CLEAN DEVELOPMENT MECHANISM OF THE

KYOTO PROTOCOL

Group J - Matt Bastyan, Simon Crook, Joe Payne, Sarah Teverson, Michael Treiber, Paula

Urry

Introduction

• Definition of the CDM• Section A: Types of projects (renewable,

buildings & afforestation/reforestation)• Section B: Standards & definitions• Conclusion

CLEAN DEVELOPMENT MECHANISM

DEFINITION ‘The purpose of the clean development mechanism shall be to assist Parties not included in Annex I in achieving

sustainable development and in contributing to the ultimate objective of the Convention, and to

assist Parties including Annex I in achieving compliance with their quantified emission

limitation and reduction commitments […].’ (UNFCCC, 1998)

Section A: Individual sectors

Project Mix of CDM (UNEP Risoe, 2010)

Afforestation & Reforestation

• 15% of global anthropogenic carbon emissions are from deforestation

• “forest” within CDM

A/R Conclusions

• Barriers within A/R sector: – CDM policies and guidelines are unclear– Community based projects often over looked– Economic incentives favour profitable projects– Maximum crediting period of 21 years is not enough

for A/R projects– Carbon sequestration calculations ignore parts of

the forest carbon cycle

Renewable

• Including:– Hydropower– Geothermal– Wind power

Renewable Conclusions

• More projects under CDM than other sectors– Majority are hydropower (27%)

• Negatives associated with renewable sector:– Projects can cause large scale relocation– Financial investment is limited

Building sector

• 25-30% energy related CO2 emissions globally

• Low costs technologies and measures allow great potential for emissions reductions

• Few projects approved, therefore, emissions curbing is limited

Building Sector Conclusions

• Barriers within buildings sector:– Many small emissions sources– Technology specific measures – Lack of baseline and monitoring methodologies– Difficulty proving project additionality– Economic incentive too weak

Section B: Standards & definitions

Additionality

• Emissions ‘[...] by sources are reduced below those that would have occurred in the absence of the registered CDM project activity.’

(UNFCCC, 2002)

• Greenhouse gas emissions from the projects are lower than if the project did not take place

(Mendis & Openshaw, 2004)

Reasons for rejection

Sustainable development

• Underlining principle of CDM • ‘[…] meeting the needs of the

present without compromising the ability of future generations to meet their own needs.’ (UN, 1987)

• Host countries define SD criteria (Marrakesh Accord, 2001)

Limitations for host countries

• Multiple definitions of key CDM requirements • Additionality favours existing technology, it is

a barrier to innovation• Competition to attract investment driving

down sustainable development standards– “Race to the bottom” (Sutter & Parreno, 2007)

Opportunities for financial institutions

• Major traders are speculators (Chan, 2009)

• Potential cost savings by using CERs instead of EUAs

• Oligopoly of DOEs– e.g. TUV SUD

• ‘green-washing’– e.g. BP, Shell,

CER €t-1 (15 Mar-26 Apr 2010)(Point Carbon, 2010)

Conclusion

• Projected reduction of 1,035mt CO2e by 2012 through CDM

But…• Untapped potential of CDM• CDM aims are overlooked• Corporate gain

not emission reduction not sustainable development

Questions?

ReferencesChan, M. (2009) Subprime carbon? Re-thinking the world’s largest new derivatives market, Friends of

the Earth, USAPoint Carbon. (2010). Carbon Market Daily. Retrieved April 26, 2010, from Point Carbon:

http://www.pointcarbon.com/news/cmd/1.1439103Sutter, C. & Parreno, J. (2007) Does the current Clean Development Mechanism (CDM) deliver its

sustainable development claim? An analysis of officially registered CDM projects, Climatic Change, Vol. 84, pp. 75-90

UN (1987) Report of the World Commission on Environment and Development, General Assembly Resolution 42/187, 11.12.1987 (Access date: 19.4.2010)

UNEP Risoe. (2010). CDM Pipeline Analysis and Database, March 1st 2010. Retrieved April 11, 2010, from UNEP Risoe Centre: Energy, Climate and Sustainable Development: http://cdm pipeline.org/

UNFCCC. (1998). Kyoto Protocol - Article 12 . Retrieved April 2010, from United Nations Framework Convention on Climate Change: http://unfccc.int/resource/docs/convkp/kpeng.pdf#page=12

UNFCCC. (2001). The Marrakesh Accords. Retrieved April 2010, from United Nations Framework Convention on Climate Change: http://unfccc.int/cop7/documents/accords_draft.pdf

UNFCCC (2002) Report of the Conference of the parties on its seventh session, held at Marrakesh from 29 October to 10 November 2001 – Part two: Action taken by the conference of the parties: http://unfccc/cp/2001/13/Add.2