Clean Development Mechanism

The mechanism for clean development or English Clean Development Mechanism ( CDM) is one of the three designated by the Kyoto Protocol's flexible mechanisms to reduce greenhouse gas emissions. The aim of the mechanism is to developing countries - as defined by the UNFCCC (United Nations Framework Convention on Climate Change - UN Framework Convention on Climate ) are the countries that are not listed in Annex I of the UNFCCC - to help them to achieve sustainable development and contribute to the prevention of dangerous climate change. At the same time, the mechanism is intended to support the industrialized countries listed in Annex I in meeting their quantified emission limitation and reduction commitments under Article 3 of the Kyoto Protocol. Under this mechanism can implement in developing countries measures to reduce emissions and the saving will be certified. The resulting certificates (Certified Emission Reductions - CERs) can be counted towards the reduction targets in industrialized countries.

Formation

The CDM was launched as part of the Kyoto Protocol in 1997. The mechanism was negotiated as part of the negotiations on the Kyoto Protocol without much public debate during the last days of the third Conference of the Parties of the UNFCCC (COP -3). An alliance of developed countries, developing countries and the Alliance of Small Iceland States ( AOSIS ) negotiated the basics of this mechanism, only to solve several critical negotiating points: First it came to developing countries to actively participate in climate protection, but without this concrete by the imposition reduction targets, which the developing countries have not already agreed to deter. Second, developing countries wanted to achieve financial support for their own sustainable economic development through the industrialized countries. Third, the developed countries were to reach in search of an inexpensive way possible their mandatory reduction targets. Since the precise design and the practical function at the final Kyoto negotiations had not yet been worked out, the application of the mechanism, however, was delayed until agreement is reached on the modalities and procedures in Marrakech, in 2001.

Function

A reduction commitments under -lying industrial land, which is listed in Annex B of the Kyoto Protocol, in a country which is not listed, achieve through the implementation of emission reduction measures CERs. A CER is an emission reduction of one tonne of CO2 equivalent. These CERs can be credited as a result of the received emission targets. The basic idea of the CDM is that it is often more cost effective to reduce greenhouse gas emissions in developed countries to developing countries. For example, the conversion of existing industries and infrastructure in industrialized countries cost more than the sustainable development of the often only rudimentary industries in the developing countries. The financial and technological investments by Annex II countries to promote the sustainable economic development of the host countries in the same train. The CDM should be a win-win situation for both developed and developing countries in its ultimate expression. In the EU, the national reduction targets have been turned over to a large extent on private main issuers. This is done through the EU Emissions Trading Scheme (EU ETS ), which fed the demand for CERs to a significant extent. The pass-through of commitments to the private sector has meant that have participated in a number of regulated companies in the development of CDM projects.

Organization

The major policy decisions to be taken by the CDM Conference of the Parties to the Kyoto Protocol. The technical aspects of the mechanism are negotiated primarily by the Supervisory Board set up in 2001 (CDM Executive Board). It is composed of six members of the developing countries and four members of the industrialized countries. The Supervisory Board determines the rules of the Clean Development Mechanism with a 3/4-majority. In addition, the CDM Executive Board decides on the project registration and issuance of CERs.

Development of the mechanism

The CDM is designed as a bottom-up mechanism, ie, the methodologies, tools and processes have been driven primarily by project developers and only checked by the CDM Executive Board and approved. This initially led to a sluggish development. After these initial difficulties, including regulatory and financial hurdles for the project developer, had been overcome, the CDM has developed increasingly dynamic. So in early July 2013, the 7000th CDM project was registered. As part of this dynamic development of diverse experience in the implementation of climate protection projects in developing countries could be collected and there were administrative and application-related capacities for greenhouse gas emission monitoring (monitoring) built. The numerical success of the CDM has led not only to mobilize private investment in low-CO2 technologies but also revealed cost of climate protection potentials in different sectors.

Recently, this trend has been weakened. The current development of the CDM is closely linked with the overall development of the international climate and the corresponding instruments. In consequence of the non - participation of Japan, Russia, Canada and New Zealand in the second commitment period of the Kyoto Protocol and the CDM is used less and lose more and more important. Furthermore, the present ( October 2013 ) very low prices in the European Emissions Trading Scheme ( EU ETS) have a negative effect on the position of the CDM. The pressure caused by an excess supply of pollution rights falling prices of emission allowances to the top-selling emissions trading market also leads directly to a lower demand for allowances from CDM projects.

