Presented by: Neeta Hooda UNFCCC Secretariat

1. Clean Development Mechanism Appraisal of CDM standards and issues for GHG agricultural mitigation Presented at: Conservation Agriculture Carbon Offset Consultation, West Lafayette, USA Presented by:Neeta Hooda UNFCCC Secretariat

2. Overview • What is CDM? • How far we’ve come? • CDM design features • Scope & Governance • Additionality • Status of CDM agriculture sector projects • Future Efforts • Concluding messages

3. Clean Development Mechanism-Objective • Described in Article 12 of KP • Projects in developing countries can earn saleable credits for reducing/avoiding emissions – certified emission reductions (CERs) • The CERs can be used by countries with commitments under KP toward meeting a part of their targets • Host countries benefit from sustainable development initiatives • Project have global reach • Result in real, measurable, verifiable, additional emission reductions

4. CDM project cycle Regulated mechanism overseen by Executive Board assisted by Panels Working groups Registration and issuance teams UNFCCC secretariat Emission reductions: RealMeasurableVerifiableAdditional CER issuance EB Verification/certificationDOE Monitoring PPs Validation: DOEs Registration: Executive Board Project design: Project participants

5. How far we have come? > 3,000 projects (including registered projects)> 2.7 billion CERs expected to the end of 2012 In pipeline: 1,178 registered CDM projects1.29 billion CERs expected from existing registered projects to the end of 2012 To date: (assumption: no extension of crediting periods) Map and statistics accessible at http://cdm.unfccc.int/ Status: 10 October 2008

6. How far we have come? • CDM the largest CO2 offset system in the world • 1,178 registered projects to date • Over 3000 projects in addition in the pipeline • 49 countries • 195,851,137 CERs issued (certified emission reductions) • 2.7 billion CERs expected to end of 2012 Status: 7 August 2008

7. How far we’ve come|Investment and financial flows Real investment to fulfill twin purposes of the CDM • Assisting non-Annex I in achieving sustainable development and contributing to the Convention objective • Assisting Annex I Parties in complying with their targets • USD 25 billion in capital investment estimated for projects entering the CDM pipeline in 2006 alone (double the GEF-leveraged climate change investment over 10 years) • USD 5.7 billion in capital investment expected from CDM renewable and energy efficiency projects registered in 2006 (about triple the ODA support and equivalent to private investment in the renewable energy and energy efficiency fields in these same countries)

8. CDM design|Governance CDM governance balances authority and practicality Work and responsibility is distributed • DOEs validate projects, request registration, verify/certify emission reductions and request issuance • DOEs decide on registration and issuance (EB review may change it) But work occurs under central supervision of the Executive Board • Accredits DOEs against standards • Approves methodologies for baselines and monitoring • Can review requests for registration of projects and issuance of CERs • Establishes expert panels to formulate recommendations • Supported by the secretariat EB accountable to and guided by the CMP

9. CDM design|Original challenges • Ensuring environmental integrity • Cost effectiveness • Avoiding perverse incentives of seller and buyer to overstate emission reductions • Choosing a top down or bottom-up approach • Ensuring transparency and allowing public scrutiny • Keeping process times reasonable • Centralized versus distributed structure

10. CDM design|Additionality Challenging exercise to define globally working standardized methods (competing views and methods) at operational level which describe a counterfactual situation in relation to a project activity • Kyoto states that emission reductions are to be “additional” relative to a what would have happened in the absence of the project activity • CMP provides guidance on what approaches can be taken (=subset of many choices) To address this challenge, the process under CDM for addressing additionality as well as setting and selecting methodologies is designed to receive input by all stakeholders (project operator (orginator of proposal), public, Parties, expert panel) before EB approves

11. Status of the CDM| Registered projects, by project type Status: 10 October 2008 * Note that a project activity can be linked to more than one sectoral scope

