Certified Emission Reduction

From Wikipedia, the free encyclopedia Certified Emission Reductions (CERs) are a type of emissions unit (or carbon credits) issued by the Clean Development Mechanism (CDM) Executive Board for emission reductions achieved by CDM projects and verified by a DOE under the rules of the Kyoto Protocol. CERs can be used by Annex 1 countries in order to comply with their emission limitation targets or by operators of installations covered by the European Union Emission Trading Scheme (EU ETS) in order to comply with their obligations to surrender EU Allowances, CERs or Emission Reduction Units (ERUs) for the CO2 emissions of their installations. CERs can be held by governmental and private entities on electronic accounts with the UN. CERs can be purchased from the primary market (purchased from original party that makes the reduction) or secondary market (resold from a marketplace). At present, most of the approved CERs are recorded in CDM Registry accounts only. It is only when the CER is actually sitting in an operator's trading account that its value can be monetized through being traded. The UNFCCC's International Transaction Log has already validated and transferred CERs into the accounts of some national climate registries, although European operators are waiting for the European Commission to facilitate the transfer of their units into the registries of their Member States. Temporary CERs and Long CERs are special types of CERs issued for forestry projects. They are two ways of accounting for non-permanence in forestry CDM project activities. Temporary CER or tCER is a CER issued for an afforestation or reforestation project activity under the CDM which expires at the end of the commitment period following the one during which it was issued. Long-term CER or lCER is a CER issued for an afforestation or reforestation project activity which expires at the end of its crediting period.

Carbon Emission Reduction Target

From Wikipedia, the free encyclopedia

The Carbon Emission Reduction Target (CERT) in the United Kingdom (formerly the Energy Efficiency Commitment) is a target imposed on the gas and electricity transporters and suppliers under Section 33BC of the Gas Act 1986 and Section 41A of the Electricity Act 1989, as modified by the Climate Change and Sustainable Energy Act 2006[1] The original Energy Efficiency Commitment 1 (2002-2005) program required that all electricity and gas suppliers with 15,000 or more domestic customers must achieve a combined energy saving of 62 TWh (Trillion Watt per hour) by 2005 by assisting their customers to take energy-efficiency measures in their homes: suppliers had to achieve at least half of their energy savings in households on income-related benefits and tax credits. In the second phase of the Energy Efficiency Commitment (2005-2008) scheme, energy saving targets were raised to 130 TWh suppliers, and here suppliers with at least 50,000 domestic customers (including affiliated licenses) were eligible for an obligation. The third phase of CERT (previously known as Energy Efficiency Commitment 3) originally ran from 2008 to 2011 and increased the previous targets to 154 MtC. A consultation document was published alongside the 2007 Energy White Paper, and responses were invited by August 15, 2007. The new scheme is regulated by Electricity and Gas (Carbon Emissions Reduction) Order 2008 (S.I. 2008/188). In 2009 the UK Government increased the emission reduction target by a further 20% to 185 MtC. In 2010 the Government increased the target to

293 MtC, to be achieved over an extended period running until the end of 2012 (see The Electricity and Gas (Carbon Emissions Reduction) (Amendment) Order 2010: S.I.2010/1958). From 2013 CERT will be superseded by the Energy Company Obligation (ECO)

Certified Emission Reductions

Certified Emission Reduction (CERs) are the tradeable units of the CDM. CERs are defined as follows: A "certified emission reduction" or "CER" is a unit representing one tonne of carbon dioxideequivalent (CO2-e) sequestered or abated, using global warming potentials. CERs are issued to project participants in CDM projects pursuant to Article 12 of the Kyoto Protocol and the CDM modalities and procedures. CERs can be used by Annex I Parties to meet their emissions targets, and can be added to a Party's overall quantified emission limitation and reduction commitment. Each CER has unique identifying information: Each CER shall have a unique serial number comprising the following elements:
1. The commitment period for which the CER is issued; 2. The Party which hosted the CDM project activity, using the two-letter country code defined by ISO 3166; 3. The type of unit (i.e. identifying it as a CER); 4. A unit number that is unique to the CER for the identified commitment period and Party of origin; and 5. A project identifier that is unique to the CDM project activity for the Party of origin.

