Professional Documents
Culture Documents
the CDM
Kyoto Protocol
and the CDM
Management Course
1
Session Agenda:
2
Introduction to Climate Change
Your task: answer these questions
CO2 or CH4?
• If we cut all GHG emissions, how long will
it take for climate
change to stop?
• How realistic was the
movie “The Day
After Tomorrow?”
3
Introduction to Climate Change
Some basic facts
• Human activities are releasing greenhouse
gases (GHG) into the atmosphere
• Climate change is a global issue:
1 tCO2 emitted in India = 1 tCO2 emitted in USA
Kyoto Protocol
and the CDM
4
Introduction to Climate Change
The greenhouse effect
1) Solar radiation
5 2 2) Reflected back to space
Kyoto Protocol
3) Absorbed by atmosphere
and the CDM
6 1 4) Infra-red radiations
emitted from Earth
6
Introduction to Climate Change
Kyoto Protocol The greenhouse gases
and the CDM
7
Introduction to Climate Change
Kyoto Protocol Greenhouses are rising
and the CDM
8
Introduction to Climate Change
Kyoto Protocol ...and so is the temperature
and the CDM
9
Introduction to Climate Change
Trends for 2100
TEMPERATURE PRECIPITATION
Kyoto Protocol
and the CDM
5 degrees = What separates us from the last glacial era (-15 000 BC)
12
Introduction to Climate Change
Less visual but major impact
Water resources
Water supply, water quality...
Coastal areas
Erosion, inundation, cost of prevention...
CO2 or CH4?
• If we cut all GHG emissions, how long will
it take for climate
change to stop?
• How realistic was the
movie “The Day
After Tomorrow?”
14
Kyoto Protocol and CDM at a glance
Your task: answer these questions
17
Kyoto Protocol and CDM at a Glance
Kyoto Protocol – key points
Decreased emissions
(1990 baseline)
Kyoto Protocol
and the CDM
Increased emissions
(1990 baseline)
20
Kyoto Protocol and CDM at a Glance
Flexible mechanisms
ET - Emissions Trading
AAU (Assigned Amount Units) are exchanged
between Annex I countries
Kyoto Protocol
and the CDM
JI - Joint Implementation
Annex I investors receive ERUs (Emission
Reduction Units) by investing in a project in another
Annex I nation which reduces GHG emissions
1/ Pay expensive 2/ Carry out carbon 3/ Buy emissions 4/ Carry out carbon
fines. reduction through credits on the reduction through
processes CO2 market (ETS). technology transfers
improvement. in CDM or JI project.
22
Kyoto Protocol and CDM at a Glance
Kyoto Protocol Opportunities for industry
and the CDM
23
Kyoto Protocol and CDM at a Glance
Opportunities for industry
25
Kyoto Protocol and CDM at a glance
Why CDM?
countries
and the CDM
• Two objectives:
– Help Annex 1 countries meet their
objectives in a cost-effective way
– Contribute to sustainable development
of the host country
26
Kyoto Protocol and CDM at a glance
How the CDM Works
Revenues
27
Kyoto Protocol and CDM at a glance
Your task: answer these questions
8. Project
implementation Registration of Possible review
and monitoring the CDM project by CDM EB 7. 5.
