CDM Criteria & Roadmap for CDM Project Development

1. CDM Criteria & Roadmap for CDM Project Development For Orientation Workshop on March 25th – 26th, 2004

2. Improvements in energy efficiency through upgrading currently employed technologies Introduction of advanced technologies that are more efficient Use of renewable energy sources wherever feasible to bring down the carbon content of the grid, to provide sustainable energy, and as a decentralised energy source at remote areas MITIGATION OPTIONS IN THE ENERGY SECTOR IDENTIFIED ARE :

3. MITIGATION POTENTIAL Source: Based on modeling exercises reported in Rana, A. and Shukla, P.R. (2001), Ghosh et al. (2001); Garg A. Shukla, P.R. (2002), and ALGAS (1998)

4. Such activities should be Approved by the Govts. of the participating Parties be host country driven May involve private / or public entity Environmental integrity is a must Economic efficiency for cost effectiveness Equity Implementation of such projects should result in social, environmental, economic and technological well-being - the four pillars of sustainable development CDM PROJECT ELIGIBILITY

5. PROJECT CONCEPTUALIZATION IDENTIFICATION AND ORGANIZATIONTARGET BENEFICIARIES AND NETWORKING PARTICIPATORY PROJECT DEVELOPMENT -identify stakeholder, position, interestexpected argument-choose appropriate technologies PROJECT CYCLE PROJECT FUND SOURCING / FINANCING PROJECT PLANNING -integrating sustainable development goals of the region / site specific PROJECT IMPLEMENTATION -an agreed time frame -an agreed monitoring and verification arrangement; the organization to monitor-establish emission baseline PERIODIC MONITORING AND EVALUATION-emission reduction

6. CDM PROJECT CYCLE Implementing Agencies Project Idea Note (PIN) / Project Concept Note (PCN) PD/CCC Baseline & Additionality M&V Plan EIA St. Consul Contracts DNA; Investor Host / Investor approval PDD PD/CCC Validation OE Participation EIA Baseline & ER M&V Plan EB Registration Financing & Implementation PD On-site Inspection Review Monitoring GHG Reductions Verification Report Monitoring PD Verification Certification OE EB 6

7. Participation is voluntary, approved by each party involved Additional to any that would occur in the absence of certified project activity Project fulfills the criteria of financial additionality Reduction of emissions should be real, measurable and should have long time benefits Project should contribute to the sustainable development of the host country CDM PROJECTSSome Important Aspects

8. CDM PROJECT CYCLE Implementing Agencies Project Idea Note (PIN) / Project Concept Note (PCN) PD/CCC DNA; Investor Host / Investor approval

9. Name of the project Ownership details of project sponsors Project Description Status of Project Clearances Financing details of the projects Total CDM contribution sought IRR and DSCR with & without CDM revenue Estimate of GHG abetment Sustainable development criteria Project Risks PIN/PCN

10. CDM PROJECT CYCLE Implementing Agencies Project Idea Note (PIN) / Project Concept Note (PCN) PD/CCC Baseline & Additionality M&V Plan EIA St. Consul Contracts DNA; Investor Host / Investor approval PDD PD/CCC

11. Project Description Promoter Details Baseline Additionality Sustainable Development Criteria Monitoring Plan Financial Status PROJECT DESIGN DOCUMENT

12. CDM PROJECT CYCLE Implementing Agencies Project Idea Note (PIN) / Project Concept Note (PCN) PD/CCC Baseline & Additionality M&V Plan EIA St. Consul Contracts DNA; Investor Host / Investor approval PDD PD/CCC Validation OE Participation EIA Baseline & ER M&V Plan EB Registration

13. Validation of CDM Projects Validation is a process of independent evaluation of a project activity by a designated Operational Entity (OE) against the requirements of the CDM on the basis of the PDD. Registration Registration is the formal acceptance of a validated project as a CDM project by the Executive Board. Registration is the prerequisite for verification, certification and issuance of the CERs

14. CDM PROJECT CYCLE Implementing Agencies Project Idea Note (PIN) / Project Concept Note (PCN) PD/CCC Baseline & Additionality M&V Plan EIA St. Consul Contracts DNA; Investor Host / Investor approval PDD PD/CCC Validation OE Participation EIA Baseline & ER M&V Plan EB Registration Financing & Implementation PD Monitoring PD

15. Project Participants, as part of the PDD provide a monitoring plan: Based on previously approved methodology/new methodology Determined by DoE as appropriate to circumstances of the project activity Reflects good monitoring practice A monitoring report in accordance with monitoring plan is to be submitted to the DoE for verification MONITORING

16. CDM PROJECT CYCLE Implementing Agencies Project Idea Note (PIN) / Project Concept Note (PCN) PD/CCC Baseline & Additionality M&V Plan EIA St. Consul Contracts DNA; Investor Host / Investor approval PDD PD/CCC Validation OE Participation EIA Baseline & ER M&V Plan EB Registration Financing & Implementation PD On-site Inspection Review Monitoring GHG Reductions Verification Report Monitoring PD Verification Certification OE EB

17. Verification Verification is the periodic independent review and determination by DoE of the monitored reductions by sources of greenhouse gases that have occurred as a result of the CDM project activity Certification Certification is the written assurance by the DoE that the project activity achieved the reductions in anthropogenic emissions by sources of GHGs as verified

18. Certification Report constitutes request to EB for issuance of CERs equal to verified amount of reductions of GHGs ISSUANCE OF CERTIFIED EMISSION REDUCTIONS

