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042009 Cdm In The Philippines Promises And Realities Neth Dano
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042009 Cdm In The Philippines Promises And Realities Neth Dano


Cdm In The Philippines Promises And Realities …

Cdm In The Philippines Promises And Realities
Neth Dano
National Grassroots Conference on Climate Change
Balai Kalinaw, UP Diliman
20-21 April 2009

Published in News & Politics , Technology
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  • 1. Clean Development Mechanism (CDM) in the Philippines: Promises and Realities Neth C. Dano Third World Network
  • 2. What Articlethe CDM? • Defined in is 12 of the Kyoto Protocol • A flexibility mechanism that allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol (Annex B Party: developed countries) to implement an emission-reduction project in developing countries • Such projects can earn saleable certified emission reduction (CER) credits, each equivalent to one ton of CO2, which can be counted towards meeting Kyoto
  • 3. What is the CDM? • It is the first global, environmental investment and credit scheme of its kind, providing a standardized emissions offset instrument (CERs) • The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction or limitation targets
  • 4. What is the CDM? • Allows developed countries (Annex 1/Annex B) to earn certified emission reduction units (CERs) that can be applied to partially meet their greenhouse gas emissions reduction commitments under the Kyoto Protocol whenever they undertake emissions reduction projects that contribute to sustainable development in a non-Annex I Party where land, technology and labor are less costly, which result in real, measurable, verifiable and long-term greenhouse gas reductions that are additional to any that would otherwise occur
  • 5. CERS FROM CDM Host Party w/ no Annex I A total emission cap of emission cap Party will an Annex I Party get CERs Acquired CERs are GHG Emissions Projection CERs added and emission cap increases GHG Emissions Non-Annex I / Host Parties will benefit from project activities resulting in CERs Baseline Project Sustainable Scenario Scenario Development Specific Place in a CER = 1 metric ton of CO2-e Host Party CDM in Charts. IGES. July 2007. Photo fr www.vueweekly.com
  • 6. How the CDM works • A CDM project must provide emission reductions that are additional to what would otherwise have occurred • Projects must qualify through a rigorous and public registration and issuance process • Approval is given by the Designated National Authorities
  • 7. How the CDM works • The mechanism is overseen by the CDM Executive Board, answerable to the countries that ratified the Kyoto Protocol • Operational since the beginning of 2006, the mechanism has already registered more than 1,000 projects and is anticipated to produce CERs amounting to more than 2.7 billion ton of CO2 equivalent in the first commitment period of the Kyoto Protocol, 2008–2012 7
  • 8. Conditions for CDM Projects • Assist developing country Parties in achieving Sustainable Development • Considered as “Additional” if greenhouse gas emissions are reduced below the level that would have occurred in the absence of the registered CDM project activity • Public funding from developed country Parties must not result in the diversion of ODA and separate from and not counted towards their financial obligations under UNFCCC and Kyoto Protocol • PDD, Validation Report and Letter of Approval from Host Country are required in order to be registered as CDM
  • 9. CDM Project Cycle Project participants Design National Operational Entity Validation / Authority Executive Board registration Project participants Monitoring Operational Entity Verification / certification Executive Board Issuance CER
  • 10. CDM TIMESCALE Time required CDM process For regular For small-scale project project Project Development: New methodology production ~ 6 months Usually not and approval required a 1-2 months 1-2 months The PDD production The DNA approval (Philippines) 20-25 working 15-20 working days days Validation 1 month 1 month UNFCCC public comments 1 month 1 month Registration 8 weeks 4 weeks assuming ALL necessary information is available. a
  • 11. CDM in the Philippines • CDM projects registered at CDM executive board: 21 • CDM projects approved by the Philippines’ DNA: 59 • CDM projects at or after the validation stage: 47 • See IGES updates for details 11
  • 12. Key Issues in CDM • Processes and requirements are too costly, burdensome and centralized • Requires big investments from the proponents to start up a project, prove additionality, and have it verified, validated and registered – Verification is done by UNFCCC-accredited foreign DOE whose costs are borne by the proponents 12
  • 13. Key Issues in CDM • Resource-poor proponents cannot comply with CDM process, costs and requirements • Small scale project participants are at a disadvantage in terms of CER pricing • Results: – Elite capture in developing countries with CDM projects – Concentration of CDM projects in big developing countries – Virtually no CDM project in Africa and LDCs 13
  • 14. Key Issues in CDM • Questions on the methodological and technical verification processes in measuring greenhouse gas emissions in CDM projects • Inadequate and subjective documentary evidences to support the justification for additionality of a project activity 14
  • 15. Key Issues in CDM • Cases of corruption involving DOE and proponents – spurious projects – questionable evidences of “additionality” – manipulation of methodologies to increase CERs – connivance between DOE, DNA and proponents 15
  • 16. Key Issues in CDM • Emergence of a “CDM industry” that virtually controls the development of projects in developing countries and the marketing of CERs in the carbon market – In the Philippines, PhilBio facilitated more than 90 percent of CDM projects – EcoSecurities has virtual monopoly of the trading of CERs from CDM worldwide • Economic returns are dependent on the 16 price of carbon in the market
  • 17. Key Issues in CDM • Lack of clear criteria for demonstrating high sustainable development contribution of project activities to ensure that the DUAL objectives of the CDM are met and CERs from such projects with high SD benefits are accorded first-rate values • Questionable sustainable development value • Misappropriation of “sustainable development” to describe superficial community benefits – Examples: Construction of basketball courts and waiting sheds, contribution to local beauty pageants, payment of local taxes, etc. 17