Submission of Make PDD
Validation publicly
Report and available for
PDD 6. 30 days
of Project Validation
9. of Project
Yearly
verification
and Registration of
Possible review
certification
by CDM EB the CDM project
30
CDM Project Cycle
CDM participants
31
CDM Project Cycle
CDM participants
• Responsibilities
– Validating CDM activities
– Making PDDs available
– Receive comments on CDM documents
– Verifying and certifying CERs during project
operation
32
CDM Project Cycle
CDM participants
–
and the CDM
• Other stakeholders
– Local stakeholders: comment on PDD before host
country approval
– Other interested parties: comment on posted
PDD
33
CDM Project Cycle
Step 1. Project preparation
• Five pages
– Project type, size, location
– GHG reductions
– Suggested crediting life time and CER price
– Financial structure
– Other socio-economic and environmental
benefits
35
CDM Project Cycle
Step 3. Develop Project Design
Document (PDD)
A. General description of the project
B. Setting of the baseline
C. Duration of the project / Crediting period
Kyoto Protocol
been selected
• Description of how the approved methodology
will be applied in the context of the project
37
CDM Project Cycle
Step 3. Develop Project Design
Document (PDD)
2008-2012
and the CDM
Tasks of DOE
• Public consultation process (30 days)
• Validation of CDM project against
Kyoto Protocol
and the CDM
requirements
• Submission to CDM-EB
Source: www.cd4cdm.org 42
CDM Project Cycle
Step 8: Project implementation and
monitoring
Monitoring required upon project
implementation
• In accordance with monitoring plan
Kyoto Protocol
and the CDM
of PDD
• For the entire crediting period
• Must at least cover technical project
performance
• Monitoring report submitted to DOE
for verification
43
CDM Project Cycle
Step 9. Yearly verification and
certification
Tasks of verification DOE
• Verification of data accuracy and
completeness and collection in
Kyoto Protocol
and the CDM
transaction costs)
and the CDM
45
CDM Project Cycle
Fast track for small-scale projects
capacity of up to 15 MW
and the CDM
46
CDM Project Cycle
How are CERs sold?
– Multilateral Funds
– EU commitments for carbon purchase
– Bilateral negotiations with the
consortium of buyers
• Average price of 7,5 US$ / tCO2eq
in 2005 (3 to 14 US$)
47
CDM Project Cycle
How are CERs sold?
• What determines the CER price
– Likelihood Seller will deliver verifiable reduction on schedule
– Creditworthiness and experience of project developer
– Technical / technological viability of the project
Kyoto Protocol
and the CDM
48
CDM Project Cycle
Future demand for CERs
Kyoto Protocol
and the CDM
49
CDM Project Cycle
Your task: answer these questions
51
CDM Pre-screen Tool
Kyoto Protocol Part I: CDM eligibility
and the CDM
52
CDM Pre-screen Tool
Part I: CDM eligibility (cont)
53
CDM Pre-screen Tool
Part I: CDM eligibility (cont)
54
CDM Pre-screen Tool
Part I: CDM eligibility (cont)
host country?
and the CDM
55
CDM Pre-screen Tool
Part I: CDM eligibility (cont)
Emissions baseline
ADDITIONAL
EMISSION
REDUCTIONS
Years
Project implementation
56
CDM Pre-screen Tool
Part I: CDM eligibility (cont)
(ODA)?
and the CDM
58
CDM Pre-screen Tool
Part I: CDM eligibility (cont)
62
CDM Pre-screen Tool
Part I: CDM eligibility (cont)
63
CDM Pre-screen Tool
Kyoto Protocol Part II: GHG Calculation
and the CDM
64
CDM Pre-screen Tool
Part II: GHG Calculation (cont)
emission sources:
and the CDM
• Fuel combustion
• Fuel for transport
• Electricity consumption
• Process related
65
CDM Pre-screen Tool
Part II: GHG Calculation (cont)
66
CDM Pre-screen Tool
Kyoto Protocol Part III: Financial Feasibility
and the CDM
67
CDM Pre-screen Tool
Part III: Financial Feasibility (cont)
68
CDM Pre-screen Tool
Part III: Financial Feasibility (cont)
Indicative Timelines and Transaction Costs
under CDM
Project completion Preparation and review of the Project
Upstream Due Diligence, carbon risk
assessment and documentation: $ 40K
3m
s on
ear ths
y Baseline : $20 K
Kyoto Protocol
Up
Periodic verification &
2 mo
certification World Bank
Verification: $15-30 K Experiences
nths
Supervision: $15-30K with
CDM Processes
1-3
Validation process
ye
Contract, Processing
s
ars
th
and documentation: $30k
on
m
2
3 months
70
CDM Pre-screen Tool
Part III: Financial Feasibility (cont)
monitoring system
• Purchase of monitoring equipment and system
71
For further information
• www.energyefficiencyasia.org
• www.unep.fr
•
Kyoto Protocol
www.cd4cdm.org
and the CDM
72
Kyoto Protocol and
Kyoto Protocol
and the CDM
the CDM
Thank you for your attention!
73
Acknowledgements
• This training session was prepared as part of the
development and delivery of the course “Energizing
Cleaner Production” funded by InWent, Internationale
Weiterbildung und Entwicklung (Capacity Building
Kyoto Protocol