This document discusses transitioning projects and elements from the Clean Development Mechanism (CDM) to Article 6.4 of the Paris Agreement. Key elements that can transition include regulatory documents, institutional arrangements, projects, and certified emission reductions (CERs). Transitioning will require addressing issues such as expanding activity types, updating baselines, aligning with national climate commitments, and revising accreditation. A phased transition is proposed, with CDM elements used initially before establishing new Article 6.4 frameworks. Guidance is needed from countries to clearly define transition responsibilities and avoid gaps in emission reductions while developing new rules and systems.

1. Transition of the CDM to Article 6.4
ICAP IETA Carbon Markets Virtual Pavilion
Lambert Schneider | Berlin | 11 November 2020

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What can be transitioned?
1. Regulatory documents
2. Institutional arrangements
3. Projects
4. Certified emission reductions (CERs)

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Documents Issues to be addressed
Many elements suitable but amendments needed, e.g.
• Activities other than projects / programmes
(e.g. sectoral crediting)
• Host Party arrangements for accreditation,
methodologies and renewal of crediting periods
• Approval / authorization
• Crediting periods and conditions for renewal
• Overall mitigation in global emissions
• Avoiding double issuance
• Addressing non-permanence
• Avoidance of negative environmental and social
impacts
• Appeals procedure
⇒ At least one year for revision
Regulatory documents: PS / PCP / VVS
Transition of CDM to Article 6.4│Lambert Schneider
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Project / PoA
standard
Project / PoA
cycle procedure
Validation &
verification
standard

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Documents Issues to be addressed
Methodologies need some updating, e.g.
• Activities other than projects / programmes (e.g. sectoral)
• Ambition of baselines (below BAU)
• Consistency with NDCs and LTSs
• Host Party arrangements for methodologies and renewal of
crediting periods
• Contribution to host Party NDC
• Treatment of policies
⇒ Many methodologies, work programme of several years
Only few changes needed, e.g.
• Host Party arrangements for methodologies and renewal of
crediting periods
⇒ Revision within one year possible
Regulatory documents: Methodologies
Transition of CDM to Article 6.4│Lambert Schneider
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Methodologies
Tools
Procedure for
development /
revision of
methodologies
Guidance

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Documents Issues to be addressed
Few amendments needed, e.g.
• Competencies
⇒ Revision within one year possible
Regulatory documents: Accreditation
Transition of CDM to Article 6.4│Lambert Schneider
ICAP IETA Carbon Markets Virtual Pavilion │11 November 2020
Accreditation
standard
Accreditation
procedure
Performance
monitoring

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Documents Issues to be addressed
Option 1: Temporarily use CDM accreditation system
• Avoids duplication, simpler for DOEs and project participants
• Raises operational issues, e.g. with regard to performance
monitoring and responsibility for accreditation / suspension
Option 2: Establish new accreditation system
• Possible time delays for issuance
• Parallel operation to the CDM more cumbersome for DOEs
• May include specific guidance on new A64 requirements
Option 1: Amend CDM registry
Option 2: Develop a new registry
Option 1: Temporary use of CDM methodologies and
accreditation panel
Option 2: Establish new panels
• At least two Supervisory Body meetings necessary
Up to Parties to designate same or different institution
Institutional arrangements
Transition of CDM to Article 6.4│Lambert Schneider
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Designated
Operational
Entities (DOEs)
CDM Registry
Panels &
Working Groups
Designated
National Authorities

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Project transition
Key principles
● Host Party approval
● Compliance with Article 6.4 rules (possibly with temporary exceptions)
● Clear division of responsibilities between CDM and A64, for example:
CDM Article 6.4 mechanism
Issuance Emission reductions or
removals occurring until
31 December 2020
Emission reductions or removals
occurring on or after
1 January 2021
Registration Projects with a start of first
crediting period until to 31
December 2020
Activities with a start of first
crediting period on or after 1
January 2021
Accreditation Accreditation, suspension,
performance monitoring until
31 December 2023
Accreditation, suspension,
performance monitoring as of 1
January 2024
Transition of CDM to Article 6.4│Lambert Schneider
ICAP IETA Carbon Markets Virtual Pavilion │11 November 2020

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Possible transition schedule
Dec
2020
Article 6.4 RMPs
Dec
2021
Dec
2022
Registry
PS/PCP
Host Party transition approval Supervisory body transition approval
Issuance of A64ERs using CDM methodologies
Issuance of A64ERs using A64 methodologies
DOE accreditation by CDM DOE accreditation by superv. body
Dec
2023
Dec
2024
Dec
2025
A64 methodologies development
Host Party participation
responsibilities
Transition of CDM to Article 6.4│Lambert Schneider
ICAP IETA Carbon Markets Virtual Pavilion │11 November 2020

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Conclusions
● CMA and CMP transition guidance essential at COP26
● Clear division of responsibilities important
● No gap in claiming emission reductions
but delay in issuance unavoidable
● No need to reinvent the wheel but substantial revision of CDM
regulatory documents necessary
● Supervisory body may prioritize
‒ Implementation of A64 registry
‒ Adoption of PS / PCP / VVS, drawing on CDM elements
● Develop a detailed transition plan in 2021?
Transition of CDM to Article 6.4│Lambert Schneider
ICAP IETA Carbon Markets Virtual Pavilion │11 November 2020

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Thank you for your attention!
Dr. Lambert Schneider
Research Coordinator for International Climate Policy
l.schneider@oeko.de