Fundamentals of PDD Analysis Recap of Theory and presentation of an illustrative PDD by Steve Thorne Maputo second SSA regional workshop 17 August 2004

Content Projects and CDM project activities The PDD context The PDD theory Lessons from the development of PDDs

Project cycle

CDM activities CDM project activity income Project costs Example: PV projects Project costs Example landfill projects

Lessons PDD Section B and Annex 5(data): Baseline and additionality Section C: Crediting period Section E: Calculations of emissions in baseline, project activity, and leakage. Section D: Monitoring and verification plan Section F: Environmental impacts Section G: Stakeholder comments Annex 1: Contact details Annex 2: Information regarding public funds (from annex 1 parties (diversion of ODA)) Annex 3 and 4: new baseline and monitoring methodologies Annexures 6 – 10 Gold Standard Guidance Section A: Summary

Project boundary Section B: Project boundary, project baseline 48 options a, b, and c (bottom-up) or small-scale projects (top down).

PDD baseline In choosing a baseline methodology for a project activity, project participants shall select from among the following approaches the one deemed most appropriate for the project activity, taking into account any guidance by the executive board, and justify the appropriateness of their choice: (a)Existing actual or historical emissions, as applicable; or (b)Emissions from a technology that represents an economically attractive course of action, taking into account barriers to investment; or (c) The average emissions of similar project activities undertaken in the previous five years, in similar social, economic, environmental and technological circumstances, and whose performance is among the top 20 per cent of their category.

Project baseline and additionality B4. Description of how the anthropogenic emissions of GHGs by sources are reduced below those that would have occurred in the absence of the registered CDM project activity (i.e. explanation of how and why this project is additional and therefore not the baseline scenario.)

Additionality tool Is the project in response to/compliance with policy/national/provincial/state/ regional/local and/or corporate legislation/policy/targets? Is the project profitable under current market conditions this will depend on the project owners’ credit profile and the type of investor? Are there barriers to the project or its technology being implemented despite the project showing a viable rate of return? Project is not likely to be additional Project likely to be additional No Yes No Yes

Project boundary Difficult: “B.5. Description of how the definition of the project boundary related to the baseline methodology selected is applied to the project activity: ????

Paragrapgh 46 The baseline may include a scenario where future anthropogenic emissions by sources are projected to rise above current levels, due to the specific circumstances of the host Party.