1. CLEAN DEVELOPMENT MECHANISM

2. ORIGINS Original idea presented by Brazil. Adopted as a position of the G77 + China. Negotiations began on the margins at Kyoto. Small group convened by Brazil; AOSIS represented by Evans King of T&T. As interest increased, requested by Head of Brazilian delegation to Co-Chair the negotiations on the development of Art 12.

3. OBJECTIVES assist Parties not included in Annex I to the Convention in achieving sustainable development and in contributing to the ultimate objective of the Convention; and assist Parties included in Annex I in achieving compliance with their quantified emission limitation and reduction commitments under Article 3 of the Kyoto Protocol

4. PRIMARY ROLE Projects, funded by entities in Annex I countries and hosted in non-annex I countries, which lead to the transfer of environmentally safe and sound technology and know-how in addition to that required under Article 4, paragraph 5, of the Convention and Article 10 of the Kyoto Protocol.

5. CAVEATS host country’s prerogative to confirm whether a project activity assists it in achieving sustainable development; Annex I entity should refrain from using certified emission reductions generated from nuclear facilities to meet their commitments under Article 3, paragraph 1; need to promote equitable geographic distribution of project activities at regional and subregional levels.

6. GOVERNANCE Executive Board supervises the CDM, under the authority and guidance of the COP/MOP, and is fully accountable to the COP/MOP; ten members and ten alternates: one member/alternate from each of the five United Nations regional groups; two members/alternates from the Parties included in Annex I; two members/alternates from the Parties not included in Annex I; and one member/alternate from SIDS.

7. GOVERNANCE (contd) elects its own chair and vice-chair, with one being a member from a Party included in Annex I and the other being from a Party not included in Annex I. The positions of chair and vice-chair alternate annually between members from Parties included in Annex I and Parties not included in Annex I, respectively. should meet at least three times a year. However, eight (8) meetings are planned for 2002.

8. CURRENT MEMBERSHIP Africa: Member: John Kilani, South Africa, 3years Alternate: Ndiaye Cheikh Sylla, Senegal Asia: Member: M. Reza Salamat, Iran, 3 years Alternate: Chow Kok Kee, Malaysia

9. CURRENT MEMBERSHIP Eastern Europe: Member: Oleg Pluzhnikov, Russian Fed. 2 yrs Alternate: Marina Shvangiradze, Georgia GRULAC: Member: Gylvan Meira Filho, Brazil, 3 yrs Alternate: Eduardo Sanhueza, Chile

10. CURRENT MEMBERSHIP WEOG: Member: Jean-Jacques Becker, France, 3 yrs Alternate: Martin Enderlin, Switzerland AOSIS: Member: John W. Ashe, Antigua/Barbuda, 2yrs Alternate: Tuiloma Neroni Slade, Samoa

11. CURRENT MEMBERSHIP Non-Annex I: Member: Franz Tattenbach, Costa Rica, 2 yrs Alternate: Adulmushsen Al-Sunaid, Saudi Arabia Member: Abdelhay Zerouali, Morocco, 2 yrs Alternate: Xuedu Lu, China

12. CURRENT MEMBERSHIP Annex I: Member: Sozaburo Okamatsu, Japan, 3yrs Alternate: Sushma Gera, Canada Member: Hans-Juergen Stehr, Denmark, 2yrs Alternate: Georg Bosrsting, Norway

13. MEMBERSHIP CRITERIA be nominated by one of the relevant constituencies identified above and elected by the COP/MOP. Vacancies shall be filled in the same way; be elected for a period of two years and be eligible to serve a maximum of two consecutive terms. Terms as alternate members do not count. Members, and alternate members, shall remain in office until their successors are elected; possess appropriate technical and/or policy expertise and shall act in their personal capacity;

14. MEMBERSHIP CRITERIA (contd) be bound by the rules of procedure of the executive board; take a written oath of service witnessed by the Secretary-General of the United Nations or his/her authorized representative before assuming his or her duties; have no pecuniary or financial interest in any aspect of a CDM project activity or any designated operational entity; and

15. MEMBERSHIP CRITERIA (contd) not disclose any confidential or proprietary information coming to their knowledge by reason of their duties for the executive board. The duty of the member, including alternate member, not to disclose confidential information constitutes an obligation in respect of that member, and alternate member, and shall remain an obligation after the expiration or termination of that member’s function for the executive board.

16. FUNCTIONS make recommendations to the COP/MOP on further modalities and procedures for the CDM, as appropriate; make recommendations to the COP/MOP on any amendments or additions to rules of procedure for the executive board; report on its activities to each session of the COP/MOP;

17. FUNCTIONS (contd) approve new methodologies related to, inter alia, baselines, monitoring plans and project boundaries; review provisions with regard to simplified modalities, procedures and the definitions of small scale project activities and make recommendations to the COP/MOP;

18. FUNCTIONS (contd) be responsible for the accreditation of operational entities, in accordance with accreditation standards and make recommendations to the COP/MOP for the designation of operational entities; review the accreditation standards in Appendix A below and make recommendations to COP/MOP for consideration;

19. FUNCTIONS (contd) report to the COP/MOP on the regional/ subregional distribution of project activities with a view to identifying systematic or systemic barriers to their equitable distribution; and make publicly available relevant information, submitted to it for this purpose, on proposed project activities in need of funding and on investors seeking opportunities, in order to assist in arranging funding of CDM project activities.

20. WORK PROGRAM (2002) develop and agree on rules of procedure and recommend them to the Conference of the Parties for adoption; accredit operational entities and designate them, on a provisional basis, pending the designation by the Conference of the Parties at its eighth session; and

21. WORK PROGRAM (contd) develop and recommend to the Conference of the Parties, at its eighth session, simplified modalities and procedures for the following small-scale project activities: (i) Renewable energy project activities with a maximum output capacity equivalent of up to 15 megawatts (or an appropriate equivalent);

22. WORK PROGRAM (contd) (ii) Energy efficiency improvement project activities which reduce energy consumption, on the supply and/or demand side, by up to the equivalent of 15 gigawatthours per year; (iii) Other project activities that both reduce anthropogenic emissions by sources and that directly emit less than 15 kilotonnes of carbon dioxide equivalent annually.

23. BENEFITS TO SIDS/LDCs funding to build capacity for participation in the CDM; as countries which are particularly vulnerable to the adverse effects of climate change, will have priority for funding from the “share of proceeds” to meet the costs of adaptation (set at two per cent (2%) of the CERs issued for each CDM project activity); and CDM project activities in LDCs exempt from the share of proceeds.

24. SPECIFIC BENEFITS SIDS/LDCs WILL GET FUNDING THROUGH THE ADAPTATION FUND to: implement adaptation activities promptly where sufficient information is available to warrant such activities, inter alia, in the areas of water resources management, land management, agriculture, health, infrastructure development, fragile ecosystems, including mountainous ecosystems, and integrated coastal zone management;

25. SPECIFIC BENEFITS improving the monitoring of diseases and vectors affected by climate change, and related forecasting and early-warning systems, and in this context improving disease control and prevention; support capacity-building, including institutional capacity, for preventive measures, planning, preparedness and management of disasters relating to climate change, including contingency planning, in particular, for droughts and floods in areas prone to extreme weather events;

26. SPECIFIC BENEFITS strengthen existing and, where needed, establishing national and regional centres and information networks for rapid response to extreme weather events, utilizing information technology as much as possible.