Each CER shall be held in only one account in one registry at a given time.

tCERs and lCERs

tCERs and lCERs are defined: "Temporary CER" or "tCER" is a CER issued to project participants in an afforestation or reforestation project activity under the CDM which, subject to the provisions of section K below, expires at the end of the commitment period following the one in which they are issued. "Long-term CER" or "lCER" is a CER issued for an afforestation or reforestation project activity under the CDM which, subject to the provisions in section K below, expires at the end of the crediting period of the afforestation or reforestation project activity under the CDM for which it was issued. Project participants in afforestation and reforestation may choose whether to receive tCERs or lCERs for emission reductions attributable to the project (EB 15, Annex 9). Since the CDM modalities and procedures apply to afforestation and reforestation project activities except as otherwise provided in 5/CMP.1 and 6/CMP.1, references in those modalities to CERs should be read as references to tCERs and lCERs when interpreted in the context of such projects (5/CMP.1, Annex, paragraph 2).

Eligiblity to use CERs

Certain eligibility requirements apply to Parties seeking to use CERs to meet their quantified emission limitation and reduction commitments. These are:
Subject to the provisions of paragraph 32 below, a Party included in Annex I with a commitment inscribed in Annex B is eligible to use CERs, issued in accordance with the relevant provisions, to contribute to compliance with part of its commitment under Article 3, paragraph 1, if it is in compliance with the following eligibility requirements: 1. It is a Party to the Kyoto Protocol; 2. Its assigned amount pursuant to Article 3, paragraphs 7 and 8, has been calculated and recorded in accordance with decision 13/CMP.1; 3. It has in place a national system for the estimation of anthropogenic emissions by sources and anthropogenic removals by sinks of all greenhouse gases not controlled by the Montreal Protocol, in accordance with Article 5, paragraph 1, and the requirements in the guidelines decided thereunder; 4. It has in place a national registry in accordance with Article 7, paragraph 4, and the requirements in the guidelines decided thereunder; 5. It has submitted annually the most recent required inventory, in accordance with Article 5, paragraph 2, and Article 7, paragraph 1, and the requirements in the guidelines decided there under, including the national inventory report and the common reporting format. For the first commitment period, the quality assessment needed for the purpose of determining eligibility to use the mechanisms shall be limited to the parts of the inventory pertaining to emissions of greenhouse gases from sources/sector categories from Annex A to the Kyoto Protocol and the submission of the annual inventory on sinks; 6. It submits the supplementary information on assigned amount in accordance with Article 7, paragraph 1, and the requirements in the guidelines decided thereunder and makes any additions to, and subtractions from, assigned amount pursuant to Article 3, paragraphs 7 and 8, including for the activities under Article 3, paragraphs 3 and 4, in accordance with Article 7, paragraph 4, and the requirements in the guidelines decided thereunder (3/CMP.1, Annex, paragraph 31).

An Annex I Party will be considered to have met the requirements in paragraph 31 above when 16 months have elapsed since the submission of its national inventory report, with no objections raised to the contents of the report:
A Party included in Annex I with a commitment inscribed in Annex B shall be considered: 1. To meet the eligibility requirements referred to in paragraph 31 above after 16 months have elapsed since the submission of its report to facilitate the calculation of its assigned amount pursuant to Article 3, paragraphs 7 and 8, and to demonstrate its capacity to account for its emissions and assigned amount, in accordance with the modalities adopted for the accounting of assigned amount under Article 7, paragraph 4, unless the enforcement branch of the Compliance Committee finds in accordance with decision 24/CP.7 that the Party does not meet these requirements, or, at an earlier date, if the enforcement branch of the Compliance Committee has decided that it is not proceeding with any questions of implementation relating to these requirements indicated in reports of the expert review teams under Article 8 of the Kyoto Protocol, and has transmitted this information to the secretariat (3/CMP.1, Annex, paragraph 32(a)).

An Annex I Party will continue to be eligible to use CERs towards its emissions target unless the enforcement branch of the Compliance Committee decides to suspend its eligibility:
A Party included in Annex I with a commitment inscribed in Annex B shall be considered: ...

1. To continue to meet the eligibility requirements referred to in paragraph 31 above unless and until the enforcement branch of the Compliance Committee decides that the Party does not meet one or more of the eligibility requirements, has suspended the Party's eligibility, and has transmitted this information to the secretariat (3/CMP.1, Annex, paragraph 32(b)).

3/CMP.1, paragraph 33 provides that private and/or public entities authorised by a Party to participate in a CDM project activity will only be able to receive certified emission reductions (CERs) from that project activity if the authorising Party meets all these eligibility requirements at the time of providing the authorisation:
Private and/or public entities may only transfer and acquire CERs if the authorizing Party is eligible to do so at that time (3/CMP.1, paragraph 33).

