- Transitioning from the CDM to a Clean Development Fund
- The Adaptation Fund after Poznan
- Enhanced Governance and Dispute Resolution for the CDM
|Governance Reform of the Clean Development Mechanism after Poznan
The Clean Development Mechanism is the first international attempt to address climate change using a global emissions trading market mechanism involving both developed and developing countries. When it was originally created, it could not have been envisaged that it would become so large and lucrative so quickly, creating a market in a regulated commodity that would be worth billions of euros. In 2007, the value of the CDM market was estimated to total approximately â‚¬12 billion, more than double the previous yearâ€™s figure. There are currently more than 1240 registered CDM projects in 51 countries, with approximately 3000 further projects in the fast-growing registration pipeline.
|Transitioning from the CDM to a Clean Development Fund
Grant Boyle, Jennifer Kirton, Rudi M. Lof, Tanya Nayler
Parties to the UNFCCC must work at Copenhagen toward establishing sound institutions and instruments that will serve as the foundation of international climate cooperation over the coming decades. One of the major tasks will be to assess the performance to date of the Clean Development Mechanism (CDM). The CDM is an emissions trading offset system that allows developed countries to meet their Kyoto targets by investing in emissions reduction projects in developing countries, where greenhouse gas (GHG) abatement is expected to be cheaper than it is in developed countries.
|Addressing Market Failures in the CDM: A Funding-based Approach
Rudi M. Lof
For a market to function perfectly, products need to be homogeneous and information needs to be certain and widely diffused (in addition to several other factors). However, the current market facing potential investors in the Clean Development Mechanism (CDM) fails on both of these critical issues. First, using energy generation as an example, despite evidence that would suggest that coal plants can be effectively compared to wind farms, both investors and banks typically lack the specific knowledge necessary to properly evaluate renewable energy, which makes the greenhouse gas (GHG) intensive traditional option more attractive. Second, because approval of certified emissions reductions (CERs), performance, and value post- 2012 are all uncertain, a lack of information again makes traditional, more GHG intensive technology/ methods more attractive.
|An Appellate Body for the Clean Development Mechanism: A Due Process Requirement
Moritz von Unger, Dr. Charlotte Streck
Depending on character and stake, it was with great optimism, open dismay or silent resignation that supporters of the Clean Development Mechanism (CDM) saw climate negotiators convene in Poland in December 2008. They had hoped for representatives of the Kyoto Parties to bring momentum to the discussions of recent years of how to strengthen the CDM, one of the three flexible mechanisms of the Kyoto Protocol (KP). While the continuous growth of the instrument does not exactly point to a mechanism in crisis, the CDM is at a critical stage.
|Enhanced Governance and Dispute Resolution for the CDM
Ilona Millar, Mr Martijn Wilder
During 2008, the governance system of the Clean Development Mechanism (CDM) and in particular the role and accountability of the CDM Executive Board (EB) were called into question by a number of public and private actors. In part, the spotlight on the EB had arisen due to the increased number of CDM projects coming through the CDM pipeline, resulting in a larger number of project participants with vested interests in successful project registration, but also resulting in a larger number of projects being placed under review and in some instances rejected. At the date of writing, almost 150 project activities were the subject of a request for review or were under review by the EB, and 87 projects had been rejected with a further 25 withdrawn.
|Enhancing the Role of the CDM in Accelerating Low-Carbon Technology Transfers to Developing Countries
Wytze van der Gaast, Katherine Begg
At the 3rd Conference of the Parties to the United Nations Framework Convention on Climate Change in Kyoto, Japan, in December 1997, the Clean Development Mechanism (CDM) was introduced into the Kyoto Protocol as a project-based emissions trading mechanism. Through this mechanism, industrialised countries can comply with their Protocol commitments by investing in greenhouse gas (GHG) emission reduction projects in developing countries for which they receive Certified Emission Reductions (CERs). As per November 2008, the CDM project pipeline counts 4151 CDM projects (i.e. both officially registered and ongoing projects and projects in the process of validation by a designated operational entity). The CERs can be used, inter alia, by industrialised countries to comply with their Protocol commitments and by European installations to comply with their CO2 emission caps under the EU emissions trading scheme.
|Paving the Road to Legitimacy for CDM Institutions and Procedures
Francesca Romanin Jacur
Learning from Other Experiences in International Environmental Governance
|The Adaptation Fund after Poznan
RA Ralph Czarnecki, Kaveh Guilanpour
The UN Climate Conference in Poznan, Poland, from 1 to 12 December 2008 was an important stepping stone in the negotiations on the post-2012 international climate regime that are set to conclude in Copenhagen in 2009. The decision on the Adaptation Fund was one of the most notable outcomes of the Poznan conference. The Adaptation Fund is a special fund under the Kyoto Protocol (KP), with an innovative structure to support funding of adaptation needs. However, due to organisational and legal difficulties, the Adaptation Fund had not been fully operational before the Poznan conference. The Poznan decision on the Adaptation Fund is intended to provide a solution to these obstacles.
|Exploring Uncertainties in the EU ETS: â€śLearning by Doingâ€ť Continues Beyond 2012
Marjan Peeters, Dr. Stefan Weishaar
The Commission proposal amending the EU greenhouse gas emissions trading scheme (EU ETS) was delivered hardly five years after adoption of the EU ETS Directive. The amendment of the EU ETS agreed upon politically in December 2008 strives for substantial emission reductions by 2020, and entails fundamental shifts in terms of harmonization of allocation mechanisms, large scale auctioning, and treatment of exposed sectors.
|Distributive Justice, Competitiveness, and Transnational Climate Protection: â€śOne Human â€“ One Emission Rightâ€ť
Prof. Dr. Felix Ekardt, Antonia von HĂ¶vel
Discussions about national and European climate policies are increasingly facing a major obstacle: how can climate policy be advanced without detrimental effects for (national or global) social distributive justice and how can this â€śsocially compatible climate policyâ€ť be reconciled with competitiveness concerns in a liberalized global market, particularly in the case of European climate policy if it starts to serve as a model for global climate policy? And how can this lead to a stringent, effective, and fair global climate protection regime for the period beyond 2012 (â€śKyoto IIâ€ť)?