Breakout session: Additionality

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Break-out session Additionality

• Joint Implementation Network
• The Netherlands
• Eise Spijker

Bangkok, Thailand 13 December 2006
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Additionality

• Purpose CDM additional emission reductions. Not
  the ones that would have happened anyway.
• Emission reductions in addition to the baseline
  (retrofit co-firing biomass in PC-plant, HFC23).
  
• CDM experience many greenfield projects (RES).
• Problems associated with baseline development
• More aggregate baselines
• Due to the weaker link between the baseline and
  the specific project additionality becomes more
  of an issue, in other words would the CDM
  activity have occured anyway?

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Baseline scenario approaches

• Global (IPCC SRES)
• Regional (ASEAN)
• National (Thailand)
• Regional (grid/off-grid)
• Sectoral (transport/industry)
• Multi-project (small-scale biogas)
• Single-project (EE, RES, etc.)
• Trade-off Environmental integrity, free-riding
  and transaction costs
• Higher aggregate level requires re-linking to
  specific project by additionality test

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The additionality tool

• Additionality tool currently under revision (4
  steps)
• Identification of alternatives to project
  activity consistent with mandatory laws and
  regulations
• Does sensitivity analysis conclude that proposed
  CDM project is unlikely to be most financially
  attractive or unlikely to be attractive?
• One or more alternative scenarios, other than
  proposed CDM activity that are not prevented by
  any barrier?
• Common practice analysis, similar but distinctive
  activities?

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The additionality tool (4 steps)

• Additionality tool (incl. simple examples)
• Identification of alternatives to project
  activity consistent with mandatory laws and
  regulations
• HFC23 project emit (without policy) or oxidise
  (with
• CDM)
• Does sensitivity analysis conclude that proposed
  CDM project is unlikely to be most financially
  attractive or unlikely to be attractive?
• HFC 23 IRR revenue with CDM (50) IRR revenue
• without CDM (-20)

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The additionality tool (4 steps)

• One or more alternative scenarios, other than
  proposed CDM activity that are not prevented by
  any barrier?
• Supercritical PC in India lacks skills to
  implement such as
• technology, although investment analysis is
  likely to be
• positive.
• Common practice analysis, similar but distinctive
  activities?
• SCPC 3 PC 50 Nuclear 20 Hydro 10 Other
• RES 17.

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Some PDD rejection reasons

• Starting date project activity (jan. 2000)
• PDD validation report submitted by DOE for
  registration were different from those approved
  by DNA
• Irrelevant and even contradictory argumentation
• General barriers described not of direct
  relevance to proposed project activity
  (additionality not proven)
• Wrong baseline meth. applied

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Assessing 4 PDDs on additionality

• Large scale CDM projects (section B23 of PDD)
• Huitengxuile Windfarm China (good)
• P.12 Assess tariff barriers! What about
  additionality if wind power receives a
  significant feed-in tariff?
• P.13 How to assess and verify the credibility of
  the claim of technology barriers?
• P.19 (under table 6) What if E- policy (feed-in
  wind) is stopped/reduced after nov. 2001?
  Baseline consequences?
• P.22 (3rd para) Are there consequences for
  additionality of frequent adjustment of baseline
  emission factors?

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Assessing 4 PDDs on additionality

• Large scale CDM projects (section B3 of PDD)
• 125 MW Windpower Karnataka India (bad)
• P.27 Since the MSP project acticity has . and
  may be a part of the baseline. Still additional?
• P.28 (2nd para) Therefore, from the above it is
  clear that, in the absence of the project
  activity, MSPL would not have undertaken any
  other alternatives. Relevant remark?
• P.35 The CDM revenues will assist.
  Investments and following para. Still additional?

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Assessing 4 PDDs on additionality

• Small scale CDM projects (section B3 of PDD)
• 6,5 MW biomass based pow. gen. India (good)
• P.12/13 assess rice husk storage and technology
  risk
• P.13 Used argumentation barriers due to
  prevailing practice also applicable in Thailand
  (clarify)?
• Additional even when considering the fact that
  the use of biomass is expected to give a
  competitive edge in energy sector. India produces
  huge quantity of agro industrial wastes (p.4
  PDD)?

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Assessing 4 PDDs on additionality

• Small scale CDM projects (section B3 of PDD)
• Los Algarrobos r.o.r. hydro Panama (bad)
• P.17 IRR with and without CERs?
• P.18 Assess arguments used under technological
  barrier!
• P.19 Assess This additionality is also in
  harmony . by means of zero emission
  technology.
• P.20 Assess According to art. 10 of law 45 ..
  must be reduced from the subsidy.

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Contact Information

• Joint Implementation Network
• The Netherlands
• Tel. [phone]
• Internet www.jiqweb.org
• E-mail jin_at_jiqweb.org