Criticism and potential

Ecological integrity

The reduction performance of a CDM project is always hypothetical, since actual emissions of the project are compared to a reference scenario (baseline scenario), which states how many emissions would have been expelled without the project. Thus hypothetical savings against real emissions are traded in the CDM market. Each CDM project that is overrated or not additionell means more emissions. A study published in 2007 estimates that 40 % of registered at the time of CDM projects are not additionally Various recent studies have also expressed doubts about the additionality of many CDM projects and in particular on large-scale infrastructure measures imposed in this regard. The CDM continues to be criticized for having particular set perverse incentives in the past. For example, industrial gas projects that have been generated almost 60 % of the CERs, often accused of artificially to increase production in order to generate by the destruction of the resulting waste products additional certificates.

Sustainable Development

Another point of criticism is that the CDM contributes little to achieve one of the most important goals envisaged, namely the promotion of sustainable development in the host countries. The main cause of this fact lies in the lack of specific international guidelines and definitions for ecological, economic and social sustainability of CDM projects. Since these criteria are a matter of national states and these often do not specify details regarding sustainability in its environmental laws and project requirements, this aspect often missing in project implementation.

Unbalanced national and sectoral distribution of projects

The geographical distribution of CDM projects is still dominated by China and India. More than 2 /3 of the projects are being implemented in these two emerging countries. The inequality overlooking the issued certificates is even greater: 75% of the previously issued certificates were earned in China ( 61%) and India ( 13%). In the squares 3-5 South Korea, Brazil and Mexico follow. In contrast, hardly any projects in the Least Developed Countries ( LDCs) and the less-favored regions of Africa can be realized. Sectoral CDM is on renewable energy, such as wind and water power, marked by projects. In view of the distributed certificates industrial gas projects dominate to avoid emissions of greenhouse particularly Hydrofluorcarbonate and nitrogen oxides. Other sectors of the economy such as the high-emission transport sector have no significant share of CDM projects. With a share of almost 60 % of all CDM projects, major projects dominate the CDM. The resulting neglect of small-scale projects leads to significant reduction and development potentials have been marginally exploited.

High transaction costs

Another problem is combined with the costs of validation and registration as a CDM project. Since this is only economical for projects with savings from approximately 15,000 tonnes of CO2 equivalents, dominate with a share of about 57 % of all CDM projects, major projects. This is the opinion of many observers in total, to the detriment of potential sustainability effects that would rather caused by a variety of small projects.

Measures to improve the CDM

In response to the presented weaknesses of the CDM various actors work hard to improve the mechanism. With regard to the ecological integrity has, for example, the EU, taken from the buyer perspective, various quality assurance measures: In the EU ETS are no certificates from projects involving industrial gases ( HFCs) and from large hydropower projects that do not comply with the stipulations of the World Commission on Dams, allowed. In addition, certificates of new projects only recognized if these projects are carried out in LDCs. In addition to state actors and other actors active in the field of quality assurance. An example is the Gold Standard Foundation, an NGO that certifies CDM projects according to clear quality standards. Furthermore, the regulations and procedural structures of the mechanism constantly discussed and further developed to counteract, for example, the uneven regional and sectoral distribution. In this context, the possibility was created many small individual actions to so-called Programmes of Activities ( PoAs ) to bundle. This particular small projects should be encouraged. PoAs reduce the procedural burden of individual projects, as only the overarching program must go through the usual CDM / JI approval procedures, but not the individual actions that take place under the umbrella of the program.

CDM Gold Standard

The CDM Gold Standard is a kind of seal of approval with a set of voluntary guidelines for CDM projects to ensure high quality of the project in achieving environment and development goals of the host country, because if during the implementation of a project in the sensitive economies of developing countries possible environmental and social criteria are considered in order to ensure sustainable development. Since this is not always guaranteed, has been developed by a number of environmental organizations, businesses and governments of the CDM Gold Standard, which applies particularly high standards for CDM projects. This standard can be applied voluntarily in a project, the added financial expense was only marginal. Conversely, are companies that buy CERs from Gold Standard -certified projects, willing to pay a premium for highly sustainable projects.

Since its introduction in 2003, over 55 non-governmental organizations have acknowledged the principles of this non-profit organization. Until early 2012, about 750 projects with potential emission reductions of 65 million tonnes of CO2 have been certified by 2015.

Film

Transactions with hot air - The trade in greenhouse gases, documenting Cornelia evil and Yüksel Ugurlu, 45 min, 2009.