Does the project remove CO2 or other GHGs from the atmosphere?

1. Screen 1: General eligibility for CDM Case Study: Okilu Hydro Project China START Does project reduce, prevent or mitigate the release of 1 or more of the Kyoto gases [See appendix 3]? Project not relevant Does the project remove CO2 or other GHGs from the atmosphere? NO NO D YES YES Are reductions based on avoided deforestation?  go to sequestration page YES X B2.2 NO Project not eligible Are reductions based on nuclear power, decrease in production or force majeure [1]? YES D NO Does project contravene or work against other international, regional or national treaties [2]? YES Project unlikely to be approved D (WCD) NO Project unlikely to be eligible – see note [4]. Have project activities already started [3]? YES D B6.1 NO Project not eligible for some buyers & unattractive to MDG Carbon Does the donor provide clear documentation that they do not have, and will not make any claim to the emission reductions? D Is Official Development Aid (ODA) used in implementation of the project [5]? YES NO B3.2 NO YES B Usage of this finance (& all project financing) will require very clear & careful analysis & tracking to ensure it is not used in contravention of the Kyoto Protocol or the donor’s documented intent. Continue screening Are loans concessional and/or underwritten by ODA? Is loan finance used in any of the parts listed in [5]? Are any loans provided by International Finance Institutions [6]? YES YES YES B3.2 NO NO NO Are any grants included in the project financing for tasks other than those listed in [7] Does grant include ODA or IFI loan underpinned by ODA? YES YES B3.2 NO NO A A

2. Screen 2: Host country eligibility and approval of projects for CDM START Project not eligible for CDM in this country Is project in an Annex I country (see Appendix 2 for list of countries)? Is the project in an Annex II country (see Appendix 2 for list of country)? YES YES D B1.2 NO NO Project is not eligible for CDM but may be eligible for JI D Has the host country ratified the Kyoto Protocol [See Appendix 2 for list of countries]? Unlikely CDM project will be successful in this country Is ratification planned to be completed by 1/1/2008? NO D NO D1.1 YES YES NO Does host country have an operating DNA [1]; [See Appendix 2]? Is a DNA in the process of being established now? NO C Unlikely project will be approved soon enough to be viable YES YES Will DNA be functional for approval before 1/1/2008? C NO YES DNA high risk of being impediment to project development Is the DNA likely to be able to operate effectively by 1/1/2008 [2]? Does the DNA currently operate effectively [2]? NO C NO ? (yes) YES YES Need to work with host government to build DNA capacity B Will the project likely satisfy the stated host country sustainable development policies and/or is host government actively supportive of project type? Is project type likely to be accepted/incorporated into host governments sustainable development policies? Project will not achieve DNA approval NO D NO A2.1 & D1.2 YES YES Need to work to make project attractive to host government’s SD policies C UNKNOWN A B Consult with host government on sustainable development policies

3. Screen 3: Additionality B2.2 & C1.1 START Can it be clearly demonstrated that non-compliance with these laws is widespread? Is the project required by federal, state or municipal legislation or regulation? D YES NO Not eligible NO YES Were these policies implemented after 11 December 1997? Is overcoming this policy an important part of showing additionality? Are there relevant national or regional sectoral policies that give comparative advantage to higher emitting technologies (E+) [1]? YES YES YES Unlikely to be additional C ? Policy to promote coal? Baseline establishment and additionality cannot include these policies NO NO NO B Were these policies implemented after 11 November 2001? Is excluding this policy an important part of showing additionality? Are there relevant national or regional sectoral policies that give comparative advantage to lower emitting technologies (E-) [2]? Unlikely to be additional YES NO YES C C1.1 Baseline establishment and additionality cannot exclude these policies NO NO B YES Are there other barriers to project implementation [4]? Is the project the least cost option [3]? Unlikely to be eligible YES NO D ? ? NO YES Can project conservatively and transparently demonstrate barriers? Unlikely to be eligible YES NO OR UNKNOWN D ? C1.1 Are there particular circumstances for this project that can clearly show why this project is different to local conditions? Is project common practice in the region? Is the project common practice in the country? YES Not eligible YES NO D ? Y or N? NO NO YES Can project clearly demonstrate differences between national and local conditions, and that the project is not common practice locally? Significant risk this project will be rejected unless particulars of the project are clearly unique - B C YES Can project clearly show this? YES NO NO A B A Need to demonstrate that the project is not common practice

