Clean Development Mechanism Project Activities Research Articles

Inequality, unemployment, and poverty impacts of mitigation investment: evidence from the CDM in Brazil and implications for a post-2020 mechanism

ABSTRACTArticle 6 of the Paris Agreement provides for the creation of a successor to the Clean Development Mechanism (CDM), the parameters of which are currently being operationalized. This paper uses the broad literature on the relationship between general foreign direct investment (FDI) and inequality in FDI host countries to develop expectations about the likely impact of past and future international mitigation investment on inequality, unemployment and poverty outcomes. Using 2000 and 2010 census data for small geographic areas in Brazil, we compare the change in those outcomes in areas that experienced CDM project activity to the same in areas that did not, using a difference-in-difference approach. We find that areas with CDM project activity experienced improvements in those outcomes, which appear to be driven by project types that are associated with ‘primary’ sector activity. Including measurement and reporting procedures for these broader sustainable development outcomes in the rulebook of a post-2020 agreement could be favourable to the interests of both developed and developing countries.Key policy insightsWe find evidence that CDM project activity drove reductions in inequality, poverty and unemployment in Brazilian regions from 2000 to 2010, relative to Brazilian regions where no CDM projects were present.This evidence fits with the idea that investment into primary and secondary sector activities (as opposed to tertiary sector ones) creates new demand for lower-skilled labour.Future supranational and national-level climate and emissions mitigation frameworks could take this into account at the design stage and specifically target inequality, unemployment, and poverty reduction through the new mechanism to be developed under Article 6 of the Paris Agreement.

THE PURSUIT OF CLIMATE PROTECTION AND THE UNEVEN GLOBAL DISTRIBUTION OF CLEAN DEVELOPMENT MECHANISM (CDM) PROJECTS: LESSON FROM LEAST DEVELOPED COUNTRIES (LDCS)

In this modern era of climate protection, the need for climate justice in the distribution of projects cannot be neglected or postponed. While the pursuit of climate and environmental protection, sustainable development and green technologies have become increasingly topical, issues surrounding the sustainability of the Least Developed Countries (LDCs) within the context of climate protection are being unwittingly developed and ignored. Thus, this article offers a critique of the uneven distribution of Clean Development Mechanism (CDM) projects. While most projects have gone to the emerging countries of China, India, Brazil and Mexico with opportunities for investment, unfortunately very little projects were established in the LDCs of Africa and Middle East. This prompts the question whether the CDM is fulfilling its climate protection goal, or does it currently deliver its sustainable development claim in the LDCs? Only a relatively few countries that are attractive destinations for foreign direct investment have benefited immensely from CDM projects. Consequently, this paper looks into the distribution of CDM project activities among developing countries, justification for the distribution, and examines what can be done to ensure equity among developing countries concerning the harnessing of the benefits of the CDM. Keywords: Least Developed Countries (LDCs); Clean Development Mechanism (CDM); sustainable development; climate protection; uneven project distribution.

The Action Network of Clean Development Mechanism (CDM) in China

Clean Development Mechanism (CDM) is a project-based climate mitigation scheme under the Kyoto Protocol. Since 2007, China has become the largest CDM credit supplier in the world. With the promotion of CDM projects, a flexible, consensus-seeking network that involves a variety of public and private actors has continuously been evolving. This paper provides a preliminary network analysis of how a wide range of public and private actors have been involved in the market-based CDM activities. It focuses on the development of action network and how the structural and interactive features of the network have impacted the policy outcomes. The paper concludes China has developed comprehensive action network for participating in the emission reduction activities, and the features of the network clearly reflect characteristics of Chinese political regime. Although China leads in CDM project activities, some regulatory measures may have the negative impacts on the full exertion of its potentials.

Development and application of a methodology for a clean development mechanism to avoid methane emissions in closed landfills

In Brazil, Solid Waste Disposal Sites have operated without consideration of environmental criteria, these areas being characterized by methane (CH4) emissions during the anaerobic degradation of organic matter. The United Nations organization has made efforts to control this situation, through the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol, where projects that seek to reduce the emissions of greenhouse gases (GHG) can be financially rewarded through Certified Emission Reductions (CERs) if they respect the requirements established by the Clean Development Mechanism (CDM), such as the use of methodologies approved by the CDM Executive Board (CDM-EB). Thus, a methodology was developed according to the CDM standards related to the aeration, excavation and composting of closed Municipal Solid Waste (MSW) landfills, which was submitted to CDM-EB for assessment and, after its approval, applied to a real case study in Maringá City (Brazil) with a view to avoiding negative environmental impacts due the production of methane and leachates even after its closure. This paper describes the establishment of this CDM-EB-approved methodology to determine baseline emissions, project emissions and the resultant emission reductions with the application of appropriate aeration, excavation and composting practices at closed MSW landfills. A further result obtained through the application of the methodology in the landfill case study was that it would be possible to achieve an ex-ante emission reduction of 74,013 tCO2 equivalent if the proposed CDM project activity were implemented.

