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Realizing the Development Dividend:

Realizing the Development Dividend:. Making the CDM Work for Developing Countries Aaron Cosbey, Climate Change & Energy, IISD. Objectives of the CDM.

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Realizing the Development Dividend:

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  1. Realizing the Development Dividend: Making the CDM Work for Developing Countries Aaron Cosbey, Climate Change & Energy, IISD

  2. Objectives of the CDM To assist Parties not included in Annex I in achieving sustainable development and in contributing to the ultimate objective of the Convention. To assist Parties included in Annex I in achieving compliance with their quantified emission limitation and reduction commitments.

  3. What is the Development Dividend? • All the non-climate-related SD benefits (co-benefits) that might result from a CDM project, whether from investment, tech transfer, new production processes, or new products: • Environmental benefits (e.g., better air quality) • Economic benefits (e.g., increased employment) • Social benefits (e.g., better quality of life via energy) • To be sustainable development, need some element of all three types of benefits. • The Development Dividend Project aims to help the CDM better deliver these benefits, in large quantities.

  4. The Development Dividend Project • Phase I: analytical report • Survey of 50 stakeholders, lit review • NGOs, donors, private sector, governments • Developing and developed countries • Supported by: Norway, Denmark, Canada, IDRC, UNDP.

  5. The Analysis: Three Questions • Is the CDM shaping up to deliver sustainable development benefits? • Is the CDM shaping up to deliver enough quality projects/investment? • Is the CDM delivering investment equitably, reaching least developed countries?

  6. 1. The Quality Question

  7. 2. The Quantity Question Number of Projects Source: Ellis & Levina Annual GHG Credits Source: Ellis & Levina

  8. 2. The Quantity Question • 411 projects registered and in progress; 122 MtCO2e /yr. • Estimated demand: 217 – 640 MtCO2e/yr in 2010. • To meet that demand, with current average project size, need 849 – 2,504 projects in 1st commitment period. • Can’t assume volume will continue, or that all CERs will materialize.

  9. 3. The Equity Question Geographic Split of Expected CERs Source: Ellis & Levina

  10. EB/Project Cycle • Changing Rules • Engaging ODA, FIs • CDM Post-2012 • Defining SD in CDM Policy Options (from Phase I)

  11. Task Force of 30 Experts from various stakeholder groups - to consider theme, draft papers, help influence policy process, advance debate. • Development of three analytical papers – to delve further into three issues identified in Phase I. • Supported by Norway, Denmark, Canada, UNDP, IDRC. The Development Dividend Project - Phase II

  12. Phase II Research Papers • 3 papers completed and released prior to COP/MOP-2, where rule changes for CDM will be considered: • 1. Defining the development dividend • 2. Changing the rules of the CDM • 3. Financing the development dividend

  13. 1. Defining the Development Dividend • Will more clearly articulate what is meant by “Development Dividend”, but not as a condition. • Propose a framework for assessing its strength in specific CDM projects.

  14. 2. Changing the Rules for a Development Dividend • Will explore in depth some of the CDM rule changes suggested in the Phase I report, e.g.: • sectoral and policy-based CDM • special treatment for small-scale projects • product-based crediting • expanded role for sinks.

  15. 3. Financing the Development Dividend • Will explore the ways in which we might increase the available financing for CDM projects that yield Development Dividend. • Will assess the state of the problem, survey existing approaches and evaluate recommendations. • Role of ECAs, IFIs, Trust Funds, etc.

  16. The Development Dividend More information available at: www.iisd.org/climate/global/dividend.asp Contact: Aaron Cosbey acosbey@iisd.ca

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