Good COP, BAD COP – Mexico 2010

Present and future of CDM
by -- December 1st, 2010

On the opinions and perspectives expressed about the Clean Development Mechanism

Certainly a controversial matter here at COP 16. The development of CDM projects has had limited success achieving the implementation of less than 2500 projects with approximately 2 billion tons of certified GHG emission reductions during the 2004-2010 period. This reduction is equivalent approximately 8% of the European Union emissions over that same period, or 1% of the world emissions.

The hurdles that have hampered a greater scale implementation of CDMs are high transaction costs, massive delays and environmental integrity questioning due to the challenge of proving real emission reduction additionality. These hurdles have also resulted in the implementation of CDMs to be concentrated in few countries such as China, India and Brazil. This means weak benefits for the least developed countries. At the same time due to the complexity and characteristics of the process certain areas of implementation such as energy efficiency and/or transportation have been generally left out of the mechanism.

According to Pedro Martins Barata, member of the CDM Executive Board (EB) to expand the CDM in order for this mechanism to represent a meaningful contribution in achieving a below 2oC target expressed at the Copenhagen Accord, there is a need to fundamentally change the regime towards more standardization on the establishment of additionality and baselines. According to Steven Gray from the Carbon Markets and Investor Association this improvements could allow to reduce and remove transaction barriers and increase regional distribution. At the same time, to address the concentration of CDM projects in a few countries, the EB has issued a proposal to the COP on the operation of loans disbursment for financing the CDM at countries with less than 10 CDM registered projects.

Perspectives Climate Change, a company of Point Carbon, is launching a program to test this approach and create a 9 case applied study in different countries to evaluate the effects of this approach. DNA or designated national authorities interested in being part of this study are encouraged to contact Perspectives. (www.perspectives.cc)

Despite of these continuous efforts to improve the result of the CDM mechanism, the current international situation and the lack of clarity in the future of the Kyoto Protocol creates an uncertain panorama for the growth and scaling of CDM projects and its associated emission reductions.

For background information on what CDMs are and a description of the process see the following documents

http://www.undp.org/energy/docs/cdmchapter1.pdf

http://www.undp.org/energy/docs/cdmchapter2.pdf

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