A Study on Regulatory Requirements of CCS Technology Development in Taiwan

The UNFCCC COP17/CMP7, which was held from November 28th to December 9th 2011 in Durban, South Africa. The conference concluded the decision of taking modalities and procedures for carbon dioxide capture and storage in geological formations as clean development mechanism project activities. Although Taiwan is not a member state of the United Nations, the current draft of the Greenhouse Gas Emission Reduction Act of Taiwan is developing in accordance with the principles of the United Nations CDM review mechanism. We hope we can establish consistency and so as to achieve the reduction goal of the industry.The main purpose of carbon dioxide capture and storage (CCS) is to reduce the greenhouse gas emission. However, the activity will involve four issues of land ownership, environmental pollution and economic incentives. Furthermore, the impact to environment will be included four parts: geological storage site selection, storage and monitoring, infringement and liability, which depended on policy trade-offs issues. Carbon dioxide that is stored in geological formation tends to have the characteristics to spread around. This problem cannot be handled by current norms of land ownership and is prone to disputes. Therefore, based on requirements of maintaining social order and promoting public interests, it is necessary to establish relative laws and standards. This paper is to study the amendments to the current applicable laws and how to enact new provisions of the laws during CCS technology development in Taiwan under the existing regulatory framework, in order to assist the development of CCS technology.

CCS 기술의 CDM 사업화 수용에 대한 방식과 절차 분석 및 대응방안 고찰

유엔기후변화협약회의(UNFCCC)에서는 이산화탄소 포집 및 저장(Carbon dioxide capture and storage, CCS)의 부족한 경제성 확보 및 개발도상국으로의 확대의 하나의 방편으로 CCS를 청정개발체제(Clean Development Mechanism, CDM)로 수용하는 것에 대한 논의가 2005년부터 진행되었다. CCS의 CDM 수용과 관련하여 CCS 기술보유국 및 산유국과 개발도상국간의 의견차이로 인하여 합의를 이루지 못하고 논의가 거듭되다, ‘10.12월 칸쿤 회의결과, CCS의 CDM 수용 가능성에 대해 합의가 이루어졌다(CMP[2010], Decision7/CMP.6). 당시 당사국들은 CCS의 CDM 수용을 위해 방식 및 절차에 관련한 주요 이슈, 즉, 1) 저장지 선정, 2) 모니터링, 3) 모델링, 4) 경계, 5) 누수 측정 및 계산, 6) 월경 효과, 7) 연계프로젝트 배출 계산, 8) 위해성 및 안전성 평가, 9) CDM 체제하의 책임 등에 대한 합의를 우선 요구하였으며, 동기간 동안 과학·기술자문부속기구(SBSTA)에서는 의견 교환 및 워크숍 개최 등을 통해 방식 및 절차에 대한 초안을 마련하였다. 이 초안을 바탕으로 "11년 12월 남아공 더반 회의에서 마침내 CCS기술을 CDM으로 수용키로 최종 합의하였다(CMP[2011], Decision-/CMP.7). CCS의 CDM 수용은 단순히 경제적 인센티브의 제공이라는 의미를 넘어 CCS 기술이 국제사회에서 이산화탄소 저감기술로 공식적으로 인정받았다는 것을 의미하기에 국내의 관련 기술 및 산업뿐만 아니라 법·정책적 측면에서도 큰 영향을 미칠 것으로 보인다. 이에 본 논문에서는 각 이슈들에 대한 국제적 논의 동향을 분석하고, 이를 통해 현재 우리나라가 계획하고 있는 CCS 실용화를 위해 선행되어야 할 정책적 고려 사항을 도출하였다. 금번에 채택된 CCS기술의 CDM 체제 방식 및 절차에 따르면, 우리나라와 같은 비부속서 I 당사국도 방식 및 절차에서 제시한 법·제도를 수립할 경우 CCS CDM 사업 활동 수행이 가능하다. 현재 우리나라는 상위법인 ‘저탄소 녹색성장 기본법’이 제정되어 있으나 CCS CDM 방식과 절차에서 요구하고 있는 세부 법·제도 프레임웍은 미비한 상황이다. 따라서 단기적으로 포집, 수송, 저장 분야 별로 관련법 개정을 통해 CCS CDM 기반 조기 마련과 함께 장기적으로는 단일법 제정을 포함한 CDM 체제 하의 CCS 사업관련 종합적 법제도 기반을 준비할 것을 제언하고자 한다.