Emission reductions
In the CDM context, emission reductions represent the difference between baseline emissions and actual emissions, once leakage has been accounted for: Subsequent to the monitoring and reporting of reductions in anthropogenic emissions, CERs resulting from a CDM project activity during a specified time period shall be calculated, applying the registered methodology, by subtracting the actual anthropogenic emissions by sources from baseline emissions and adjusting for leakage (3/CMP.1, Annex, paragraph 59). Reflecting this principle, the project design document must contain the following information relating to the calculation of emission reductions:
1. Description of formulae used to calculate and estimate anthropogenic emissions by sources of greenhouse gases of the CDM project activity within the project boundary 2. Description of formulae used to calculate and to project leakage, defined as: the net change of anthropogenic emissions by sources of greenhouse gases which occurs outside the CDM project activity boundary, and that is measurable and attributable to the CDM project activity 3. The sum of (i) and (ii) above representing the CDM project activity emissions 4. Description of formulae used to calculate and to project the anthropogenic emissions by sources of greenhouse gases of the baseline 5. Description of formulae used to calculate and to project leakage [in the baseline scenario] 6. The sum of (iv) and (v) above representing the baseline emissions 7. Difference between (vi) and (iii) above representing the emission reductions of the CDM project activity (3/CMP.1, Annex, Appendix B, paragraph 2(i)).

Estimating emission reductions

Multiple regression analysis

Where multiple regression analysis is used to estimate baseline emissions or project emissions, the Executive Board has clarified that certain safeguards must be used in order to ensure the conservativeness and rigour of the fitted regression model:
1. In the process of fitting the regression, assumptions and requirements for regression models should be considered e.g. testing for multicollinearity; 2. Independent variables that are likely to influence the dependent variable in question should be accounted for. Technical background information that may support the selection of such variables should be provided with the methodology for the review of the panel; 3. Testing for statistical significance for all independent variables should be done. Independent variables which are statistically significant at 95% confidence level should be selected in the regression model;

4. If the time series data is used to fit the regression, autocorrelation should be tested. In case autocorrelation is found to be statistically significant, time series analysis should be used instead of regression (EB 21, Annex 7, paragraph 1). Life-cycle analysis

Where lifecycle analysis (LCA) is used to estimate emission reductions, project participants must provide all equations, parameterisations and assumptions used to calculate baseline and monitoring methodologies. This can be accomplished, for example, by attaching a copy of the referenced LCA or LCA tool, with relevant sections highlighted (EB 22, Annex 2, paragraph 1).
Consideration of uncertainties

Methodologies employing sampling to derive parameters in estimating emissions reductions must quantify these parameter uncertainties at the 95% confidence level. In addition, the choice of the upper or lower bounds used in estimating emission reductions must be conducted in a manner that ensures conservativeness (EB 15, Annex 2, paragraph 10).
Inclusion/exclusion of emission sources in baseline and monitoring methodologies

When defining which emission sources should be considered in the project boundary, in the baseline scenario and in the calculation of leakage emissions, project participants should make conservative assumptions. For example, the magnitude of emission sources omitted in the calculation of project emissions and leakage effects (if positive) should be equal to or less than the magnitude of emission sources omitted in the calculation of baseline emissions (EB 15, Annex 2, paragraph 11). Click here or more information on estimating baseline emissions and developing a baseline scenario.
Avoiding double-counting in biofuel projects

At EB 26, the Executive Board provided guidance on how to avoid the double-counting of emission reductions that could occur in project activities if both biofuel production and biofuel use are eligible to generate CERs. Eligible biofuels projects include:

The consumption (end-use) of biofuels where this displaces fossil fuel consumption; and The production of biofuels, provided that: 1. the consumers, to whom the biofuel is sold, are included in the project boundary; and 2. the emissions reduction from use of biofuel are estimated based on monitored consumption by the consumers included within the project boundary.

EB 26, Annex 12 clarifies that:

Biofuel production, where the biofuel is exported to Annex I countries, is not eligible to claim CERs under the CDM. Emissions associated with the production of the biomass used to produce the biofuel must be accounted for when calculating emissions achieved by the project activity, unless it is using biomass originating from a registered afforestation/reforestation project activity. For producers, the methodology must provide a monitoring framework (e.g. electronic logs) that can verify without doubt the actual amount of biofuel consumed by the end user for displacement of fossil fuels. The monitored consumption by the end-user is then the basis for calculating emission reductions. For consumers, the methodology must provide an estimate of leakage which is measurable and attributable to the project activity.

Upstream emissions

The Executive Board has requested the Meth Panel to provide further guidance on upstream emissions, and in particular:

the definition of upstream emissions; the boundary for consideration of upstream impacts; definition of significance; the double accounting of emissions due to CDM project activities upstream of the project activity; and a clear definition of "causality" in identifying the relevant emission sources upstream of the project activity (EB 33, paragraph 28).