19. MINIMUM TRANSACTION COST ASSOCIATED WITH CDM PROJECT CYCLE(from literature survey)

20. Effective way to reduce transaction costs Several projects bundled together to share transaction costs and CER benefits Projects should have: Similar technology Be in the same geographical area Preferably have the same project owner, but not necessary Bundling

21. Thank You

23. Validation is the process of independent evaluation of a project activity by a DOE against requirements of CDM in Article 12 of the Kyoto Protocol and on the basis of the project design document Verification is the periodic review and ex-post determination by a DOE of the monitored reductions in anthropogenic emissions by sources of greenhouse gases that have occurred as a result of a registered CDM project during the verification period Certification is the written assurance by the DOE that during a specified time period, a project activity achieved the reductions in anthropogenic emissions Validation, Verification and Certification of CDM Projects

24. Development Alternatives as a Designated Operational Entity ParticipationRequirements AnalysisEnvironmentalImpact Validation & Registration Reduction in GHG emissions through a baseline as determined by project participants Validation of Monitoring Plan submitted by Project Participants Finally the validation of the Project activity by the OE and sends validation report to EB for registration Validate Verify, Certify SD Goal achievement DESIGNATED OPERATIONAL ENTITY Periodic review and expert determination of the monitored reductions in GHGs Conduct on-site inspection Verification & Certification Review monitoring results Determine the GHG reductions Provide verification results to project participants, the Parties involved and the EB, and make publicly available Based on its verification results, certify CERS

25. Project participants are required to include as part of the Project Design Document (PDD) a monitoring plan that provides for : Collection and archiving of all relevant data necessary for estimating or measuring anthropogenic emissions by sources of GHGs occuring within the project boundary during the crediting period. Collection and archiving of all relevant data necessary for determining the baseline of anthropogenic emissions by sources of GHGs within the project boundary during the crediting period. Monitoring

26. Identification of all potential sources of, and the collection and archiving of data on, increased anthropogenic emissions by sources of GHGs outside the project boundary that are significant and reasonably attributable to the project activity during the crediting period. Collection and archiving of information on the analysis of the environmental impact. If there impacts are considered significant by the project participants or the host Party environment impact assessment is to be undertaken in accordance with procedures by the host Party.

27. Quality assurance and control procedures for the monitoring process. Procedures for the periodic calculation of the reductions of anthropogenic emissions by sources by the proposed CDM project activity and for leakage effects. A paper documentation Monitoring

28. A monitoring plan shall be based on a previously approved monitoring methodology Determined by DOE as appropriate to the circumstances of the proposed activity and has been successfully applied elsewhere Reflects good monitoring practice appropriate to the type of project activity For small scale CDM project activities, simplified modalites may be followed. Monitoring

29. Based on the monitoring and reporting of reductrions in anthropogenic emissions, CERs resulting from a CDM project activity will be calculated applying registered methodology by sustainable the actual anthropogenic emissions by sources from baseline emissions and adjusting for leakage. Monitoring

30. Criteria that must be met by a CDM project for CERs • Participation should be voluntary and approved by each Party involved • Project should be certified by competent authority • Emission reductions : - real - measurable - provide long term benefits to the mitigation of Climate Change • Emission reduction should be additional to any that would occur in the absence of the certified project activity 2

31. Elements of a CDM Project proposal 1. Briefly describe proposed project • objective of the project • technologies involved - current status in India - current status in the world • approach to be pursued (i.e, emission avoidance, reduction or sequestration • target group - existing industrial uses • potential partners (including third party validators and verifiers if possible) • project feasibility, technology transfer, specific performance or design standards for transferred technologies • typical application of the project in the country 3

32. Elements (Contd..) 2. Discuss barriers to the project (i.e. why has the project not been undertaken previously),and how the project proposes to surmount these barriers (e.g., the CDM will provide additional financing not previously available) 4

33. Elements (contd..) 3. Project implementation plans in phases - work plan - monitoring and evaluation plan - certification of ERs 4. Quantify the ghgs reduction to be achieved through the project - develop a project reference case or baseline that accounts for what would have happened at the project site without the proposed project activities - identify ghg sources and sinks at the site included in the emission baseline / reference and - describe all measures to be` taken as part of the project to avoid, reduce or sequester ghg emissions - quantify the emission reductions to be achieved through each such measure and for the project as a whole 5

34. Elements (Contd..) 5. Workout project economic costs and benefits - economic cost of the project - economic benefit of the project - cost benefit ratio - customer benefits - host partner benefits - investing partner benefits 6

35. Elements (Contd..) 6. Workout other benefits of the project : - sustainable developments and other benefits to the host country - social benefits - economic benefits - environmental benefits - global - local 7

36. Elements (Contd..) 7. Estimate the cost per metric tonne of ghg avoided, reduced or sequestered - provide other informations relevant to cost such as anticipated pay-back period on investment 8

37. Elements (Contd..) 8. Identify any potential sources of leakage (i.e. activities not directly related to the project that could result in loss or reversal of accrued ghg benefits) and describe steps to be taken to reduce the risk of such potential leakage 9

38. Elements (Contd..) 9. Provide a description of how the project could contribute to the advancement of scientific knowledge especially regarding options to mitigate climate change 10

39. Elements (Contd..) 10. Highlight innovations / unique approaches incorporated in the proposal 11. Discuss the replicability and transferability potential of the project 12. Discuss other benefits 11