12. CDM | Agriculture sector projects Project types: • Animal Waste Management Systems GHG mitigation projects (AM006) • GHG Capture and combustion from swine manure management systems (AM0016) • Biomass electricity Generation projects (AMS I.D and AMS III.E) • Biogas recovery and heat generation from palm oil mill effluent plants (AMS. I.C and AMS III.H)

13. CDM | Agriculture sector scope • Some activities such as AWMS have seen successful projects in CDM. • Other activities not so successful despite the existing potential. For example IPCC Fourth AR lists the following: • Soil carbon sequestration (enhanced sinks) is the mechanism responsible for most of the mitigation potential (high agreement,much evidence), with an estimated 89% contribution to the technical potential. • The role of alternative strategies changes across the range of prices for carbon. • Despite significant technical potential for mitigation in agriculture, there is evidence that little progress has been made in the implementation of mitigation measures at the global scale. • Conservation tillage and zero-tillage are increasingly being adopted, thus reducing the use of energy and often increasing carbon storage in soils. According to FAO (2001), the worldwide area under zero-tillage in 1999 was approximately 50 Mha, representing 3.5% of total arable land. However, such practices are frequently combined with periodical tillage, thus making the assessment of the GHG balance highly uncertain.

14. CDM | Agriculture sector Challenges: • Uncertainity of net effect: • “Since soil disturbance tends to stimulate soil carbon losses through enhanced decomposition and erosion (Madari et al., 2005), reduced- or no-till agriculture often results in soil carbon gain, but not always (West and Post, 2002; Ogle et al., 2005; Gregorich et al., 2005; Alvarez 2005). • Adopting reduced-or no-till may also affect N2O, emissions but the net effects are inconsistent and not well-quantified globally (Smith and Conen, 2004; Helgason et al., 2005; Li et al., 2005; Cassman et al., 2003). The effect of reduced tillage on N2O emissions may depend on soil and climatic conditions. In some areas, reduced tillage promotes N2O emissions, while elsewhere it may reduce emissions or have no measurable influence (Marland et al., 2001).” • Rigorous Monitoring; Costs, frequency in relation to magnitude of emission reductions. • Fulfilling the CDM criteria that emission reductions should be real, measurable and verifiable ... hence not all activities permissible in first committment period

15. Future Efforts | Agriculture sector potential • IPCC Fourth assessment Report: Recognizes the potential for agricultural sector activities in mitigation • Agriculture makes up10-12% of total global anthropogenic emissions of greenhouse gases (GHGs). • options are improved crop and grazing land management (e.g., improved agronomic practices, nutrient use, tillage, and residue management), restoration of organic soils that are drained for crop production and restoration of degraded lands. • To a lesser extent mitigation is possible with improved water and rice management; set-asides, land use change (e.g., conversion of cropland to grassland) and agro-forestry; as well as improved livestock and manure management. • Parties emphasised on ‘agriculture sector’ in ongoing negotiations • workshop on ‘Challenges and Opportunities for Mitigation in the Agriculture Sector’ in 2009 • CMP requested that EB enhance methodologies in agriculture sector, energy efficiency and forestry • Develop synergies: science and enabling environment

16. Concluding messages • Agriculture sector projects have the potential • Maybe start with simpler ones first and create awareness on measurement and monitoring techniques, finance etc. • CDM balances many complex and sometimes contradictory needs - Environmental integrity - Cost effectiveness/simplification - Distributed operational decisions - Consistency - Input/feedback loops - Minimization of process times - Transparency • Even in this stage, CDM is already a major force to - trigger private sector investment - finance additional emission reductions - provide assistance to achieving non-Annex I sustainable development

17. CDM scaling up | Programme of activities Programme of activities is Voluntary coordinated action by a private or public entity which coordinates and implements any policy/measure or stated goal ... which leads to GHG emission reductions or increase in net GHG removals by sinks that are additional to any that would occur in the absence of the PoA, via an unlimited number of CDM project activities, perhaps over a large area (e.g. town, state, region)

18. Thank you Information cdm.unfccc.int CDM Bazaar http://www.cdmbazaar.net/ Catalogue of decisions (test): http://test.cdmis.net/catalogue-test