The Meth Panel is expected to report back on these issues in the near future.
Land use changes

Where activities that are carried out on a project site prior to the project being implemented are simply shifted to another site once the project is operational, this can result in considerable emissions as well as degradation of lands and deforestation of natural forests. The Executive Board has clarified that in this circumstance, the resultant emissions must be taken into account in the development of baseline and monitoring methodologies. The Executive Board requested at EB 29 that the Meth Panel work with the Afforestation and Reforestation Working Group to address these issues (EB 29, paragraph 34). At EB 33, the Executive Board revised the approved simplified baseline and monitoring methodology for small-scale A/R projects implemented on grasslands or croplands (ARAMS0001) to take into account the leakage of emissions from the shift of pre-project activities to other land (EB 33, paragraph 42).

Crediting Period (P)

The definition of crediting period is set out in the CDM Glossary of Terms:
The crediting period for a CDM project activity is the period for which reductions from the baseline are verified and certified by a designated operational entity for the purpose of issuance of CERs (CDM Glossary of Terms Version 03).

Therefore, the crediting period is the duration of time selected by the project participants during which the CDM project activity will be implemented and greenhouse gas emission reductions (and consequently certified emission reductions (CERs)) will be generated.

Selecting a crediting period

The crediting period for a CDM project activity is selected by the project participants, and may be either:
1. A 7-year crediting period, renewable twice; or 2. A single 10-year crediting period.

3/CMP.1, Annex, paragraph 49 sets out the following:

Project participants shall select a crediting period for a proposed project activity from one of the following alternative approaches:
1. A maximum of seven years which may be renewed at most two times, provided that, for each renewal, a designated operational entity determines and informs the Executive Board that the original project baseline is still valid or has been updated taking account of new data where applicable; or 2. A maximum of 10 years with no option of renewal (3/CMP.1, Annex, paragraph 49).

This was later confirmed by the Executive Board in the Procedures for requesting postregistration changes to the start date of the crediting period (EB 52, Annex 59):
In accordance with paragraph 49 of the modalities and procedures for a clean development mechanism, the crediting period may last a maximum of seven or ten years from this start date in the case of renewable and non-renewable crediting period respectively (EB 52, Annex 59, paragraph 2).

Commencement of the crediting period

In general, the Executive Board will only issue CERs for a crediting period which commences after the date of registration of the relevant CDM project activity:
...certified emission reductions shall only be issued for a crediting period starting after the date of registration of a clean development mechanism project activity.

Historically, there have been some limited exceptions to this rule, which have now expired. These 'prompt start' exceptions are explained below. The starting date and length of the first crediting period must be determined before registration, and this information must be included in the request for registration:
The starting date and length of the first crediting period has to be determined before registration (CDM Glossary of Terms Version 03).

At the point of requesting registration for a proposed project activity, DOEs shall ensure that project participants state the start date of the crediting period of the proposed project activity (EB 52, Annex 59, paragraph 1). Only one start date for the crediting period can be specified, and this date must be selected without qualifications:
1. Project participants shall specify only one start date for the crediting period, even in cases of phased implementation. 2. Project participants shall state in the project design document the start date of the crediting period in the format dd/mm/yyyy, no qualifications, e.g. "expected", can be made to this date (EB 52, Annex 59, paragraphs 1 and 4).

Decision -/CMP.6 requested the EB to revise the procedures for registration to allow the effective date of registration and the possible start date of the crediting period to be the date on which a complete request for registration is submitted by the DOE where the project is registered automatically (-/CMP.6, paragraph 56).

End of the crediting period

The crediting period can only continue whilst the project activity is operational:

A crediting period shall not extend beyond the operational lifetime of the project activity (CDM Glossary of Terms Version 03).

Requesting changes to the start date of a crediting period

A request for a change to the start date of the crediting period can only be made where the start date is after the date of registration. In other words, projects claiming retroactive credits cannot request changes in the start date of the crediting period: Participants in projects for which the start date of the crediting period is prior to the date of registration (i.e. project claiming retroactive credits) cannot request changes in the start date of the crediting period (EB 52, Annex 59, paragraph 6). The procedures for requesting changes to the start date subsequent to the registration of a CDM project activity are set out in EB 52, Annex 59. Requests can be made to the secretariat according to the procedure set out in EB 52, Annex 59, paragraph 7: Participants of projects for which the start date of the crediting period is after the date of registration may:
1. Inform the secretariat that the start date of the crediting period be moved to a date up to one year earlier than the one indicated in the PDD, provided that this date is not earlier than the date of registration of the project activity; 2. Inform the secretariat to delay the start date of the crediting period by up to one-year; 3. Make a request to the secretariat, via a DOE, that the start date of the crediting period be delayed by more than one year but no more than 2 years by submitting to the secretariat a confirmation from a DOE that no changes have occurred which would result in a less conservative baseline and that substantive progress mas been made by the project participants to start the project activity.(EB 52, Annex 59, paragraph 7).

