Grant A. Kirkman Team Leader - Methodologies Sustainable Development Mechanisms

1. Current status of Post-2012 discussions and the status of the Clean Development Mechanism Roundtable on Corporate Strategies in Response to Climate Change World Environment Center Augsburg, 24–25 October, 2007 Grant A. Kirkman Team Leader - Methodologies Sustainable Development Mechanisms UNFCCC secretariat http://unfccc.int

2. Responding to the science | Political imperative • The scientific advice is unequivocal, providing a strong foundation for policy • The world is looking to the UN Climate Change Conference in Bali to deliver a political response to the science • Bali can launch an intensive global effort to design and agree on a post-2012 agreement, which prevents the worst projections of the IPCC from becoming a reality

3. The international dimension | A global undertaking • Central role of the UNFCCC • Full mobilisation of the international system required • International public-private partnerships • National action central but national governments acting alone will not manage • Coping with impacts, vulnerability and adaptation calls for global solidarity

4. Current situation | Building momentum for action • Unparalleled attention at the highest level • Problem accepted => search for solutions • The economics and the consequence of investment decisions better understood • Business ready to act, seeking clarity on policy directions • Dynamic national climate change policy developments • International climate change policy at a turning point • Continued lack of trust among governments

5. Analysing strategic approaches | Informal • Governments have concluded a two-year informal dialogue process on long-term cooperative action to address climate change • Report of co-facilitators of this process feeds into the Bali Conference • This has build trust among governments and provided channels for inputs

6. The two-track approach | Launched in Montreal 2005 Convention Dialogue: Analysis of strategic approaches Development goals Adaptation Technology Potential of markets Positive incentives for voluntary action by developing countries Appropriate national and international response Financing Kyoto Ad-hoc Working Group Mitigation potential and range of mitigation objectives Means to achieve objectives Consideration of further commitments Informal process Formal negotiations

7. Findings of the Dialogue | Increased understanding • Shared goals and principles • Building blocks • Mitigation • Adaptation • Technology • Investment and finance • Options for further work

8. Findings of the Dialogue | Layers Global action guided by shared goals and principles Sustainable development objectives and national circumstances Investment and Finance Mitigation Adaptation Technology

9. Building blocks of an effective response| Mitigation • Mitigation • Nature and content of commitments (including types and levels of emission limits) • Frameworks for voluntary national mitigation action programmes and incentives for developing countries • Deforestation and land use • Sectoral approaches

10. Building blocks of an effective response| Adaptation • Adaptation • Impact, vulnerability and adaptation assessments • National planning and decision-making • Access to and availability of finance

11. Building blocks of an effective response| Technology • Technology for adaptation and mitigation • Deployment and diffusion of existing technologies • Research, development and demonstration of new technologies

12. Building blocks of an effective response| Finance • Finance and investment • Shifting private investment • Market-based mechanisms • Public finance

13. Breakthrough in Bali | What would constitute a success? • Common understanding of the required building blocks (not agreement on the specifics) • Decision to negotiate a comprehensive post-2012 agreement • Establishment of a negotiating process with clear tasks • Agreement on a timeframe (2009-2010)

14. Building the regime | Intensive design process • Nature and content of commitments • International and national adaptation response • Market-based mechanisms • Frameworks for voluntary national mitigation action programmes • Sectoral efforts • Major technology initiatives • Deforestation and land use

15. What is the CDM?| Design Industrialized countries (Annex I) • To assist in meeting their emission limitation commitments Investors Projectparticipants CDM project activity (private business, governments, NGOs) (private business, governments, NGOs) Developing countries (Non-Annex I) • To assist in achieving sustainable development

16. CDM | Characteristics • Market mechanism offering developing country (non-Annex I) opportunities to participate in the carbon market • Participation is voluntary and both public and private entities can participate • Lowest marginal cost of abatement • Ensures sustainable development (as defined by the host country) • Projects or programs must result in real, measurable and long-term greenhouse gas (GHG) emission reductions • Additional to any E.R’s that would occur in the absence of the project • An international supervisory and standards setting body (CDM EB) • Is open to regulatory and stakeholder scrutiny, at all times • Employs bottom-up, re-use and broad application principles for standards • Offers o low cost option (SSC) • Offer a large scale option (A/R and non-A/R) • Offers a multi-project option (PoA and bundling) • A global currency (CERs) with a strong SD and ToT spin-offs

17. CDM|Regulatory and support system COP/MOP approves supports elects supervises accredits supports recommends EB MP AP DOE RIT UNFCCC secretariat A/RWG SSCWG

18. Status of the CDM|Measuring success Status: October 2007

19. CDM | Key project data * assuming all project activities simultaneously deliver their expected annual average emission reductions and there are no renewals of crediting periods Status: October 2007

20. CDM | Key date on methodology standards Status: October 2007

21. CDM | Registration procedure PPs/DOEs Conduct validation, submit F-CDM-REG Submit initial comments If no review is requested, project activity is registered 4 or 8 weeks after request for registration Complete? Fee paid? Secretariat Publish request for registration, assign RIT Project Activity REGISTERED Request for review published Secretariat’s completeness check includes check of documentation versioning, cross-checking, use of disclosure formulation, use of English, and appropriateness of Parties’ approval NO See Review Procedures Examine submissions DNA Reviewnecessary? YES CDM EB Examine Submissions/ RIT appraisal Consider review case at next EB meeting A review will be considered if one request for review is submitted by a DNA involved, or three requests for review are submitted by EB Members Reference Registration procedure Decision 3/CMP.1, paras. 35-42 Registration/ SOP fee Decision 7/CMP.1, para. 37 Terms of reference, EB-RIT EB 29 report, Annex 14 • Registration-related guidance and procedures: • http://cdm.unfccc.int/Reference/Procedures • http://cdm.unfccc.int/Reference/Guidclarif

22. CDM | Methodology procedure possible in-meeting real-time written dialogue with PPs 3rd possible written dialogue with PPs 2nd possible written dialogue with PPs 1st possible written dialogue with PPs Draft Recomm & Reformat Refor- matted meth. MP or A/R WG meeting 2 x Desk reviews 1 Completeness check Enhanced pre-assessment Lead + 3 members PP via the DOE 2 desk reviewers Secretariat 2 One MP member Secretariat Prelim A C Not accepted A Approved AM00XX Reformatted Meth & recomm. Reformatted Meth & final recomm. Redrafted Meth & Final recomm. C Executive Board PP via the DOE Not approved MP/WG to revise recommendation Only 1 feedback loop possible Only final rec. is submitted to the EB

24. CDM | Useful links CDM Bazaar:http://www.cdmbazaar.netCatalogue of EB Decisions (beta):http://test.cdmis.net/catalogue-testDr. Grant A. KirkmanTeam Leader - methodologiesSustainable Development Mechanisms - programmeUnited Nations Framework Convention on Climate Change - secretariatMartin-Luther-King-Str, 8 D-53175 Bonn, GermanyTel. +49 0228 815 1363Fax. +49 0228 815 1999Mobile: +49 173 216 6342gkirkman@unfccc.int http://www.unfccc.int

25. CDM | Concept Additionality • Investment barrier - availability of a financially more viable alternative that would have led to higher emissions • Technological barrier - existence of a less technologically advanced alternative that involves lower risks due to the performance uncertainty or low market share of the new technology adopted for the project activity and so would have led to higher emissions • Common practice barrier - prevailing practice or existing regulatory or policy requirements would have led to implementation of a technology with higher emissions Project participants have to demonstrate to a validator that the project activity would otherwise not be implemented due to the existence of one or more barriers