The CDM Project Activity Cycle

1. The CDM Project Activity Cycle UNFCCC CDM joint workshop 21-22 March 2003 Bonn Kai-Uwe Barani SchmidtUNFCCC/Cooperative Mechanismskschmidt@unfccc.int Franz TattenbachMember CDM Executive BoardVice Chair CDM Meth. Panel

2. 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

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

4. AE0 Design PP EB&COP/MOP DOE DOE Validation/registration DNA EB PP Monitoring DOE Verification/certification EB Issuance CER CDM project activity cycle

5. PP DOE DNA EB PP DOE EB CER Design of a CDM project activity • 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

6. PP DOE DNA EB PP DOE EB CER Validation / Registration • 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

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

8. PP DOE DNA EB PP DOE EB CER Verification – certification • 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

9. PP DOE DNA EB PP DOE EB CER Issuance • 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

10. New ideas Repository of approved methodologies PP Design/ Design/validation/ registration

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

12. 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) Information to be provided M&P: Modalities and procedures of the CDM

13. Design/ New ideas Repository of approved methodologies Submits CDM-PDD Rejects new method. PP New methodology EB OEx Two cases Rejects if not conform with validation requirements else forwards Approved method. Submits request to EB for registration 30 days comment period on validation requirements afterOEx makes CDM-PDD public UNLESS Review is requested PP to provide to OE written approval of voluntary participation by DNA of each party involved OE1 OE2 …OEn UNFCCC: Parties, stakeholders, accredited NGOs If requested within 8 weeks by either one Party involved or at least three board members. validation/ registration Design/validation/ registration Registration CDM proj. activities Project 1 Project 2 … Project n “Automatic”

14. OE1 OE2 …OEn PPcontracts CERTIFICATION report=request for issuance Issuance by EB OEx* • Assigns Ser. No • Collects SOP • Issues into registry accounts Monitoring report(s) PP Monitoring Report Verification Report Certification Report CERs VERIFICATION activities UNLESS Review is requested Monitoring data If requested within 15 days by eitherone Party involved or at least three board members. Only fraud, malfeasance or incompetence of OE! Site visits if deemednecessary by OEx Verification - certification and issuance: flow chart * An OE may be allowed by the EB to perform validation and “verification and certification” for the same CDM project activity

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

16. 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