The CDM Project Activity Cycle UNFCCC CDM joint

The CDM Project Activity Cycle UNFCCC CDM joint workshop 21 -22 March 2003 Bonn Franz Tattenbach Member CDM Executive Board Vice Chair CDM Meth. Panel Kai-Uwe Barani Schmidt UNFCCC/Cooperative Mechanisms kschmidt@unfccc. int

Background Negotiations challenge: make it conducive to private sector / intergovernmental decision making / environmental integrity Outcome(!simplified!): Delegated system whereby Executive Board approves methodologies and accredits designated operational entities (DOE). DOE registers project activities which apply approved methodologies subject to a request for review by the Board or Parties involved

CDM project Cycle Institutional Setup Project Operational Participant(PP) Entity (DOE) COP/ MOP Executive Board(EB) Project Design Validation/Registration * (within 8 weeks) OR Validation /Registration New Methodology Monitoring Verification & Certification Issuance of CERs * An automatic step unless a review requested. * Companies (private/public) (within 15 days)

CDM project activity cycle AE 0 Design PP DOE Validation/registration Monitoring Verification/certification Issuance EB PP DOE EB CER EB&COP/MOP DOE DNA

Design of a CDM project activity PP DOE DNA EB PP DOE EB CER Baseline and monitoring methodology – (new or approved) Information to be provided (Appendix B / CDM-PDD) Sustainable development (info with DNA of host? !) “Preamble”: – Transfer of sound and safe technologies – No diversion of ODA

Validation / Registration PP DOE DNA EB PP DOE EB CER Designated operational entity Validation process – (new or approved methodology) Validation requirements Designated national authority – Written approval prior to submission of request of registration Registration by EB: – An automatic step unless a review is requested within eight weeks by one Party involved or three board members

Monitoring PP DOE DNA EB PP DOE EB CER Project participant or third party Provisions for the monitoring plan(MP) / Monitoring methodology Implementation of MP condition for verification-certification and issuance Monitoring report

Verification – certification PP DOE DNA EB PP DOE EB CER Designated operational entity – Verification: Ex post determination – Certification: written assurance Monitoring report: DOE to make publicly available Verification process Verification report Certification based on verification Verification and certification report publicly available

Issuance PP DOE DNA EB PP DOE EB CER Certification report submitted to EB by DOE is a request for issuance Issuance final after 15 days if no request for review of DOE because of fraud, malfeasance or incompetence of DOE CDM registry administrator issues and withholds share of proceed for administration and adaptation

Design/validation/ registration New idea s PP Repository of approved methodologies

Additionality and baseline methodology PP Additionality is defined in terms of GHG emissions (para. 43) DOE DNA EB PP GHG DOE EB Baseline = the scenario that reasonably represents what would occur in the absence of the registered project activity => methodology to determine (para. 44) CER If GHG of proposed CDM project activity smaller than GHG of baseline -> additional CERs CDM project activity t

Information to be provided Appendix B / PDD: – Summary of comments by local stakeholders and how due account was taken of them; – Documentation on analysis of environmental impacts; – Additionality and Baseline and monitoring methodologies conform with requirements of M&P; – Provisions for monitoring, verification and reporting conforms with requirements of M&P In addition, – Letter of approval by Parties involved (SD confirmation by Host Party) M&P: Modalities and procedures of the CDM

Design/ validation/ registration Design/validation/ New idea s Submits CDM-PDD PP Repository of approved methodologies New methodology OEx Rejects if not conform with validation requirements else forwards OE 1 OE 2 … OEn EB Two cases Approved method. “Automatic” on r d e rio aft ic Submits request to e s t p ent ubl n EB for registration me irem DD p m u -P o s c req DM y da ion s C PP to provide to OE written approval of 30 lidat ake voluntary participation by DNA of each party involved va x m E O UNFCCC: Parties, stakeholders, accredited NGOs Rejects new method. Registration CDM proj. activities Project 1 Project 2 … Project n UNLESS Review is requested If requested within 8 weeks by either one Party involved or at least three board members.

Verification - certification and issuance: flow chart OE 1 OE 2 … OEn PP PP contr acts CERTIFICATION report OEx* =request for issuance -Issues into registry accounts rt(s) o p e gr orin it Monitoring Report Verification Report Certification Report CERs VERIFICATION activities Monitoring data Site visits if deemed necessary by OEx Issuance Assigns Ser. No by EB -Collects SOP UNLESS Review is requested If requested within 15 days by either one Party involved or at least three board members. Only fraud, malfeasance or incompetence of OE! * An OE may be allowed by the EB to perform validation and “verification and certification” for the same CDM project activity

CDM project Cycle Roles and responsibilities Project Operational Participant(PP) Entity (DOE) Project Design Confirm that requirements are met OR Verification & Certification Issuance of CERs * An automatic step unless a review is requested. MOP Executive Board(EB) Provide info Validation/Registration Validation /Registration New Methodology Monitoring COP/ * (within 8 weeks) Implement Certify ERs * Companies (private/public) (within 15 days)

Legend PP =project participants; AE = an applicant entity EB = executive board of the CDM DOE = designated operational entity (Any private or public body that has been accredited by EB and designated by COP/MOP) DNA = designated national authority for the CDM (The request for registration needs to include a written approval of voluntary participation by the DNA of each Party involved) CER = certified emission reductions M&P = Modalities and procedures of the CDM