International Energy and Climate Policy - CDM

Clean Development Mechanism

As stated in the Kyoto Protocol, the aim of the Clean Development Mechanism (CDM) is to promote sustainable development of Non-Annex I countries while enabling Annex I countries to cost-effectively meet part of their Kyoto commitments through abatement projects in developing countries. ECN’s active role in promoting this double dividend of the CDM results in research, publications and management activities on different topics:

The project Balancing the carbon market analyses impacts on supply and demand of carbon credits in case non-Annex I countries make an own contribution to GHG mitigation.
Differentiation in the CDM: options and impacts gives an overview of how the CDM can improve its contribution to sustainable development, improve regional distribution and create net atmospheric benefits (e.g. by CER discounting), and its implications regarding political feasibility and credit supply. A very successful COP 14 side event where draft results were presented was held in Poznan on December 4th; Presentations and programme are available. 

Analysing the GHG abatement options and their related costs across various sectors of the economy in non-Annex I countries, and thus estimating the supply-potential for the CDM market. Mitigation options that are the base for estimates of carbon credit availability are collected in comprehensive databases, which are regularly updated and extended as new evidence arises and technologies mature.
The most recent results can be found in the report ‘Carbon credit supply beyond 2012’, which builds on work previously carried out in the TETRIS project. The studies show a large reduction potential for the non-Annex I countries, and identified GHG abatement options can be obtained at less than 50 $/tCO₂-eq, and many of the options even at much lower costs. This implies significant opportunities for Annex I countries to utilise the CDM for future climate commitments.

Enhancing local capacity in energy planning, renewable energy policy, mitigation analysis, and climate policy are the focus of projects carried out in partnerships with developing countries.
Through its CCS-Africa project, ECN has recently organised two workshops on CO₂ capture and storage and CDM in Senegal and Botswana.
The CURB-AIR project identifies local projects on urban air pollution reduction and stimulates multi-level government capacity building and the dissemination of the results to other cities in the region.

Small scale CDM and the main existing barriers that prevent the realisation of its potential were at the centre of an analysis carried out by ECN and IT Power: the financial barriers, the institutional barriers and the lack of capacity in India to develop small scale CDM projects as well as several specific risks considered by project developers are discussed.
The report 'Realising the potential of small-scale CDM Projects in India' presents an analysis of the potential reduction in transaction costs that can be achieved through bundling of individual projects into a single CDM project. The main conclusion is that for projects generating up to 10,000 tons CO2 reduction per year, the UNFCCC simplified procedures for small-scale CDM do not sufficiently reduce transaction costs to make these projects attractive for investors. Bundling of such projects would further reduce transaction costs and would be an attractive option only if the individual projects are metered which reduces significantly the cost of verification.
See also Making small-scale CDM work pre 2004.

Ongoing and Recent Projects

• Opportunities for transatlantic energy and climate policy, with NREL.
  Read more
• International support for domestic action, with Cambridge University.
  Read more
• Balancing the carbon market.
  Report
• Capacity building and awareness raising for CDM and CCS in Africa 
• Technology Transfer  and Investment Risk in Emissions Trading (TETRIS) 
• Organisation and consultancy SB-24 workshop on CCS and CDM
• CDM and urban air pollution: partnerships enhancing synergies in urban air quality and Kyoto mechanisms in Asia (CURB-AIR)
• Earlier projects

For more information please contact: Stefan Bakker

Publications

• How to include CCS in the CDM? Baseline methodologies and institutional implications. November 2008.
• Advancing CCS and CDM in Africa. Outcomes of two workshops in Africa
  Bakker, S.J.A.; Coninck, H.C. de; Ba, L.; Zhou, P.P. , 2007
• Carbon credit supply potential beyond 2012. A bottom-up assessment of mitigation options
  Bakker, S.J.A.; Arvanitakis, A.G.; Bole, T.; Brug, E. van de; Doets, C.E.M.; Gilbert, A., 2007.
• Technology transfer in the Clean Development Mechanism
  H.C. de Coninck, F. Haake, N.H. van der Linden, 2007.
• Earlier publications