Note, EB 52, Annex 59, paragraph 8 provides that participants of projects hosted by a Least Developed Country may:
1. Inform the secretariat to delay the start date of the crediting period by up to two years; 2. Make a request to the secretariat, via a DOE, that the start date of the crediting period be delayed by more than two years but no more than four years, by submitting to the secretariat a confirmation from a DOE that no changes have occurred which would result in a less conservative baseline and that substantive progress has been made by the project participants to start the project activity."

Requests to the secretariat to change the start date can only be made once for each registered project activity:
Project participants may only make use of provisions of paragraph 7 and 8 once for each registered project activity (EB 52, Annex 59, paragraph 10).

'Prompt start' - crediting periods established prior to registration

As noted above, in general, the Executive Board will only issue CERs for a crediting period which commences after the date of registration of the relevant CDM project activity:
...certified emission reductions shall only be issued for a crediting period starting after the date of registration of a clean development mechanism project activity (17/CP.7, paragraph 12).

However, an exception was made to this general rule to allow for the 'prompt start' of the CDM and promote market liquidity through the early generation and trading of CERs. Project activities that:

commenced before the first registration of a CDM project (which occurred on 18 November 2004), and were submitted for registration before 31 December 2005 (or in certain circumstances, were not submitted for registration by this date but were registered by the Executive Board by 31 December 2006),

were permitted to use a crediting period starting prior to the date of registration, but this crediting period could not begin earlier than 1 January 2000. This rule was developed in three stages. The Conference of Parties (COP) decided on 10 November 2001 at COP 7 to facilitate the prompt start of the CDM: The Conference of the Parties, ...
1. Decides to facilitate a prompt start for a clean development mechanism by adopting the modalities and procedures contained in the annex below (17/CP.7, paragraph 1).

To give effect to this the COP decided, at the same meeting, that:
...a project activity starting as of the year 2000, and prior to the adoption of this decision, shall be eligible for validation and registration as a clean development mechanism project activity if submitted for registration before 31 December 2005. If registered, the crediting period for such project activities may start prior to the date of its registration but not earlier than 1 January 2000 (17/CP.7 paragraph 13).

The above decision provides that the crediting period for a CDM project activity may precede the date of registration if the project activity:

commenced on or after 1 January 2000 but prior to 10 November 2001; and was submitted for registration before 31 December 2005.

Following a recommendation of the Executive Board (EB 12, Annex 3, paragraph 2), the COP later decided that:
...a clean development mechanism project activity starting between the date of adoption of decision 17/CP.7 and the date of the first registration of a clean development mechanism project activity, if submitted for registration before 31 December 2005, may use a crediting period starting prior to the date of its registration (18/CP.9 paragraph 1(c)).

The above decision provides that the crediting period for a CDM project activity may precede the date of registration if the project activity:

commenced on or after 10 November 2001, but before 18 November 2004; and was submitted for registration before 31 December 2005.

A limited exception was made to the 31 December 2005 deadline for submission of the request for registration:
The Board agreed to the following exceptional provisions with regard to the deadline of 31 December 2005 that project participants may benefit from a crediting period starting prior to the date of registration:

1. Requests have to be uploaded by DOEs through the UNFCCC CDM web site interface before 31 December 2005 @ GMT 24:00 (the transfer reference for the fee payment is forwarded to DOE/PP after this step is undertaken). The DOE shall indicate if the crediting period is to start prior to the date of registration. 2. The related proof of payment shall be submitted by the project participants expeditiously through the DOE. A proof of payment shall be uploaded by a DOE on 20 January 2006 at the latest. 3. The secretariat shall undertake its completeness check as soon as possible after a request has been uploaded by a DOE through the dedicated interface on a first come first serve basis. The check shall ensure that adequate documentation has been submitted (approval letters (authorization) by Parties, correct version numbers of documentation). The Board expects that such checks could be completed by the secretariat before 14 January 2006. The Board notes that the accreditation of DOEs may be questioned if the submission contains clearly inadequate documentation not corresponding to the guidance and guidelines provided by the Board. 4. If the proof of payment is not received in time and/or the completeness check process is not concluded before 15 February 2006, the activity may only be considered for registration with a crediting period starting after the date of registration (EB 22, paragraph 74).

