BACKGROUND TO THE CDM By Philip M. Gwage

Structure of Presentation Background  Climate Change Convention  Kyoto Protocol The Clean Development Mechanism  Objective  Criteria for Participation CDM Project Cycle Global CDM Institutional Structure & Linkages  The CDM Executive Board  Participating Party  Operational Entity  Broad Functions of EB Generic National Institutional Structure & Linkages  Next Presentation will talk about this

Climate Change Convention Available scientific information indicates clearly that the global climate is changing. Observations (recent extreme weather events) confirm global warming The Intergovernmental Panel on Climate Change in its Third Assessment Report (TAR) concludes that human activities are main contributors to global warming The international community negotiated and adopted the United Nations Framework Convention on Climate Change (UNFCCC) to address:  Reduction of greenhouse gas (GHG) emissions to 1990 level by developed country parties by 2000 (stabilization of concentrations of GHGs)  Cope with negative effects of climate change (adaptation in key sectors)  Developed country parties would assist developing countries in implementing the UNFCCC

Kyoto Protocol Re-enforces commitments of all parties Commits each developed country party to further reduce their GHG emissions on average by 5.2% below its 1990 level by the year 2012 First commitment period is 2005 to 2012 Developed country parties must comply with Kyoto targets Kyoto Protocol provides three mechanisms to assist developed countries comply with Kyoto targets The Clean Development Mechanism (CDM) is

The Clean Development Mechanism CDM is an instrument of cooperation between developed and developing country parties Three main objectives:  Assist developed country parties comply with their Kyoto targets (lower cost of reduction)  Assist developing country parties achieve sustainable development  Contribute to achieving stabilization of concentrations of GHGs Criteria for participation:  Voluntary  Party to the Kyoto Protocol

CDM Project Cycle CDM Project must lead to measurable GHG emission reductions (hence need for environmental baseline) CDM project must satisfy national development criteria e.g. must contribute to poverty reduction hence need for sustainable development criteria (indicators to be used to assess contribution of project) CDM financing (sale of certified emission reduction units (CERs) is a small proportion of project costs Project developer must find ways and means of raising the bulk of the money for the project activities Main elements of CDM cycle

CDM Project Cycle