Optimal liability apportionment in programmatic credit-based emissions trading

The inclusion of Programmes of Activities (PoAs) within the Clean Development Mechanism (CDM) has been limited by the fact that third-party project validators, who determine the eligibility of a CDM Project Activity (CPA), are currently held liable for any certificates that are erroneously issued. As such, validators must replace any credits issued for the relevant CPA. Moreover, the risk associated with the validation of small-scale CPAs is considerably higher than that associated with traditional CDM projects. Using a simple game-theory model to model the interactions between project validators and coordinators, it is shown that shifting liability for certificates that are erroneously included – from the former to the latter – is never optimal, does not provide a strong enough incentive to enforce first-best levels of due care in CPA selection and inclusion, and can induce overprovision in validation efforts. The main problem with such a simple proportionate liability regime is that an increase in incentives for one player automatically leads to a decrease in incentives for the other. Two additional instruments are also considered that would both rectify this problem and improve the environmental integrity of the CDM mechanism.

Derechos de emisión temporales procedentes de actividades de forestación y reforestación en el EU ETS

The authors have assessed the regulatory framework set by the UNFCCC (United Nations Frame Convention on Climate Change), the Kyoto Protocol and its Flexible Mechanisms, including the CDM (Clean Development Mechanism), and the EU ETS (European Union Emissions Trading Scheme). After this general overview, the article shows how afforestation and reforestation activities have been incorporated into the CDM process and its current consideration under the EU ETS. Transaction costs of these types of CDM project activities are analyzed, together with the state of the temporary allowances market. Finally, taking into account the above mentioned elements, the authors draw several conclusions on the opportunity and expectations of the future development of this market.

The demonstration of additionality in small-scale hydropower CDM project

The Clean Development Mechanism (CDM) is one of important mechanisms to assist in achieving the mitigation target assigned in the Kyoto Protocol. However, the additionality of small-scale hydropower project activities has been a debated issue in the Parties. The method for assessing the additionality is the core for the eligibility. On the basis of Shiba hydropower CDM project, this thesis discusses the types and their essential implications of the additionalities of small-scale hydropower CDM project activities, and the rationality and feasibility of the methods for assessing additionalities, hoping to the contribution to preparation and implementation of small-scale hydropower CDM project activities in China.

Afforestation and reforestation with the clean development mechanism: Potentials, problems, and future directions

The Kyoto Protocol of the United Nations Framework Convention on Climate Change (UNFCCC) has introduced the Clean Development Mechanism (CDM) as a scheme for greenhouse gas (GHG) emission reduction through cooperation between Annex 1 Parties (investing countries), which are committed to certain GHG emission reduction targets under the Kyoto Protocol, and non‐Annex 1 Parties (host countries), which do not have any commitments to reduce GHG emissions. The eligibility of forestry projects under the CDM is limited to afforestation/reforestation (A/R) projects. A/R CDM allows Certified Emissions Reduction Units (CERs) to be purchased through carbon sequestration by afforestation or reforestation projects in developing countries. A total of 17 methodologies have been approved by the Executive Board of the UNFCCC. Out of these, 11 approved methodologies are for large‐scale A/R CDM project activities and 6 are for small‐scale A/R CDM project activities. This study identifies some potential land use changes for the development of new and approved methodologies of A/R CDM project activities. These suggested land use changes with high potential are pasture lands, landfills, mountainous areas, and mined lands. The suggested future land uses in A/R CDM project activities are due to their good potential in sequestering carbon, success in the establishment of plantation, and unavailability of the approved methodologies of A/R CDM project activities that are applicable to these suggested land uses. A total of 8 project design documents (PDD) of A/R CDM project activities have been accepted by the Executive Board and registered under the Kyoto Protocol of the UNFCCC. Some of the problems with A/R CDM project activities include the planting of large scale monoculture plantations, the planting of exotic species, and impact on the hydrology of the project areas. Future directions of A/R CDM project activities are here suggested, which are implementing mixed species in a plantation, using native species during reforestation activities, and counting the soil organic carbon pools among the carbon pools measured for carbon sequestration.

Unilateral Clean Development Mechanism – An approach for a least developed country?