A third exception was made by the Conference of the Parties serving as the meeting of the Parties (COP/MOP) at 7/CMP.1, allowing projects that were not registered by 31 December 2005 but were submitted for validation or had submitted a new methodology to claim retroactive credits, provided they were registered by 31 December 2006: The Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol...
4. Decides that project activities that started in the period between 1 January 2000 and 18 November 2004 and have not yet requested registration but have either submitted a new methodology or have requested validation by a designated operational entity by 31 December 2005 can request retroactive credits if they are registered by the Executive Board by 31 December 2006 at the latest (7/CMP.1, paragraph 4).

The date for registration was then extended by the Conference of the Parties serving as the meeting of the Parties (COP/MOP) at 1/CMP.2 until 31 March 2007. The Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol, ... 4. Authorizes the Executive Board to extend the deadline for the submission for registration of the clean development mechanism project activities referred to in paragraph 4 of decision 7/CMP.1 from 31 December 2006 to 31 March 2007 (7/CMP.2, paragraph 4).

Renewing a crediting period

The Procedure for renewal of a crediting period of a registered CDM project activity (Version 5) was adopted at EB 46, Annex 11. This replaces earlier guidance at EB 43, Annex 13 (Version 4), EB 36, Annex 43 (Version 3), EB 33, Annex 60 (Version 2) and EB 28, Annex 40 (Version 1). The tool to asses the validity of the original/current baseline and to update the baseline at the renewal of a crediting period is a procedure to assess validity, compliance and impact found in Annex 1 to EB 46, Annex 11. A crediting period may be renewed if a DOE determines that the original baseline is still valid or has been updated: Project participants shall select a crediting period for a proposed project activity from one of the following alternative approaches:
1. A maximum of seven years which may be renewed at most two times, provided that, for each renewal, a designated operational entity determines and informs the Executive Board

that the original project baseline is still valid or has been updated taking account of new data where applicable (3/CMP.1, Annex, paragraph 49(a)).

In order to apply for a renewal of the crediting period, project participants must update the PDD as follows: Project participants shall update those sections of the project design document (CDM-PDD) relating to the baseline, estimated emission reductions and the monitoring plan using an approved baseline and monitoring methodology as follows:
1. The latest approved version of a baseline and monitoring methodology, applied in the original CDM-PDD of the registered CDM project activity, shall be used whenever applicable; 2. If a baseline and monitoring methodology, applied in the original CDM-PDD, was withdrawn after the registration of the CDM project activity and replaced by a consolidated methodology, the latest approved version of the respective consolidated methodology shall be used; 3. If the registered CDM project activity does not meet the applicability criteria of the options provided for by a) or b), due to their revision or due to the update of the baseline, the project participants shall either select another applicable approved methodology or request, through the DOE, a deviation from an approved methodology for the purpose of renewal of the crediting period (EB 36, Annex 43, paragraph 2).

To demonstrate validity of the original baseline, an assessment of emissions that would have resulted from that scenario must be provided. The demonstration of the validity of the original baseline or its update does not require a reassessment of the baseline scenario, but rather an assessment of the emissions which would have resulted from that scenario (EB 43, Annex 13, paragraph 3). This updated PDD must then be forwarded to the DOE: Project participants shall notify the secretariat, by email or through a dedicated web interface, of their intention to request a renewal of a crediting period of the registered CDM project activity by submitting an updated CDM-PDD and informing of their selection of a DOE, within nine to six months prior to the date of expiration of the current crediting period (EB 36, Annex 43, paragraph 3). A new letter of approval is not required: For the purpose of renewal of the crediting period it is not necessary to obtain a new letter of approval from Parties involved (EB 36, Annex 43, paragraph 4). The secretariat will use best efforts to remind project participants that the crediting period is due for renewal, but ultimately it is the responsibility of the project participants to ensure this is done: The secretariat will make the best effort to inform project participants in advance of the period for requesting renewal of the crediting period in accordance with the registered modalities of communication. It remains under the responsibility of project participants to ensure that all actions are taken in accordance with these procedures in a timely manner (EB 36, Annex 43, paragraph 5). If notice to renew the crediting period is not received from project participants within 6 months of its expiry, CERs will not be issued for the period from the expiration date to the deemed renewal date: If the notification of the intention to request a renewal of a crediting period is not received by the secretariat six months prior to the date of expiration of the current crediting period, the

project participant shall not be entitled to the issuance of certified emission reductions for the period from the expiration date of the current crediting period until the date on which the crediting period is deemed renewed (EB 36, Annex 43, paragraph 5). The DOE's opinion must address the validity of the original baseline, the impact of new policies and circumstances and the continued validity of the baseline: The DOE's validation opinion shall assess the validity of the original baseline or its update through an assessment of the following issues:
1. an impact of new relevant national and/or sectoral policies and circumstances on the baseline taking into account relevant EB guidance with regard to renewal of the crediting period at the time of requesting renewal of crediting period; and 2. the correctness of the application of an approved baseline methodology for the determination of the continued validity of the baseline or its update, and the estimation of emission reductions for the respective applicable crediting period (EB 43, Annex 13, paragraph 7).

