Domestic UNFCCC Kyoto Protocol Mechanisms Project Supply Coordination Through Tendering – Lessons from the New Zealand Experience

A United Nations Framework Convention on Climate Change (UNFCCC) Joint Implementation (JI) host country has to make sure that JI projects are additional to avoid extra costs to generate the reductions necessary to cover the deduction of Emission Reduction Units (ERUs) from the country’s Kyoto Protocol emissions budget. A tender of ERUs by the government allows to generate additional reductions beyond the ERUs issued if it thoroughly checks project additionality. The government of New Zealand is running a tender for JI projects under the title “Projects to Reduce Emissions” since 2003. In two rounds, 10 million ERUs have been awarded and several projects have already entered into contracts with European buyers. The ratio of ERUs awarded to reductions achieved was 0.8 in the second tender. However it remains to be seen whether the additionality test of this tender is sufficient to exclude clearly non-additional projects.     

CDM的项目合格性识别分析

随着清洁发展机制(CDM)在全球的迅速发展,在中国也有越来越多的企业投入其中.在开发CDM项目的过程中,项目合格性的识别是第一步也是极其重要的一步,它关系到项目开发一系列步骤的顺利实施,更会对项目注册风险和减排量核证产生重大的影响.在识别项目合格性时需要考虑众多因素,其中最为重要的就是额外性分析,它是CDM项目的典型特征.另外,利益相关者的意见作为单独考虑的重要方面也需要引起足够的重视.     

Preserving Environmental Integrity in standardised baselines: The role of additionality and uncertainty

The European Union EU project PROBASE hasexplored a range of possible multi projectstandardised benchmarks as a way ofencouraging projects under Joint Implementation (JI) and the Clean Development Mechanism (CDM)by minimising transaction costs. The aim ofthis paper is to examine the environmentalintegrity of the use of standardisedbaselines and to explore the role ofadditionality. The environmental integritydepends on the uncertainty in emissionreductions, which was estimated bygenerating scenario baselines and comparingthese with the standardised baselines. Thishas allowed a comparison of selected multiproject baselines with the envelope ofuncertainty on the reductions. The projectsincluded a range of electricity supply,heat sector, cogeneration and methane(CH$_{4}$) projects in different countries. Theanalysis showed that the key uncertaintieswere in the technology fuel selection inthe baseline, the continued additionalityof the project emission reductions,uncertainties in some project emissions(e.g. spinning reserve emissions for wind)and data uncertainties. The effect on theestimation of reductions was in the range±12% to ±46% for the electricityprojects and from ±19% to ±57%for the heat and Combined Heat and Power CHP sector projects.Comparison with the envelope of uncertaintyfor the range of projects showed that multiproject electricity sector baselines whichhave been weighted or use high technologyperformance benchmarks (e.g. Organization for Economic Cooperation and Development OECD)can provide conservative estimates buttheir general nature can lead to variationsbetween countries. We would recommend thatthe country-specific context must be takeninto account so that standardised baselinesfor the electricity sector are generated onthe basis of country specificcharacteristics, the project type, andwhether it provides new or existing demand.The conservative scenario produced shouldthen be weighted. Whereas weightings havebeen applied to account for uncertaintiesor to bias towards renewables, we havesuggested a weighting factor of 25% on theelectricity baseline for large projectsbased on an analysis of the effect ofnon-additionality on emission reductionuncertainty. For heat projects, theappropriate benchmark is a technology/fuelbenchmark which is deemed relevant for theheat sector in that (part of the) country.Again we suggest that a weighted sectorbaseline is required to take account of theuncertainties. These recommendations applyto large projects only for a 10-yearcrediting lifetime.     

Elements of a certification system for forestry-based carbon offset projects

Implementation of the Kyoto Protocol will require theestablishment of procedures for monitoring,verification and certification of carbon offsetprojects. In this paper, the steps required forindependent certification of forestry-based carbonoffset projects are reviewed, based on the proceduresused by the international certification companySociété Générale de Surveillance.Firstly, a project must be evaluated for itssuitability in relation to eligibility criteria of theKyoto Protocol. These eligibility criteria areclassified under four headings: (a) acceptability tohost country parties and international agreements; (b)additionality, in terms of demonstrated positivegreenhouse gas effects additional to the`business-as-usual' case; (c) externalities orunwanted side effects; and, (d) capacity to implementproject's activities. Secondly, the scientificmethodology for calculating the carbon offsets and themethodology for data collection and statisticalanalysis must be evaluated. Additionally, the amountof carbon offsets quantified must be adjusted toreflect the uncertainty associated with themethodology and data used. Only when these steps havebeen completed can carbon offsets be certified.Finally, the paper discusses the importance ofstandardization of methods and procedures used forproject monitoring and verification, and the need foraccreditation to ensure that the activities ofcertifiers are regulated.     