Decision parameters prevailing in the market lead to a slim expression of interest of foreign investors for Clean Development Mechanism (CDM) projects in a bi- or multilateral design in Yemen. The Designated National Authority Secretariat in Yemen experiences the preference of Annex I entities of merely buying Certified Emission Reductions rather than investing in projects. Yemen's ability, like many least developed countries, to carry out unilateral CDM projects is moderate. Domestic project developers perceive difficulties in procuring underlying finance as key barrier in materializing CDM project activities in a unilateral design. The country remains trapped in a “catch 22 situation”. International assistance through low interest loans and capacity building for domestic financial institutions tailored to CDM project activities may trigger the market. Aggravation can be assisted by amending the policies of Annex I countries, in consequence to allocate a substantial share of their procurement activities to Certified Emission Reductions from least developed countries. Acquisition programmes may give preference to projects from host countries not traditionally represented in the pool of attractive CDM destinations.

District-scale prioritization for A/R CDM project activities in Indonesia in line with sustainable development objectives

The promise of the Clean Development Mechanism (CDM) to deliver its dual objectives is currently under public scrutiny. In land-use, land-use change and forestry (LULUCF) activities through afforestation and reforestation projects, known as A/R CDM, the deliverables that demonstrate sustainable development remain unclear. While the methods to convincingly demonstrate carbon benefits are fine-tuned, there is growing concern on a lack of socio-economic benefits of the projects. With the criteria for sustainable development left with the national approval process, CDM projects in a medium-income country with transparent criteria may be more supportive to the socio-economic targets of CDM than in a low-income country without further specifications. At national scale, priority areas can be identified on the basis of publicly available data on land cover and the human development index (HDI). In a case study for Indonesia we found that population density between a lower and upper limit, and risks of fire incidence are socio-economic indicators which could further guide choices within the domain of technically eligible lands (without forest cover in 1990). Within the 302 districts across Indonesia covering a land area of around 193 million ha, the eligibility criteria based on the Marrakesh Accord (later called “hard” criteria) identified 47 million ha of land. With additional (later called “soft”) criteria of a population density between 10 and 100 persons km −2 and a below-average HDI, 17.3 million ha of eligible lands distributed over 53 districts were prioritized. Differences in fire risk lead to a further stratification of clusters of similarity within this priority domain, with CDM possible at high as well as low fire risk, but requiring different types of project. By grouping districts in clusters of overall similarity of land cover, three main clusters with 7.9, 0.7 and 3.7 Mha of prioritized eligible lands were identified where pilot activities for CDM may be implemented with higher probability of development benefits and extrapolation potential.

Assessment of clean development mechanism potential of large-scale energy efficiency measures in heavy industries

This paper assesses clean development mechanism (CDM) potential of large-scale energy efficiency measures in selected heavy industries (iron and steel, cement, aluminium, pulp and paper, and ammonia) taking India and Brazil as examples of CDM project host countries. We have chosen two criteria for identification of the CDM potential of each energy efficiency measure: (i) emission reductions volume (in CO2e) that can be expected from the measure and (ii) likelihood of the measure passing the additionality test of the CDM Executive Board (EB) when submitted as a proposed CDM project activity. The paper shows that the CDM potential of large-scale energy efficiency measures strongly depends on the project-specific and country-specific context. In particular, technologies for the iron and steel industry (coke dry quenching (CDQ), top pressure recovery turbine (TRT), and basic oxygen furnace (BOF) gas recovery), the aluminium industry (point feeder prebake (PFPB) smelter), and the pulp and paper industry (continuous digester technology) offer promising CDM potential.

All CO 2 is equal in the atmosphere—A comment on CDM GHG accounting standards for methane recovery and oxidation projects

Greenhouse gas (GHG) accounting with respect to two categories of methane recovery and oxidation activities (coal bed or coal mine methane recovery and landfill gas (LFG) recovery) within the Clean Development Mechanism (CDM) is analysed. It is found that baseline methodologies approved by the CDM Executive Board apply systematically inconsistent assumptions concerning the global warming impact of carbon dioxide emissions from the oxidation of methane. One important implication of the results is that applying the baseline methodologies approved for project activities involving LFG recovery will lead to overestimation of the net GHG abatement effect of such CDM project activities.

Application of Kyoto Protocol in the Conservation of Bonobos (Pan paniscus)

The reforestation project designed for the Maringa-Lopori- Wamba region in Democratic Republic of Congo is an example of the possibile use of the Clean Development Mechanism, a flexibility mechanism of the Kyoto Protocol, for biodiversity conservation. This reforestation project was designed by applying the first and newly approved baseline and monitoring methodology for Clean Development Mechanism afforestation/reforestation project activity. The project aims to enlarge the forest habitat of bonobos (Pan paniscus), a non-human primate species sharing almost 99% of the human genome. Bonobos are endemic to the Democratic Republic of Congo and are currently under a strong risk of extinction. Implementation of the present venture as a Clean Development Mechanism project activity provides an opportunity to participate in the emission trade with emissions reduction achieved by reforestation. The proposal envisions from a reforested area of 5,000 hectares are more than 4,000,000 tons of CO2-e emissions reduction over the 30 years crediting period.