The request for renewal must be submitted using the F-CDM-REN form: A DOE shall submit a request for renewal of a crediting period of a registered CDM project activity using the form "Renewal of the crediting period of a registered CDM project activity" (F-CDM-REN) along with the updated project design document and validation report (EB 36, Annex 43, paragraph 7). Once the request has been submitted: The secretariat will check the documentation is complete; The secretariat will then make the request publicly available for a 4 week period; and If there is no request for review, the crediting period will be deemed to be renewed. This is set out in EB 36, Annex 43, paragraphs 8-10: 8. Upon receipt of a request for renewal of a crediting period of the registered CDM project activity the secretariat will determine whether all information and documentation requested in the FCDM-REN form has been provided by the DOE. 9. Once the secretariat has determined that the request is complete it shall be made publicly available through the UNFCCC CDM web site for a period of four (4) weeks. The secretariat shall announce a request for renewal of a crediting period of the registered CDM project activity on the UNFCCC CDM web site and notify the requesting DOE, the project participants and the Designated National Authorities. 10. Unless there is a request for review within four weeks after the publication of the request for renewal, the crediting period of the registered CDM project activity shall be< deemed renewed (EB 36, Annex 43, paragraphs 8-10). The procedures applying to a review of registration, as modified, apply also to a review of a request to renew a crediting period: The procedures to be applied for review of a request for renewal of a crediting period are those contained in Annex III to Decision 4/CMP.1 and following relevant clarifications (EB 36, Annex 43, paragraph 11).

Note that 38/CMP.5 revoked Annex III to decision 4/CMP.1. However, the Executive Board will continue to apply Annex III until revised procedures are finalised. The renewed crediting period starts the day after the previous crediting period ends: The start date of the renewed crediting period is the first day after the ending date of the previous crediting period (EB 36, Annex 43, paragraph 12). For large-scale projects, the DOE that submits the request for a renewed crediting period may not perform verification for the renewed crediting period: Any DOE can be selected by project participants to perform this task, however for large scale projects the DOE that submits the request for renewal of the crediting period shall not perform verification for this the renewed crediting period (EB 36, Annex 43, footnote 2).

Kyoto Protocol
The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC). The UNFCCC's background publication, Caring for Climate, describes the Kyoto Protocol in the following way. The Kyoto Protocol supplements and strengthens the Convention, providing a framework for remedial and precautionary action to tackle adverse effects of climate change. Only Parties to the Convention can become Parties to the Protocol. The Protocol is founded on the same principles as the Convention and shares its ultimate objective, as well as the way it groups and classifies countries. It also shares the Conventions institutions, including its subsidiary bodies and secretariat. The Conference of the Parties serves as the 'meeting of the Parties' to the Protocol. The IPCC supports the Protocol on scientific, technical and methodological matters, in the same way as it supports the Convention. The Protocol's rules focus on:

Commitments, including legally binding emissions targets and general commitments Implementation, including domestic steps and three novel implementing mechanisms Minimizing impacts on developing countries, including use of the Adaptation Fund Accounting, reporting and review, including in-depth review of national reporting Compliance, including a Compliance Committee to assess and deal with problems.

In addition to emissions targets for Annex I Parties, the Kyoto Protocol also contains a set of general commitments (mirroring those in the Convention) that apply to all Parties, such as:

Taking steps to improve the quality of emissions data Mounting national mitigation and adaptation programmes Promoting environmentally friendly technology transfer Cooperating in scientific research and international climate observation networks Supporting education, training, public awareness and capacity building (Caring for Climate, page 24-25).

Clean Development Mechanism (CDM)

The Clean Development Mechanism (CDM) is one of the three flexible mechanisms contained in the Kyoto Protocol. It allows entities from Annex I (developed) Parties to develop emission-reducing projects in non-Annex I (developing) countries, and generate tradeable credits corresponding to the volume of emission reductions achieved by that project.