4. Screen 4: Baselines START Identification of sources is required before assessment of project viability can be made Has the project identified relevant sources of emissions in the project [1]? Assumed zero NO B YES Identification of a baseline scenario is required before assessment of project viability can be made Has the project determined a credible baseline scenario (ie an objectively reasonable description of what would happen in the absence of the project)? NO B B4.2 (offset grid – in AM0002) YES Identification of baseline sources is required before assessment of project viability can be made Has the project identified relevant sources of emissions in the baseline [1]? NO B B5.1? YES Any further delay in methodology approval will seriously threaten project viability Has the project identified an Approved Methodology that is applicable? (see Appendix 4) Is an applicable methodology confidently expected to be approved before 1 June 2007? NO NO C B4.2 YES YES Reliable data can be difficult to attain, and this may prove a significant obstacle to baseline approval Does the project have relevant historical, market &/or sectoral data required for the baseline? Is the required baseline data easily and cheaply attainable [2] ? NO NO C B5.1 YES YES Project should attain this data before committing extensive resources B Can emissions be monitored and verified using data generated from measurements of project fundamentals [3]? Are monitoring devices specifically for emissions available cheaply “off-the-shelf” in the host country [3]? Can project &/or location specific monitoring devices be developed and implemented at reasonable cost and time [4]? Costs of monitoring may be higher than income created. NO NO NO C Y – MWh delivered to grid YES YES YES B A Costs of monitoring will need to be carefully examined & strictly controlled

5. Screen 5: Ownership & Stakeholder engagement START Not possible to assess project viability without further site specific information Is project a generic, national approach/strategy that does not apply to a particular site [1]? Has the project selected a particular site/region for implementation? B NO NO B1.4 YES YES Ownership can be an intractable issue & should be addressed before any significant project investment C Has the project identified & documented ownership of emission reductions? Are there comparable projects that set a precedent of ownership for the project? NO NO Project should confirm ownership using precedent as soon as possible. A2.2 B YES YES Competing ownership claims can quickly ruin a project. This should be addressed before any significant investment. C Are there, or could there be, competing ownership claims? Have potential claimants (including governments) waived ownership claims? Are there comparable projects that set a precedent for resolving competing ownership claims for the project? YES NO A2.2 NO NO YES YES Ensure the precedent is applicable & confirm undisputed ownership of ERs B Does project have reliable up to date information from recent feasibility studies? NO This will be necessary to determine implementation times and stakeholder engagements B B6.1 YES Does project have reliable information from local sources to indicate stakeholders views on the project [2]? Stakeholder support is essential for registration Has initial stakeholder consultation been undertaken? NO NO - B C A2.1? A2.1 & A2.3 YES YES Can stakeholder concerns be reasonably addressed with changes to project and/or other measures? Project will not be eligible without stakeholder support Are stakeholders supportive of the project? NO NO - C D B6.1 YES Adjust or redesign project to address concerns YES B A

6. Screen 6: Implementation time and emission reductions START Can project be implemented by 1/1/2008 [1]? Can project be implemented by 1/1/2009? Can project be implemented by 1/1/2010? Project only likely to be viable with functional voluntary market and/or post-2012 policy certainty NO NO NO - C D ?B6.1? ‘about in 2008’ YES YES YES Are average project emission reductions > 25 ktCO2e/year? Project only likely to be viable with functional voluntary market and/or post-2012 policy certainty NO D YES Any time delay or delivery failure likely to result in project failure unless post 2012 or voluntary market established C B5.1 Are average project emission reductions > 25 ktCO2e/year? Are average project emission reductions 5 -25 tCO2e/year? Project only likely to be viable with functional voluntary market and/or post-2012 policy certainty NO NO D YES YES Any time delay or delivery failure likely to result in project failure unless post 2012 or voluntary market established C Any time delay may imperil project viability B B5.1 Are average project emission reductions > 25 ktCO2e/year? Are average project emission reductions 5-25 ktCO2e/year? Are average project emission reductions 1 – 5 ktCO2e/year? NO NO NO D Not viable YES YES YES A B C Delivery failure may imperil project viability Any time delay or delivery failure likely to result in project failure unless post 2012 or voluntary market established