Applicant entities / Designated operational entities Different checkpoints for new methodologies

1. Baseline Methodologies for LULUCF: OverviewB. Schlamadinger* Joanneum Research, Austriabernhard.schlamadinger@joanneum.atTraining Seminar for BioCarbon Fund ProjectsWashington, 11-13 July 2005

2. Contents • Applicant entities / Designated operational entities • Different checkpoints for new methodologies • Baselines and additionality • Results of methodologies submitted • Reasons for rejection; recommendations for the future • When are projects different? Classification of methodologies for BioCF projects

3. Methodology submission through AE or DOE AEs and DOEs can submit new methodologies in the name of the project proponent. AEs and DOEs are obliged to check the completeness of the proposed methodologies BUT do not check the correctness of the new methodology – in contrast to the process later on in validation with respect to the PDD Hence, AEs and DOEs function more as a mailbox than being a first quality control. Source: M. Rumberg, Tuev-Sued

4. DOEs role in the submission process • Desk review of PDD and new baseline and monitoring methodology • Verification of the completeness of the submitted PDD, NMB and NMM • Submission of the PDD, NMB and NMM to the UNFCCC secretariat • Filling the necessary forms • Communicating with the Secretariat If necessary, the methodology must be adjusted for registration: • Submission of (revised) documents to EB for the approval of the new baseline and monitoring methodology • Ongoing communication with EB during the approval process Source: M. Rumberg, Tuev-Sued

5. Role of DOE in Validation Definition: Assessment of project feasibility and chances to generate emission reductions. Basis: Project Design Document (PDD) Assessment of the following parameters: • Voluntary participation / DNA / Kyoto-Protocol Ratification • Project design • Additionality • Emission reduction: Baseline-Study (Choice and application, crediting period, leakage und project boundaries, calculation) • Monitoring • EIA • Stakeholder process Qualitative Assessment Source: M. Rumberg, Tuev-Sued

6. Different stages of checking methodologies • AE / DOE • CDM Team (UNFCCC Secretariat) • AR WG • Desk review by 2 external experts • 2 AR WG members compile reviews by experts and their own opinions into recommendation

7. AR WG checklist for baseline methodologies (no detailed checking, just compliance with 19/CP.9) • This is meant to help projects save time if there are obvious deficiencies • Definitions – baseline removal by sinks, net removals, leakage, positive and negative • Eligibility of land • Determination of baseline (one of the three approaches) • Non CO2 correctly calculated • Project boundary • National policies • Additionality checked, quantitative and qualitative • Leakage properly treated/all sources covered • Conservative approach/assessment of uncertainties • Monitoring meth follows the baseline meth?

8. Rating per AR WG recommendation to EB • Preliminary rejection (after screening by AR WG member) is meant to help project proponents to avoid time loss. • A: accepted, further modifications exclusively by AR WG • B: project participants get 2 weeks to address open issues (can be preferable to A, as participants have control over modifications) • C: Resubmission necessary (can help the project in the long term to save time) • NMB can be approved even if NMM is rejected • NMM cannot be approved without NMB

9. Additionality Decision 9 / CP.9, para 18: An afforestation or reforestation project activity under the CDM is additional if the actual net greenhouse gas removals by sinks are increased above the sum of the changes in carbon stocks in the carbon pools within the project boundary that would have occurred in the absence of the registered CDM afforestation or reforestation project activity. Additionality is not simply the difference in GHG emissions and removals between baseline and project scenario AR additionality tool coming up for public commenting (next few weeks)

10. Baseline approaches (para 22, CDM AR modalities and procedures) • A: Existing or historical, as applicable, changes in carbon stocks in the carbon pools within the project boundary; • B: Changes in carbon stocks in the carbon pools within the project boundary from a land use that represents an economically attractive course of action, taking into account barriers to investment; • C: Changes in carbon stocks in the pools within the project boundary from the most likely land use at the time the project starts. • A versus C: latter for projects where the land use is known to change before project. Otherwise A and C are identical • Additionality test must be SEPARATE