The CDM rules govern a number of stages and entities in the CDM, which can be divided into two phases - the development phase and the implementation phase. The typical CDM project cycle is as follows:

The development of the Kyoto Protocol

The negotiations of the United Nations Framework Convention on Climate Change (UNFCCC) concluded in 1992. By the time it entered into force two years later on 21 March 1994, it had become clear that the commitments enshrined in the text would not be robust enough to address dangerous climate change. At the first Conference of the Parties (COP), a decision dubbed the Berlin Mandate provided the context for the negotiation of a protocol to the UNFCCC that would impose more rigorous obligations. After two and a half years of negotiations a protocol to the UNFCCC was adopted on 11 December 1997 at COP 3 in Kyoto, Japan (the Kyoto Protocol). The adoption of the Kyoto Protocol marked a watershed in the global response to climate change, setting for the first time quantitative restrictions on emissions from industrialised countries. It also established the architecture for three flexible mechanisms to address climate change, including the Clean Development Mechanism (CDM). However, the nature of the negotiations leading to the Kyoto Protocol precluded discussion of detailed rules for its mechanisms. Further rounds of inter-governmental talks would develop the procedures of the CDM that now govern the creation and trading of legal rights derived from the management of anthropogenic greenhouse gas emissions.

The entry into force of the Kyoto Protocol and the development of detailed rules for the CDM
The signature of the Kyoto Protocol in 1997 was followed by a period of discussion between the Parties to the UNFCCC about the detailed rules of the CDM (and the other flexible mechanisms). This dialogue continued for a number of years, culminating in a series of decisions at COP 7 in Marrakesh, Morocco in 2001 (the Marrakesh Accords). The Marrakesh Accords adopted, amongst other things, a draft set of rules for the operation of the CDM (the CDM modalities and procedures). At the time, the Kyoto Protocol had not entered into force. However, decision 17/CP.7 gave the CDM Executive Board (the Executive Board) the authority to commence provisional operation of the CDM in light of the length of time projects would take to become operational, pending the Kyoto Protocol's entry into force. On 16 February 2005, Russian ratification took the number of countries and the emissions ratio beyond the required threshold for the Kyoto Protocol to enter into force (not less than 55 Parties to the UNFCCC, accounting for at least 55% of total carbon dioxide emissions (at 1990 levels) for Annex I Parties). Following its entry into force, formal inter-governmental discussions on the Kyoto Protocol would be known as meetings of the Parties (MOPs) and would run in parallel to COPs. During October and November 2005, the eleventh COP ran in conjunction with the first MOP, creating the first combined COP/MOP forum. It was at the inaugural Conference of the Parties to the UNFCCC serving as the Meeting of the Parties to the Kyoto Protocol (COP/MOP) assembly that the CDM modalities and procedures were formally adopted. However, the CDM modalities and procedures are still subject to further refinement by the Executive Board, under the guidance and authority of the Parties. The development of the CDM as shown in this section is demonstrated by the diagram below.

What Are Certified Emissions Reductions

Certified Emissions Reductions (CER's) are usually known as or referred to as 'carbon credits', and additionally as 'carbon offsets', launched as a substitution for carbon emissions under the Kyoto Protocol's Clean Development Mechanism (CDM).

What is the Kyoto Protocol? The Kyoto Protocol is an international agreement (signed in Kyoto, Japan) linked to the United Nations Framework Convention on Climate Change. The main major function of the 1995 Kyoto Protocol is that it sets binding targets for 37 developed countries and the European community for reducing green house gas emissions. 1 CER equals an emission reduction in one tonne of Co2.

Those who purchase CERs are entitled to offset his or her CO2 emissions as another way of achieving their own Kyoto contaminants reduction goal. Emissions Reductions Units (ERUs) are often types of Eco-friendly green house Gas cuts (in addition to, a part of a nation's designated amount) that have been produced by way of Shared Implementation within Article six in the Kyoto Protocol - rather than Certified Emission Reduction models (CERs) - which have been produced and qualified in the provisions of Article 12 in the Kyoto Protocol, in particular the Clean Development Mechanism. With the Kyoto Protocol, developed nations have to essentially lessen their own pollutants associated with eco-friendly house gases. The Kyoto Protocol envisages market-based "flexible systems". Every one of these permit developed nations to fulfill their unique targets simply by buying and selling emission factors among themselves, and by permitting credits relevant to emission-curbing initiatives within different locations in the developing world. The Clean Development Mechanism (CDM) addresses many of these initiatives throughout nations without getting targets, i.e. developing worldwide locations. Credits are just granted for cuts in case your venture offers genuine, quantifiable and extended-term climatic change benefits. Credits released within Joint Implementation (JI), shared initiatives among developed nations with Kyoto targets, are classified as ERUs (Emission Reduction Units). The main reason driving the majority of these CDMs and JI systems is eco-friendly house gas pollutants certainly are a worldwide problem and knowing that where cuts are usually

accomplished is usually of less significance. Because of this, cuts can be produced wherever the prices is best, especially during the early phases associated with dealing with climatic change. To discover the green web hosting companies who purchase CER's as offsets to their carbon emissions, please read the full reviews on the right of this page.