The United Nations Framework Convention on Climate Change was adopted by the Earth Summit in Rio de Janeiro in 1992 and entered into force on March 21, 1994.
Ratified by 189 countries, it recognizes the existence of climate change due to anthropogenic activities and imposes on the industrialized countries the primacy of the responsibility to fight against this phenomenon.
The Convention lays down an ultimate objective: "the stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent any dangerous anthropogenic interference of the climate system"; and "such a level should be achieved within a time frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner".
The Kyoto Protocol, adopted at the 3rd Conference of the Parties to the UNFCCC in 1997, came to fix quantified commitments of limitation and reduction of GHG emissions for the countries of Annex 1 of the Convention.
The Annex B of the Kyoto Protocol lists 38 industrialized countries being the subject of quantified agreements about the limitation of GHG emissions. The first period of this commitment to the Kyoto Protocol was fixed for the years 2008 to 2012. In an incorporated way, all the countries listed with the Annex B of the Kyoto Protocol must reduce their GHG emissions during the period 2008-2012, of 5.2% compared to those of the year 1990. This means that the emissions of the period 2008-2012 of each of the 38 listed countries must necessarily correspond to the levels of emissions listed in Annex B, in relation to the year of reference (generally those of the year 1990).
In order to make it possible for the industrialized countries to fulfill their commitments to the limitation of GHG emissions and in order to reduce the cost of this limitation, the Kyoto Protocol introduced three mechanisms of flexibility, duly described by the following articles:
Article 6 : The industrialized countries (countries of Annex I of the Convention) have the possibility to acquire Emission Reduction Units (ERUs), through projects of reduction of GHG emissions, carried out jointly (AIJ) in countries of Annex I, in transition to a market economy. ERUs "bought" will be added to the credit of the purchasing industrialized countries, being used to hold a part of their commitments related to the reduction of GHG emissions.
Article 12 : The industrialized countries have the possibility to acquire Certified Emission Reductions (CERs), through projects of "Clean Development Mechanism". The CDM is the equivalent of the AIJ, except that it applies to developing countries. The CDM projects generate of CERs, these ones will be carried to the credit of the purchasing industrialized countries, being used to hold a part of their commitments to reduce GHG emissions.
Article 17 : The industrialized countries have the possibility to exchange between themselves ‘GHG emissions credits’’. Thus, those which will have easily discharged their obligations, and thus having surpluses of rights of emissions, will be able "to sell them" to industrialized countries which will not have been able to discharge their obligations of limitation of GHG emissions.
The Kyoto Protocol does not include any commitment of GHG emissions limitations for the developing countries. On the other hand, by ratifying the Kyoto Protocol, these countries can profit from the financing opportunities coming from the CDM.
According to article 12 of the Kyoto Protocol, the objective of the CDM is triple:
To help developing countries (Non-Annex I countries) achieve a sustainable development To contribute to the ultimate objective of the Convention; i. e, the limitation of the concentrations of GHG in the atmosphere to a level so that these concentrations will not have dangerous interferences with the climate system To help the countries of Annex I of the Convention to conform to their commitment expressed in article 3 of the Kyoto Protocol, i.e., limitation of the GHG emissions during the first period of this commitment (2008-2012)
The CDM is placed under aegis of the Conference of the Parties to the UNFCCC, and is supervised by an Executive Board.
The attributions of the Executive Board (EB) were defined by the agreements of Marrakech of 2001. The EB became effective in 2002, constituting the principal actor of CDM process on the world level.
A CDM project launched in a developing country, makes it possible to reduce the greenhouse gas emissions, and results in a "commercial" transaction between two negotiating parties: The entity of the country hosting the project (developing country) which gives up the totality or part of the emissions avoided by the project and the entity of the purchasing country (an industrialized country) which purchases the avoided emissions (CERs), and adds them to its emissions credit.
The CDM, thus, allows industrialized countries to discharge more easily their commitments to the reduction of the emissions, by buying kinds of licenses, or reduction units, at much lower prices than those which would cost them if these countries were to carry out these reductions "at home". A CDM project must be necessarily approved by the contracting parties: The buyer, who comes, theoretically, from an industrialized country, and the seller, who comes from the host country.
The cycle of a CDM project requires initially, the approval of the project at the national level; this implies an approval by a national entity duly appointed by the public authorities, named the Designated National Authority (DNA).
It is, thus, the responsibility of the DNA to make sure that a given project is "eligible" for the CDM, can easily reach it, and is conform to the conditions of contribution to the sustainable development of the country.
The first conditions of access to the CDM deal essentially with five main components, which can be designated by the evaluation criteria of the CDM projects:
The objective of the CDM project. The targeted gases The targeted sectors The basic principles of eligibility The contribution to the sustainable development
The goal of a CDM project: Reduction of the GHG emissions:
To have the right to profit from CDM, a project must necessarily generate reductions of the greenhouse gas emissions.