11. cdm.unfccc.int/Panels/ar/ARWG04_Annex1_AR_Additionality_Tool.pdfcdm.unfccc.int/Panels/ar/ARWG04_Annex1_AR_Additionality_Tool.pdf Draft A/R CDM Additionality tool – Flow chart Pre-screening (may be transferred to a separate tool): • Eligibility of lands Not additional Alternatives to the project activity (including common practice) Not additional Investment analysis Barrier analysis Not additional Not additional Impact of CDM registration Not additional CDM Activity is additional Source: W. Galinski

12. ARNMBs proposed so far

13. Reasons for rejection of NMBs to date • Incomplete • Not following 19 CP9 requirements • IPCC Guidance not used • Language (drafting) problems • Scope and applicability (too broad/narrow) • Data, equations (errors, lack of quality, not possible to monitor) • Assumptions and parameters are not adequately chosen • Improper baseline definition • Lack/inadequate additionality check • QA/QC procedures and transparency

14. Reasons for rejection of NMBs to date (baseline) • NMB was main stumbling block so far. (NMM had IPCC GPG to build on) • Process for selecting the most plausible scenario is not satisfactory • Baseline was assumed to contain no tree planting, but this was not substantiated • Baseline is based on activities occurring outside the project area • No additionality tool was used; additionality was understood as difference between project and baseline. Should be: project would not have occurred in absence of CDM funding. • Baseline included non-CO2 gases • baseline: control plots monitored during project, but model for determining baseline management not described • Conflict of interest when project participants manage control plots (for baseline estimation)

15. Reasons for rejection of NMBs to date (miscellaneous) • Land eligibility not assessed, or improperly assessed • Carbon pools not estimated separately • GHG emissions estimation from project not complete (e.g., N2O from fertilizers) • No prediction of baseline and project C stock changes • Self developed additionality tool not adequate • Uncertainties not assessed AND no conservative assumptions (at least one of the two is necessary) • Leakage from displacing agricultural activities not assessed • Positive leakage: must not be included (not a sole reason for rejection)

16. Some recommendations • Avoid any of the above, learn from these mistakes • Conservativeness may be easier to achieve than a detailed uncertainty analysis • Use standard additionality tool http://cdm.unfccc.int/EB/Meetings/016/eb16repan1.pdf Or even better the upcoming AR standard add Tool cdm.unfccc.int/Panels/ar/ARWG04_Annex1_AR_Additionality_Tool.pdf • Small scale: it may be preferable to wait for the “top-down” methodologies from the AR WG (coming soon) • Consider EB clarifications on national / sectoral policies http://cdm.unfccc.int/EB/Meetings/016/eb16repan3.pdf • Keep the NMs short and concise, avoid repetition • Consider teaming up with other projects (internal review among projects)

17. What makes a baseline methodology different from another one? • Pre-project land use • Generic vs. project specific • Baseline approach (a, b, c) • Additionality tool (standard / project specific) • Proposed procedure for national policies • Control plots for baseline? (only approach b?) • Way how leakage is addressed • Land eligibility test (standard tool coming up?)

18. Possible classification of methodologies for BioCF projects • Degraded lands with no attractive baseline use • Little vegetation, hardly any trees (not likely to become forest) • Lands in slash and burn cycle (could become a forest) • Projects on grazing lands (special leakage assessment for activity displacement) • Agro-forestry projects that avoid leakage by activity displacement • Projects which may appear attractive even w/o CDM funding (e.g., timber plantations; timber market leakage needs to be checked)

19. Steps for NMBs in BioCarbon Fund Projects • Screen the existing NMBs • If one is acceptable that is already published: use it (it may be worthwhile to compromise, in order to make methodology acceptable: e.g., omit soil carbon if needed, saves costs and reduces risk on methods development) • If one seems applicable but is not yet accepted  consider contacting the proponent and ask for permission to use it • If one is similar: use key concepts and ideas • If none is similar: screen other upcoming projects and consider collaboration • If none of the above: draft new methodology

20. Projects should work together in drafting methodologies • Helps avoid future bottlenecks in CDM AR WG • Avoids future need of consolidation of methods • Increases the quality of methodologies • BioCarbon Fund projects of similar nature • Other AR projects • Joanneum Research methodology networkftp://iefs001.joanneum.at/FTP_CDM/Username: CDM Password: reforestation