Future Approaches for Efficient Clean Development Mechanism (CDM)
Explore the complexities and challenges of the existing CDM system, reflecting on the multi-faceted objectives and assessing achievements. Learn about the current status of CDM projects, the risks involved, and the differences between private sector and small/medium enterprises. Discover suggested methodologies for improving CDM processes and enhancing efficiency, emphasizing the importance of materiality in methodology components. Dive into proposed step changes in methodology development and application, with a focus on clean development concepts and financial analysis considerations.
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Presentation Transcript
+ Future Development UNFCCC Joint Workshop March 2011 Ciska Terblanche
Content Introduction CDM and Risk Future Development 1
Introduction To propose future improvements a thorough understanding of the complexities of the existing system is critical Reflect on the multi-facetted objectives of CDM and assess whether we are achieving the clean development objective compared to simply emission reductions from existing operations Question what can realistically be achieved by CDM and then focus on developing mechanisms to achieve this 2
Current Status: CDM & RISK Business require a relatively stable environment for investment Increased Project Risk associated with any normal project when it contains a CDM component Access to Finance proof The time from CDM initiation to issuance is typically 4 years 3
Private Sector vs. S/M Enterprises Private CDM projects are associated with high reputational risk One unsuccessful project could potentially damage the international reputation of a company S/M Enterprises Cost and Development time 4
Future Approaches Suggested General Methodologies and the processes it involves are critical to make the CDM process more efficient Valuable if people involved in Methodology processing and approval have project development experience Approach that Methodology developer/Project developer is guilty until proven innocent needs to change Materiality of methodology components & parameters should be assessed and methodologies should be constructed with this in mind 5
Future Approaches Suggested Step Change in the Approach in which methodologies are developed and applied The structure and principles adopted in existing methodologies should not necessarily be used as a basis for approving new ones Monitoring approaches could to be standardised in a rational way, focusing more on taking into account materiality Apply the concept of clean development , i.e. focus on Green field projects and not only on switching from an existing more carbon intensive regime to a less carbon intensive regime Financial analysis is moving further away from what is used in reality for decision making this needs to be addressed 6
LDCs, Resource Distribution and Electrification, Clean Development Positive list of equipment that are additional by default 1.4 billion people have no access to electricity, 99% in developing countries Sub-Saharan Africa the electrification rate is 31% (IEA 2010) Fossil fuel distribution concentrated in developing countries One can quite safely assume that as countries develop they will utilise their primary fossil fuel resources 7
Thank You Ciska Terblanche +27828985750 8
