1. Harnessing the potential of the CDM for closing the pre-2020 gap. Latin American and Caribbean Carbon Forum, 2014 Bogotá, Colombia Hugh Sealy – CDM Executive Board Chair

2. The Emissions Gap UNEP estimates mitigation gap of at least 20 billion tonnes of CO2. 2

3. CDM - Part of the solution At COP 19 in Warsaw, ADP invited Parties to reduce the mitigation gap by offsetting their emissions with CERs. CDM could generate 3 billion tonnes of reductions up to 2020 (based on historical issuance/production of offsets/CERs). CDM registered projects could potentially contribute up to 8 billion tonnes (but still not enough to close the gap). CDM generates REAL and MEASURABLE emission reductions: net benefit Available supply: about 430 million CERs = fraction of potential supply CDM is not the sole tool, but must be part of the solution 3

4. CERs – Real and additional emission reductions CDM has global reach, and the widest selection of project types to implement. Purchase and cancellation turns an offset into mitigation, and provides funding and incentive required for further mitigation to be achieved. 4 CDM MRV and registry systems provide unique control over where CERs are generated and used/cancelled. CDM and CERs available now to anyone wishing to contribute to real mitigation action – governments, companies and individuals – through voluntary cancellation of CERs.

5. CDM: well-functioning tool CDM is delivering what it was set up to do: a)Mobilizing investment b)Reducing the cost of mitigation c)Support low Carbon development New mechanisms and approaches will require years to be implemented CDM infrastructure works, and it can be further improved and evolved as its newer features show: PoA, suppressed demand, standardized baselines… No need to reinvent the wheel. Through the CDM, Parties have access to an enormous pool of experts and institutions. 5

6. Next Steps The CDM is operational: little is needed here. So what is needed? Ambition from Parties and commitment to use the CDM as part of the tool kit. 6

7. Voluntary cancellation of CERs CERs can be used for BOTH compliance and voluntary purposes Concept of “voluntary cancellation” = effective removal of a CER from further use or transfer. 7 Voluntary cancellation can be done: By organizations or individuals wishing to show leadership by voluntarily offsetting To increase de facto mitigation (in particular by governments) To support developing countries (transfer of finance, technology, capacity-building, etc.) To contribute to closing the pre-2020 ambition gap To preserve investors’ confidence in UNFCCC mandated mechanisms

8. More positive signs ADP invited Parties to consider reducing the pre-2020 mitigation gap with CERs Carbon pricing initiatives using or considering CERs (Mexico, Chile, Costa Rica) ICAO considering CDM as a possible offset mechanism FIFA World Cup Brazil 2014 offsetting with CERs 8

9. Thank you @UN_CarbonMechs /UNCarbonMechs