1. The CDM Project Activity Cycle UNFCCC CDM joint workshop 21-22 March 2003 Bonn Kai-Uwe Barani Schmidt UNFCCC/Cooperative Mechanisms kschmidt@unfccc.int Franz Tattenbach Member CDM Executive Board Vice Chair CDM Meth. Panel

2. Background Negotiations challenge: make it conducive to private sector / intergovernmental decision making / environmental integrity Outcome(!simplified!): Delegated system whereby Executive Board approves methodologies and accredits designated operational entities (DOE). DOE registers project activities which apply approved methodologies subject to a request for review by the Board or Parties involved

3. CDM project Cycle Institutional Setup COP/MOP Companies (private/public)

4. CDM project activity cycle Design PP DOE EB PP DOE EB DNA CER Validation/registration Monitoring Verification/certification Issuance AE 0 EB&COP/MOP DOE

5. PP DOE EB PP DOE EB DNA CER Design of a CDM project activity Baseline and monitoring methodology –(new or approved) Information to be provided (Appendix B / CDM-PDD) Sustainable development (info with DNA of host?!) Preamble: –Transfer of sound and safe technologies –No diversion of ODA

6. PP DOE EB PP DOE EB DNA CER Validation / Registration Designated operational entity Validation process –(new or approved methodology) Validation requirements Designated national authority –Written approval prior to submission of request of registration Registration by EB: –An automatic step unless a review is requested within eight weeks by one Party involved or three board members

7. PP DOE EB PP DOE EB DNA CER Monitoring Project participant or third party Provisions for the monitoring plan(MP) / Monitoring methodology Implementation of MP condition for verification-certification and issuance Monitoring report

8. PP DOE EB PP DOE EB DNA CER Verification – certification Designated operational entity –Verification: Ex post determination –Certification: written assurance Monitoring report: DOE to make publicly available Verification process Verification report Certification based on verification Verification and certification report publicly available

9. PP DOE EB PP DOE EB DNA CER Issuance Certification report submitted to EB by DOE is a request for issuance Issuance final after 15 days if no request for review of DOE because of fraud, malfeasance or incompetence of DOE CDM registry administrator issues and withholds share of proceed for administration and adaptation

10. Design/validation/ registration PP Repository of approved methodologies New idea s Design/

11. PP DOE EB PP DOE EB DNA CER GHG t If GHG of proposed CDM project activity smaller than GHG of baseline -> additional CERs Baseline = the scenario that reasonably represents what would occur in the absence of the registered project activity => methodology to determine (para. 44) Additionality and baseline methodology Additionality is defined in terms of GHG emissions (para. 43) CDM project activity

12. Information to be provided Appendix B / PDD: –Summary of comments by local stakeholders and how due account was taken of them ; –Documentation on analysis of environmental impacts ; – Additionality and Baseline and monitoring methodologies conform with requirements of M&P; –Provisions for monitoring, verification and reporting conforms with requirements of M&P In addition, –Letter of approval by Parties involved (SD confirmation by Host Party) M&P: Modalities and procedures of the CDM

13. Design/validation/ registration Rejects if not conform with validation requirements else forwards Submits CDM-PDD OEx OE1 OE2 … OEn Two cases New methodology Approved method. UNFCCC: Parties, stakeholders, accredited NGOs 30 days comment period on validation requirements after OEx makes CDM-PDD public PP to provide to OE written approval of voluntary participation by DNA of each party involved Submits request to EB for registration Registration CDM proj. activities Project 1 Project 2 … Project n UNLESS Review is requested If requested within 8 weeks by either one Party involved or at least three board members. Automatic Rejects new method. EB registration validation/ PP Repository of approved methodologies New idea s Design/

14. Verification - certification and issuance: flow chart PP OEx* OE1 OE2 … OEn PP contracts Monitoring report(s) * An OE may be allowed by the EB to perform validation and verification and certification for the same CDM project activity UNLESS Review is requested If requested within 15 days by either one Party involved or at least three board members. Only fraud, malfeasance or incompetence of OE! Assigns Ser. No -Collects SOP -Issues into registry accounts Issuance by EB VERIFICATION activities Monitoring data Site visits if deemed necessary by OEx CERTIFICATION report =request for issuance Monitoring Report Verification Report Certification Report CERs

15. CDM project Cycle Roles and responsibilities COP/MOP Provide info Confirm that requirements are met Implement Certify ERs Companies (private/public)

16. Legend PP =project participants; AE = an applicant entity EB = executive board of the CDM DOE = designated operational entity (Any private or public body that has been accredited by EB and designated by COP/MOP) DNA = designated national authority for the CDM (The request for registration needs to include a written approval of voluntary participation by the DNA of each Party involved) CER = certified emission reductions M&P = Modalities and procedures of the CDM