Expanding and streamlining the United Nations Framework Convention on Climate Change’s (UNFCCC) Clean Development Mechanism (CDM) will be 2008’s focal points for the CDM Executive Board, according to Rajesh Kumar Sethi, who as its newly appointed chairperson is the man in charge of managing the world’s largest market-based mechanism for verifying and financing carbon dioxide emissions reduction projects.
“The CDM is operating in close to 50 countries, and is approaching its thousandth registered project with 128 million CERs already issued. Everyone involved can take some pride in those stats, but until the potential of the mechanism is realized in the lesser developed countries, especially in Africa, we cannot rest,” Sethi said in a media release.
The CDM and CERs
The CDM is the primary means of financing, implementing and keeping track of carbon dioxide emissions reductions projects undertaken by Kyoto Protocol signatories, in particular those involving technology transfer between nations with developed and those with developing market economies.
Certified emissions reduction credits (CERs), each representing a reduction of one metric ton of carbon dioxide, are issued once a project passes successfully through the proposal and registration process. More than 950 CDM projects in 49 developing countries have been registered thus far. Another 2000 are in the project registration pipeline.
The CERs can be used by European companies, for example, to offset and meet Kyoto Protocol emissions reductions targets in their home countries. They can also be traded under the European Trading Scheme (ETS), as well as on exchanges that list carbon emissions reduction contracts.
Developing nations have made voluntary commitments to reduce CO2 but are not subject to binding targets, a main point of contention in the ongoing negotiations to forge a meaningful international consensus and agreement on a climate change treaty and apparatus post-Kyoto, which expires in 2012.
Streamlining and Expansion
With interest in emissions reduction credit markets booming, streamlining the CDM registration process without compromising its integrity is a key challenge for the CDM Executive Board.
The CDM works through a group of approved private project validators to assess each proposed project. The Executive Board is working with this group to develop a manual of best practices. Sethi has made its early release a priority because of its potential to increase the quality of project proposals submitted to the Board for registration and reduce the number tagged for review.
“The manual should go a long way towards improving the quality of project submissions. Beyond that, we’ll also be looking for ways to streamline the registration and issuance timelines, to the extent feasible,” Sethi stated.
Looking to increase the number and reach of CDM projects, the Board last year instituted procedures and guidelines for so-called Programme of Activities (PoAs), which enables multiple projects spread across a wide area to be consolidated and proposed for registration under a single programme umbrella. One PoA proposal has been put forward for validation thus far.
Sethi will occupy the CDM chair for one year. During his term he also intends to work towards development of a methodology for mass transport projects and has encouraged project participants to propose one, according to the media release.