Selecting and assessing sustainable CDM projects using multi-criteria methods

Even though sustainable development has been broadly debated, the clean development mechanism (CDM) still lacks sophisticated multi-criteria decision methods for identifying, selecting and assessing CDM project activities from this perspective. Bearing in mind the huge number of CDM projects that are beginning to accumulate as the carbon market gains momentum, and the importance for non-Annex I Parties to keep focused on the sustainability objective, this article aims at developing a tool for prioritizing—within a given group, and once a specific list of sustainable development criteria is agreed upon and given—proposed CDM projects from this sustainable development point of view. We reached the following conclusions: (1) it is important to make a conscious choice of an appropriate way to normalize the sustainability performance data of CDM projects; (2) it is important to make a conscious choice of how to aggregate across multiple attributes; (3) in contrast with conventional multi-criteria assessments, which elicit preferences from a stakeholder panel, preference optimization infers from CDM projects' performance data an optimal set of weights that proponents would choose in order to win a competitive selection process. Such preference optimization methods (a) yield sensible results, simulating a range of decision circumstances, (b) avoid conflict and convey impartiality in situations where competing project proponents are likely to clash over objectionable weightings, (c) avoid cognitive overload when the number of CDM projects and/or indicators is overwhelmingly large, and (d) circumvent time-consuming and costly interviews and surveys. From a policy perspective, the multi-criteria assessment described here can be a powerful tool for prioritizing CDM projects (1) when there is a limited amount of grant funding to certain CDM project candidates, and (2) when the decisionmaking process incorporates the CDM objective of promoting sustainable development, in addition to the objective of helping developed countries to meet part of their reduction obligations as specified in Annex I of the Protocol.

Selecting and assessing sustainable CDM projects using multi-criteria methods

Even though sustainable development has been broadly debated, the clean development mechanism (CDM) still lacks sophisticated multi-criteria decision methods for identifying, selecting and assessing CDM project activities from this perspective. Bearing in mind the huge number of CDM projects that are beginning to accumulate as the carbon market gains momentum, and the importance for non-Annex I Parties to keep focused on the sustainability objective, this article aims at developing a tool for prioritizing—within a given group, and once a specific list of sustainable development criteria is agreed upon and given—proposed CDM projects from this sustainable development point of view. We reached the following conclusions: (1) it is important to make a conscious choice of an appropriate way to normalize the sustainability performance data of CDM projects; (2) it is important to make a conscious choice of how to aggregate across multiple attributes; (3) in contrast with conventional multi-criteria assessments, which elicit preferences from a stakeholder panel, preference optimization infers from CDM projects' performance data an optimal set of weights that proponents would choose in order to win a competitive selection process. Such preference optimization methods (a) yield sensible results, simulating a range of decision circumstances, (b) avoid conflict and convey impartiality in situations where competing project proponents are likely to clash over objectionable weightings, (c) avoid cognitive overload when the number of CDM projects and/or indicators is overwhelmingly large, and (d) circumvent time-consuming and costly interviews and surveys. From a policy perspective, the multi-criteria assessment described here can be a powerful tool for prioritizing CDM projects (1) when there is a limited amount of grant funding to certain CDM project candidates, and (2) when the decisionmaking process incorporates the CDM objective of promoting sustainable development, in addition to the objective of helping developed countries to meet part of their reduction obligations as specified in Annex I of the Protocol.

China's CDM Policies and Their Development Implications: Major Concerns for CDM Implementation

Abstract Most CDM (Clean Development Mechanism) opportunities exist in some large industrializing developing countries. For instance, China is estimated to take 48% of the world potential for CDM project activities. In reality, however, the share by China over the CDM projects registered and CDM projects in the pipeline is less than 10% as of Auguest 2005. This paper will examine the reasons behind, as reflected in China's CDM policies. Further investigation will be made into the use of these policies to boost the country's sustainable development, the sustainable development implications and effects of these policies. In addition, it is noted that incompatibility of some other Chinese laws and policies can be responsible for the low level and slow pace of CDM implementation in China and some suggestions are offered for promoting CDM project activities in China. There also exist barriers at the international level that impedes implementation of CDM project activities. A conclusion is drawn that CDM policies in a developing country like China aim mainly at promotion of sustainable development and to a lesser extent the generation of CERs.