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Purpose
The purpose of the clean development mechanism (CDM)
is defined in Article 12 of the Kyoto Protocol to the
United Nations Framework Convention on Climate Change.
The CDM has a two-fold purpose: (a) to assist developing
country Parties in achieving sustainable development,
thereby contributing to the ultimate objective of the
Convention, and (b) to assist developed country Parties
in achieving compliance with part of their quantified
emission limitation and reduction commitments under
Article 3.
Eligibility
The project proposal should establish the following
in order to qualify for consideration as
CDM project activity:
Additionalities:
| • |
Emission Additionality:
The project should lead to real, measurable and
long term GHG mitigation. The additional GHG reductions
are to be calculated with reference to a baseline. |
| • |
Financial Additionality:
The procurement of Certified Emission Reduction
(CERs) should not be from Official Development Assistance
(ODA) |
Sustainable Development
Indicators
It is the prerogative of the host Party to confirm whether
a clean development mechanism project activity assists
it in achieving sustainable development. The CDM
projects should also be oriented towards improving the
quality of life of the poor from the environmental standpoint.
Following aspects should be considered while designing
CDM project activity:
| 1. |
Social well
being: The CDM project activity should lead
to alleviation of poverty by generating additional
employment, removal of social disparities and contribution
to provision of basic amenities to people leading
to improvement in quality of life of people. |
| 2. |
Economic well
being: The CDM project activity should bring
in additional investment consistent with the needs
of the people. |
| 3. |
Environmental
well being: This should include a discussion
of impact of the project activity on resource sustainability
and resource degradation, if any, due to proposed
activity; bio-diversity friendliness; impact on
human health; reduction of levels of pollution in
general; |
| 4. |
Technological
well being: The CDM project activity should
lead to transfer of environmentally safe and sound
technologies that are comparable to best practices
in order to assist in upgradation of the technological
base. The transfer of technology can be within the
country as well from other developing countries
also. |
Baselines
The project proposal must clearly and transparently
describe methodology of determination of baseline. It
should confirm to following:
• Baselines should be precise, transparent, comparable
and workable;
• Should avoid overestimation;
• The methodology for determination of baseline
should be homogeneous and reliable;
• Potential errors should be indicated;
• System boundaries of baselines should be established;
• Interval between updates of baselines should
be clearly described;
• Role of externalities should be brought out (social,
economic and environmental);
• Should include historic emission data-sets wherever
available;
• Lifetime of project cycle should be clearly mentioned;
The project proponent could develop a new methodology
for its project activity or could use one of the approved
methodologies by the CDM
Executive Board. For small scale CDM
projects, the simplified procedures can be used by the
project proponent. The project proposal should indicate
the formulae used for calculating GHG offsets in the
project and baseline scenario. Leakage, if any, within
or outside the project boundary, should be clearly described.
Determination of alternative project, which would have
come up in absence of proposed CDM
project activity should also be described in the project
proposal.
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