Eligible sectors
Annex A of the Kyoto Protocol also indicates the sectors/source categories of emissions, as they emit the gases mentioned above, and which can, thus, be the subject of projects of emissions reduction. They are the five principal transmitting sectors, as described by the methodology of GHG inventory of the Intergovernmental Panel on Climate Change (IPCC):
Energy (fuel combustion in energy industries, manufacturing industries and construction, transport, and other sectors such as the residential and tertiary sectors, fugitive emissions from fuels), Waste (landfills, wastewater treatment, etc). Industrial processes, the use of solvents, Agriculture (enteric fermentation of the domestic animals, management of the manures, etc.), forestry (afforestation and reforestation).
Any CDM project must necessarily bring about real, measurable and lasting advantages in terms of reduction of GHG emissions. Theoretically, it is through the contractual document, which is the Project Design Document (PDD), that conformity to these conditions can be evaluated.
Reality of the avoided emissions
The reality of the avoidance of the emissions will be judged by comparing the situation of the project with that relating to the absence of the project.
If it is proven that what would have occurred without recourse to the project
- situation entitled baseline
– would lead to more important emissions, then the reality of the avoided emissions is proven, and the project, thus, passes the first barrier of eligibility to the CDM.
Measurability of the avoided emissions
The measurability means that, the avoided emissions can be evaluated with a minimum level of precision; this evaluation is done according to a methodology and a monitoring plan. If the total emissions of GHG relating to a project are lower than those which would have occurred in absence of the project, then the CDM project proves its contribution.
Durability of the avoided emissions
Durability means that CDM project commits itself to a lasting change, causing an irreversible avoidance of the emissions, at least during the period of the project, and under the conditions stated by the Executive Board of the CDM.
This rule guarantees that the avoided emissions are not simply "temporary" or simply arising from the economic situation, but that they are driven by a will to install a long-term change.
Contribution of CDM projects to sustainable development
The CDM, basically, grants a central place to thecriteria of sustainable development in the process of selection and the implementation of the projects; the assessment of the contribution of a project to sustainable development being the responsibility of the host country only. To evaluate the contribution of a CDM project to sustainable development, Tunisia adopted a rigorous procedure based on a multi-criteria approach. The step proposes a complete and transparent tool for examination of the projects to the decision makers, based on a quantification making it possible to appreciate, on a single and unambiguous scale, the level of contribution of a project to the sustainable development.
The PDD is the document of CDM project on the basis of which the project is registered by the Executive Board, and which will allow it to sell the avoided emissions. The development of the PDD is completely the responsibility of the project leader. The PDD must be elaborated according to a well-defined format, defined by the Executive Board.
(To download a standard PDD from the Executive Board website, please consult http://cdm.unfccc.int/). This format must be used in a STRICT way, any format deviation will, systematically, lead to the rejection of the PDD. The PDD must be EXCLUSIVELY elaborated in English.
Any CDM project must be approved by the DNA. This act marks the voluntary acceptance of the project by the hosting country, and the confirmation that it contributes to its sustainable development...
After approval by the DNA, a project must be the object of validation by a Designated Operational Entity (DOE). The DOEs are specialized organizations of attestation, specially accredited by the Executive Board for the operation of attestation. The role of which is to ascertain that the project is conform to the CDM rules, and, thus, they take the responsibility of the project validation. The choice of a DOE and the costs of its provided services related to the validation will be paid by the project leader.
The DOE will display the project on its website for a month, in order to receive potential comments from the whole world. After this period, the project leader will be able to finalize the PDD, taking into consideration the received comments. Then, the DOE will deal with the project registration request with the Executive Board. This request must be composed of the PDD, the DNA letter of approval and the validation report of the DOE. The Executive Board official response on the project registration is transmitted to the DOE in the eight weeks following the request. From this moment, the project is officially recognized as a CDM project.
The financing of CDM projects is obviously provided by the project leader.
The balance of financing is positioned at this stage of the CDM project cycle, but it could have, already, been completely assured long before.
The realization of the financing marks the beginning and the execution of the actual project.
The monitoring of the project must ensure that the project, actually, reduces GHG emissions, as mentioned in the PDD. The project leader is responsible for the follow up and the monitoring of the project.
This operation must be carried out during the whole period of the project, in accordance with its description in the PDD.
The project leader is strictly obliged to contact a DOE which will ensure the checking/certification of the avoided emissions; this latter will have to be, necessarily, different from the one which had, already, validated the project.
For the small projects we can keep the same DOE.
The list of all the accredited DOE for the verification/certification operation can be found on the Executive Board website through which you can contact them.
The DOE will work out a verification/certification report and will contact itself the Executive Board to ask for the validation of the certified emissions.
If the verification/certification report is satisfactory, the Executive Board will notify its agreement for the Certified Emissions Reductions (CERs).
At this time, the
avoided emissions are officially registered in the Executive Board “ Account Books “ or registers.
Article 6 : The industrialized countries (countries of Annex I of the Convention) have the possibility to acquire Emission Reduction Units (ERUs), through projects of reduction of GHG emissions, carried out jointly (AIJ) in countries of Annex I, in transition to a market economy. ERUs "bought" will be added to the credit of the purchasing industrialized countries, being used to hold a part of their commitments related to the reduction of GHG emissions.
