in 2007


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CDM Project Lifecycle1. Validation

2. Registration

3. Verification & Certification

4. Issuance

Stakeholder Input in yellowboxes


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ValidationProject Design Document (PDD)

written by the developer or a hired consultant

Host country approval of CDM Project

by countrys Designated National Authority (DNA)

PDD undergoes validation

by certified CDM auditing company, called a

Designated operational Entity (DOE)

30-Day Public

Comment Period

Project can be withdrawn

Developer must consult

you on the design of the

project.

Your DNA must approve the

project and you should

have input in this decision.


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RegistrationRequest for registration

The PDD and validation report are submitted to the CDM

Secretariat

Review by UNFCCC Registration and

Issuance Team

CDM Executive Board (EB) approval

Project is registered

Project may be

held from

validation

Project may be rejected

Project may require

correctionsCan lobby government to

request a review, orconvince 3 members of

CDM Executive Board to

request review.


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Verification & Certification

Monitoring

The project developer must monitor all the data

required by the PDD monitoring plan to calculate the

number of credits to be generated

Monitoring Report

written by the developer or a hired consultant;

developer decides how often

Verification & certification of monitoring

report

by the DOE

DOE may interviewyou during

verification.


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IssuanceRequest for Issuance

Monitoring and Verification & Certification reports are

submitted to the CDM Secretariat

Review by the UNFCCC Registration and

Issuance Team

CDM Executive Board approvalCERs are issued

Last chance to influence

process by lobbying your

government to request a

review, or convincing three

members of CDM Executive

Board to request review.


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Summary of opportunities for input in the

CDM project cycle

Consultation by developer on the design of theproject

During the preparation of aproject

Public commenting periodEnvironmental ImpactAssessment

Input whether the project contributes tosustainable development

Host country approval

15-day public comment periodNew baseline and/or

monitoring methodology

30-day public comment period.At validation

Trigger a request for reviewWhen requesting registration

Contact with DOE is possible anytimeDuring verification and

monitoring period


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Need more opportunities to intervene

OBLIGATORY meeting to be conducted by anindependent non-governmental panel

Report of the panel in public domain

During the preparation of a

project

NGO representatives must be included in DNAdecisionsHost country approval

Penalties if comments are not taken into account

Recommendations to be mandatory

Translations of PDDs into local languages

Public commenting periods

SECOND official public commenting period

Involvement of civil society and local governmentsin the process

Verification

If poject is violating agreed plans it must bedisqualified from CDMMonitoring


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More transparency needed

Dates of receipts of the project applications, agenda notesand minutes of the CDM board meetings

Clearance letters and reasons when a project is rejected

Local governments(DNA)

Access to ALL stakeholder meetings

Minutes of closed meetings

Alert emails for commenting period

Executive Board

Tranlations of PDDs in locallanguages

DOEs / project

developers Information about CERs purchased

from which projectCER Buyers


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Writing a CommentAddress the following questions:

1. Will this project go ahead anyway (is it already built, under construction, normal practice)?

2. Is the emissions baseline an accurate estimate of what will happen if the project were notregistered as a CDM project?

3. Has the DNA approved this project?

4. Does the project contribute to sustainable development?

5. Were local people consulted?

6. Is the social & environmental assessment adequate?

Back up arguments with written evidence and provide links.

Ask International Rivers, CDMWatch for help

For examples of comment letters, see:

http://www.internationalrivers.org/en/node/1741


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Useful Links for Stakeholder

Input Contact info for your host countrys DNA: http://cdm.unfccc.int/DNA

30-day public comment period on PDDs:http://cdm.unfccc.int/Projects/Validation/index.html

15-day public comment period for experts on new methodologies:

https://cdm.unfccc.int/public_inputs/index.html

Procedure for contacting the CDM Executive Board for unsolicited comments:

http://cdm.unfccc.int/Reference/Procedures/eb_proc01_v02.pdf


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Contact:Eva Maria Filzmoser

CDM WatchBonn, Germany

[email protected]

www.cdm-watch.org

Payal ParekhInternational RiversBerkeley/Bern

US/Switzerland

[email protected]

www.internationalrivers.org/climate

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