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Learning from the CDM

Learning from the CDM. First UNFCCC workshop on Article 6 projects under the Kyoto Protocol 26-27 May 2004 Moscow, Russian Federation John Shaibu KILANI Chair of the CDM Executive Board. Structure of the presentation. The status of the CDM in May 2004

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Learning from the CDM

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  1. Learning from the CDM First UNFCCC workshop on Article 6 projects under the Kyoto Protocol 26-27 May 2004 Moscow, Russian Federation John Shaibu KILANI Chair of the CDM Executive Board

  2. Structure of the presentation • The status of the CDM in May 2004 • The challenges ahead for the CDM Board • Lessons from the CDM • General • Governance • Communication • Conclusions

  3. Status of the CDM in May 2004 • The Board is delivering its share of the “prompt start” of the CDM. After 2 + years: • All elements for operating the CDM are up and running. COP satisfied with progress. • Key outputs are being generated by the Board. • Methodologies are being approved (11) • Operational entities are accredited (2) • First projects to be registered soon • First credits may be issued in 2004 • Governance structures (Board, procedures) and technical support (panels, experts) are in place.

  4. Challenges ahead for the CDM Board • Managing a large caseload on methodologies and accreditation • Advancing on the consolidation of methodologies • Bracing for a series of registration of projects • Setting up the CDM registry • Further streamlining processes, wherever feasible, for the timely and cost-effective delivery so that transaction costs are contained

  5. Challenges ahead • In addition, COP 9 requested: • The Board to do additional work to include CDM afforestation and reforestation projects in the first commitment period and • to intensify work on methodologies, guidance to promote broader applicability of methodologies. • Parties to advance on capacity-building, including a role for NGOs and IGOs (for promoting designated national authorities (DNAs) and designated operational entities (DOEs) - regional distribution).

  6. Lessons from the CDM - general • The CDM attracts increasing interest as a promising concept for South-North collaboration, coupling environment and sustainable development, departing from ODA patterns, being built from bottom up, participatory and open for public scrutiny. • Potential for CER-financing of projects, which would otherwise have been left aside (e.g. renewables), needs to be seen against perceived market and regulatory risk. • A mechanism, such as the CDM, can successfully be set up and operated under international authority. • National structures for the CDM are rapidly expanding. • Good up-front quality (of methodologies, applications, project design documents) is essential for the process to work well.

  7. Lessons from the CDM - governance • A body constituted by Parties can exercise operational functions if it has, such as the CDM-EB: • decision-making power (e.g. on accreditation and provisional designation), while being under the COP’s overall authority • option to vote on a matter if consensus is impossible. • Wide regional representation of membership is important for the acceptability/legitimacy of decisions. • The competence and personal integrity of members are essential: they act in their personal capacity, take an oath of service and disclose if they have any conflict-of-interest.

  8. Lessons from the CDM - governance • Expertise of high quality needs to be acquired for technical tasks. • Clear rules must be in place (rules of procedure, clear terms of reference for panels). They must be intelligible and easy to track. • Rules and procedures must be kept under review so that they can be adjusted when needed. Learning-by-doing is core. • Beware of overreacting to teething problems.

  9. Lessons from the CDM - communication • Good and steady communication through various means (e.g. meetings, intranet) among Board and panel members is essential. • Board meetings are webcast live and are also available on demand. • UNFCCC CDM web site is widely used as authoritative source of information. Invaluable to ensure a level playing field and transparency! • Interaction with stakeholders and public input are among the resources for achieving “efficiency, cost-effectiveness and transparency”.

  10. Lessons from the CDM process – conclusions • Pioneers need to be applauded for taking the risk of early exposure: • operational entities • project proponents • Stakeholders • Lessons can be drawn from tangible results of the CDM process, e.g. • On methodologies (baselines and monitoring) • On accreditation • See website. • Lessons are particularly relevant for JI track 2, but also instructive for track 1. • Thank you.

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