CDM board asks UN to find ways to cut red tape

Published 22:49 on May 29, 2015  /  Last updated at 22:49 on May 29, 2015  /  International, Kyoto Mechanisms  /  No Comments

The CDM’s executive board this week agreed to ask the UN to further simply and streamline registration and verification processes in order to help reduce costs for project developers.

The CDM’s executive board this week agreed to ask the UN to further simply and streamline registration and verification processes in order to help reduce costs for project developers.

The board identified a number of areas where it wants the UN’s climate change secretariat to prepare “concrete” proposals by October’s board meeting to simplify procedures without compromising the scheme’s environmental integrity.

These include cutting the number of steps developers must take before they can receive credits and loosening requirements for CER issuance.

“This work stream could greatly reduce transaction costs and barriers for using the CDM,” said CDM-EB chair Lambert Schneider.

“The need for an even greater scale of mitigation effort is apparent and our objective is to ensure environmental integrity of projects, while avoiding getting bogged down in too cumbersome requirements.”

While the measures would likely lead to a boost in supply in normal market conditions, the lack of demand for CERs is so acute that regulators are now focused on making the mechanism more useful in the longer term.

While the CDM-EB agreed not to organise a workshop to consult with stakeholders on the proposals, it requested the secretariat also look into how to reduce paperwork requirements for PoAs while improving clarity for developers, and said it will consult stakeholders on this.

The EB’s call for the further simplification and streamlining of processes follows comments made by from UN climate chief Christiana Figueres this week, who said loosening the CDM’s monitoring rules can help ensure it survives among the patchwork of climate policy instruments that will be needed to tackle global warming.

Most CDM activities to date have been via projects at individual sites, but the mechanism has developed PoAs to bundle projects and passed several rules in recent years on “materiality” to allow developers to earn credits even where some data is lacking.

Interim UN climate negotiations resume next week in Bonn.

The CDM-EB requested the simplifying proposals to include:
– Reducing the number of steps and the timelines in the project cycle;
– Reducing steps and timelines for developing a new or revised methodology and standardised baselines;
– Balancing the accuracy and time/cost-efficiency in additionality demonstration;
– Removing restrictions that have little impact on the impartiality and objectivity of DOE validation/verification;
– Expanding the materiality concept to verification of programmes of activities (PoAs) and validation of both project activities and PoAs;
– Facilitating the processes for project activities and PoAs that have low environmental risks;
– Introducing higher flexibility in ex-post adjustment of monitoring;
– Clarifying and streamlining the post-registration change approval process;
– Simplifying “means of validation (verification)” in the CDM validation and verification standard (VVS) to allow more flexibility and rely more on the professional judgement of designated operational entities (DOEs);
– Making methodologies and methodological tools more user-friendly;
– Making quality assurance measures that are proportionate to the risk being mitigated;
– Exploring options for synergies with other international standards and procedures on accreditation.

The CDM-EB also recognised that 281 PoAs had been registered as of May 28, collectively receiving a total 2.8 million CERs so far, and it rejected a renewable energy project in Uzbekistan involving a combined cycle gas turbine plant with an estimated annual abatement capability of almost 840,000 tonnes.

By Mike Szabo and Ben Garside –