Progress of the CDM

1
Introduction of information note Compilation and
analysis of available information on the scope,
effectiveness and functioning of the flexibility
mechanisms under the Kyoto Protocol
Pres-sessional workshop on the second review of
the Kyoto Protocol pursuant to its Article 9 22
23 October 2008 Athens, Greece
UNFCCC http//unfccc.int http//cdm.unfccc.int ht
tp//ji.unfccc.int
2
Outline Background Scope of
note Possible improvements to -
Institutional arrangements and governance
in relation to the Executive Board in
relation to designated operational entities
- Rules and procedures of the CDM - Joint
Implementation
3
Background Scope of note Mandate

• At its 28th session SBI requested secretariat to
  prepare an information note to compile and
  analyse available information on the scope,
  effectiveness and functioning of the flexibility
  mechanisms under the Kyoto Protocol
• SBI further requested secretariat to make the
  note available to Parties prior to this
  pre-sessional workshop
• Parties were invited to submit their views on the
  issue, which the secretariat has compiled in
  document FCCC/KP/CMP/2008/MISC.2

4
Background Scope of note Scope

• Compiles analyses information on the scope,
  effectiveness and functioning of mechanisms,
  focusing on CDM and JI
• Sections II and III consider possible
  improvements to institutional arrangements and
  governance in relation to the CDM Executive Board
  and designated operational entities
• Section IV considers possible improvements to the
  rules and procedures of the Executive Board
• Section V discusses the potential to apply these
  possible improvements to JI
• Sources
• Submissions by Parties
• Work undertaken by Executive Board JISC
• Issues identified by Parties at 5th session
  of AWG-KP

5
Possible improvements Institutional
arrangements and governance

• In relation to the Executive Board Delegation of
  technical decision-making
• Delegation to the secretariat and/or committees
  and panels established under the Board (support
  structure)
• Rationale to allow Board to focus on strategic
  and policy issues and improvements to system
• Could enhance overall efficiency
• Board would maintain full accountability
• Support structure would be accountable to Board
  and provide regular, comprehensive reporting
• Board has taken a number of steps to move in this
  direction already, with secretariat performing
  many support duties and several panels already
  having been established

6
Possible improvements Institutional
arrangements and governance

• In relation to the Executive Board Delegation of
  technical decision-making
• Specific areas where delegation could happen
• Approval of baseline and monitoring
  methodologies, development of methodologies using
  benchmarks and, assistance in developing
  methodologies where none are being proposed
• Accreditation of designated operational entities
• Registration of projects and issuance of
  certified emission reductions (CERs), including
  reviews of registration and issuances cases.

7
Possible improvements Institutional
arrangements and governance

• In relation to the Executive Board Consistency
  and transparency of decision-making
• Proposal for enhancement of the consistency and
  transparency of decision-making by the Board have
  been made
• Would reduce likelihood of value judgments and
  improve understanding of decisions by
  stakeholders
• Following measures considered
• All decisions taken classified, published and
  indexed
• Introduction of classification system for
  decisions
• Establish a formal hierarchy of decisions
• Decisions reference to previous decision
• Process for amending/replacing previous
  decisions
• All decisions and rationale to be published.
• Board has already acted or is in the process of
  concluding on some of these issues

8
Possible improvements Institutional
arrangements and governance

• In relation to the Executive Board Process for
  reviews and issuance
• Proposal for streamlining the review process so
  as to reduce or avoid delays in project
  registration
• Reconsideration of the ways in which reviews are
  made, including possible change to timelines and
  establishment of criteria for triggering reviews
  and deciding what to include in a review
• Board presently takes all decisions within the
  prescribed timelines
• Some delays are occurring due to resource
  constraints in the support structure and DOEs
  the Board is in the process of addressing these

9
Possible improvements Institutional
arrangements and governance

• In relation to the Executive Board Process for
  appeals
• Proposal for introduction of an appeals process
  for the CDM
• Appropriate body for appeals the Board or third
  body?
• If new body need to consider composition,
  competencies of members and required support
  structure
• Appeals on what due process or question
  technical issues?
• Will need criteria for what appeals may be
  brought forth and what actions can be taken by
  appeals body
• Steps will need to be taken to ensure appeals
  system not misused