天然气发电工程CDM项目开发的探讨

通过对浙江省能源集团公司镇海发电厂在天然气发电工程CDM项目开发方面的具体实践,论述了对于天然气发电的基础线和监测方法学的研究与应用,以及在开发应用过程中的主要注意事项.     

Cost shifting and other perverse incentives in biodiversity offsetting in India

Biodiversity offsetting aims to compensate for development‐induced biodiversity loss through commensurate conservation gains and is gaining traction among governments and businesses. However, cost shifting (i.e., diversion of offset funds to other conservation programs) and other perverse incentives can undermine the effectiveness of biodiversity offsetting. Additionality—the requirement that biodiversity offsets result in conservation outcomes that would not have been achieved otherwise—is fundamental to biodiversity offsetting. Cost shifting and violation of additionality can go hand in hand. India's national offsetting program is a case in point. Recent legislation allows the diversion of offset funds to meet the country's preexisting commitments under the United Nations Framework Convention on Climate Change (UNFCCC) and United Nations Convention on Biological Diversity (CBD). With such diversions, no additional conservation takes place and development impacts remain uncompensated. Temporary additionality cannot be conceded in light of paucity of funds for preexisting commitments unless there is open acknowledgement that fulfillment of such commitments is contingent on offset funds. Two other examples of perverse incentives related to offsetting in India are the touting of inherently neutral offsetting outcomes as conservation gains, a tactic that breeds false complacency and results in reduced incentive for additional conservation efforts, and the clearing of native vegetation for commercial plantations in the name of compensatory afforestation, a practice that leads to biodiversity decline. The risks accompanying cost shifting and other perverse incentives, if not preempted and addressed, will result in net loss of forest cover in India. We recommend accurate baselines, transparent accounting, and open reporting of offset outcomes to ensure biodiversity offsetting achieves adequate and additional compensation for impacts of development.     

Offsetting the Impacts of Mining to Achieve No Net Loss of Native Vegetation

Offsets are a novel conservation tool, yet using them to achieve no net loss of biodiversity is challenging. This is especially true when using conservation offsets (i.e., protected areas) because achieving no net loss requires avoiding equivalent loss. Our objective was to determine if offsetting the impacts of mining achieves no net loss of native vegetation in Brazil's largest iron mining region. We used a land‐use change model to simulate deforestation by mining to 2020; developed a model to allocate conservation offsets to the landscape under 3 scenarios (baseline, no new offsets; current practice, like‐for‐like [by vegetation type] conservation offsetting near the impact site; and threat scenario, like‐for‐like conservation offsetting of highly threatened vegetation); and simulated nonmining deforestation to 2020 for each scenario to quantify avoided deforestation achieved with offsets. Mines cleared 3570 ha of native vegetation by 2020. Under a 1:4 offset ratio, mining companies would be required to conserve >14,200 ha of native vegetation, doubling the current extent of protected areas in the region. Allocating offsets under current practice avoided deforestation equivalent to 3% of that caused by mining, whereas allocating under the threat scenario avoided 9%. Current practice failed to achieve no net loss because offsets did not conserve threatened vegetation. Explicit allocation of offsets to threatened vegetation also failed because the most threatened vegetation was widely dispersed across the landscape, making conservation logistically difficult. To achieve no net loss with conservation offsets requires information on regional deforestation trajectories and the distribution of threatened vegetation. However, in some regions achieving no net loss through conservation may be impossible. In these cases, other offsetting activities, such as revegetation, will be required. Compensación de los Impactos de la Minería para Obtener Ninguna Pérdida Neta de la Vegetación Nativa     

Reside0ntial solar water heating as a potential Clean Development Mechanism project: A South African case study

A community-based Clean Development Mechanism (CDM) project – asolar water heating project in a low-income community in South Africa –is analysed to illustrate the methodological and policy challenges that faceimplementation of the Kyoto Protocol to the United Nations FrameworkConvention on Climate Change. We evaluate four baseline options, andthree potential CDM interventions. The emissions reductions range from –670 to +5 929 Mg CO₂ per year, with all option but oneshowing positive emission reductions. Using metered solar water heatingwith liquefied petroleum gas back-up as the CDM intervention, and electricstorage geysers as the baseline, the annual emissions reductions are 5686 Mg CO₂. The cost-effectiveness from the national perspective,which is the incremental life cycle costs divided by the lifetime emissionsreductions, is –$18 per Mg CO₂ From the perspective of theCDM investor, however, the cost-effectiveness is $5.2 per mgCO₂, assuming that the investor receives all of the carbon credits forproviding the incremental capital investment. From our analysis, weconclude that using the current technology (kerosene stoves) as a baselineis probably not appropriate because it does not reflect likely future trendsand also penalises the community for their poverty and current lack ofinfrastructure. We also highlight the importance of credit sharing, and howit affects the cost-effectiveness of the project from the CDM investor'sperspective. The lessons from this analysis are important for the currentinternational policy debate on how to preferentially treat small-scale CDMprojects.