10
Possible improvements Institutional
arrangements and governance

• In relation to the Executive Board Selection and
  role of members
• Proposal that members be selected to ensure Board
  possess appropriate expertise and that members
  activities need be declared
• Specific measures suggested
• Terms of reference for members to clarify their
  roles and identify restrictions
• Publication of nominations period prior to
  selection
• Separate selection process from election process
  to other constituted bodies
• Direct election of Chair and Vice-Chair by CMP to
  full-time posts
• Establishment of code of conduct to ensure
  quality of work and assure impartiality

11
Possible improvements Institutional
arrangements and governance

• In relation to the Executive Board Management of
  support to bodies
• Proposal that secretariat enhance the management
  and transparency of its resources use
• Need for more closely monitoring allocation of
  resources to activities in the support of the
  Board to ensure they are effectively focused to
  facilitate CDM projects
• Take advantage of similarities and synergies
  between the support structures of the Board and
  JISC

12
Possible improvements Institutional
arrangements and governance

• In relation to the designated operational
  entities Accreditation process
• Proposal to adopt a single standard for
  accreditation of entities
• Specific areas to consider
• Clarify roles of each stage desk review, onsite
  assessment, witnessing
• Elaborate purpose of spot checks and surveillance
  of DOEs
• Establish indicative timelines for each stage
• Address the issue of availability of projects for
  witnessing
• Establish mandatory formal training for experts
  working for DOEs

13
Possible improvements Institutional
arrangements and governance

• In relation to the designated operational
  entities Guidance provided by bodies
• Suggestion for more guidance from Board to DOEs
• Regular communication to keep DOEs informed of
  latest decisions and ensure appropriate
  understanding and interpretation of decisions
• Actions the Board presently undertaking
• Meets with representative of DOEs at each meeting
• Sends email alerts after each meeting
• Involves DOEs in development of procedures and
  guidance
• Provides substantive support to regional
  calibration meetings

14
Possible improvements Institutional
arrangements and governance

• In relation to the designated operational
  entities Quality and consistency of assessments
• Propose the Board enforce higher standards in
  results of DOEs
• Establish a system of non-compliance, leading to
  suspension or withdrawal of accreditation
• Publish statistics of DOE performance apply
  sanctions (financial or restricting right to
  further work)
• Reporting of outcomes of DOEs assessment, whether
  positive or negative
• Suggestion for publishing of all outcomes of
  validation process
• Board has initiated work on a policy framework to
  address non-compliance

15
Possible improvements Institutional
arrangements and governance

• In relation to the designated operational
  entities Selection and payment
• Propose the Board or secretariat select and pay
  for the services of DOEs
• Enhance the impartiality of DOEs and independence
  from the project participants
• Project participants would still bear the direct
  costs for each project though

16
Possible improvements Rules and procedures
of the CDM

• Additionality and methodologies
• More objective and standardized assessment of
  additionality of projects
• Specific options
• Greater standardization in the use of financial
  benchmarks
• More objective and quantitative criteria in
  project barrier analysis
• Greater use of emission benchmarks for
  demonstrating additionality
• Further enhance the objectivity and environmental
  integrity by further using sector- and
  subsector-specific benchmarks at a national level
• The Board is already exploring the subject of
  benchmark and refernce values

17
Possible improvements Rules and procedures
of the CDM

• Programmes of activities
• Suggestion to further enhance the approach to
  programmes of activities under the CDM
• Process is still in its infancy (DOEs currently
  validating five PoAs)
• Likely to be further scope for enhancing current
  rules for PoAs the Board has made a call for
  public inputs to collect information on
  experiences and challenges

18
Possible improvements Joint Implementation

• Potential to apply improvements to JI
• In principle many of the suggested improvements
  could be implemented for JI as well
• However, JI has less experience than CDM and not
  clear if changes would be warranted in the
  context of JI if were to be applied, the
  characteristics and circumstances of JI would
  need to be taken into account
• The example of delegation of technical decisions
  to support structure for example would imply a
  different scope for JI (and Track 2 only)
• As well, as there have been fewer projects that
  have received a final determination, issues of
  consistency of decision-making has not arisen in
  the process
• Overall, the specific characteristics of JI Track
  2 would need to be considered, but it would be
  possible to apply some of the proposed measures
  discussed for the CDM to JI Track 2

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• Thank you