Clean Development Mechanism

1. Encourage stricter practices, call for a revision of criteria
2. Support the CDM gold standard
3. Ensure strong economic incentives for clean/sustainable programs in LDCs

CDM Policy Briefing

The Clean Development Mechanism (CDM) under the Kyoto Protocol as a means to reduce global greenhouse gas (GHG) emissions is an issue at the forefront of discussions at the 13th Conference of Parties to the UN Framework Convention on Climate Change and the 3rd Meeting of Parties to the Kyoto Protocol.

SustainUS believes that CDM should foster sustainable development in developing countries through sustainable technology transfer, capacity building, and education. The progress over the past 10 years in deploying CDM projects has been significant, but limited and flawed.

In this paper, SustainUS proposes policy recommendations to promote long-term solutions through CDM; establish a voluntary framework for developing countries, refrain from approving carbon capture and storage as CDM projects; encourage CDM projects that avoid deforestation, promote afforestation and reforestation, and/or clean energy; and further education and capacity building as a means to reduce GHG emissions and achieve sustainability.

Long-term Clean Development

Create a Global Sustainable Development Fund to promote technology transfer, capacity building, and long-term clean development, especially in least developed countries and small island developing states.

Global warming is a threat that not only affects the generations of today, but one that will continue to affect subsequent generations worldwide. That burden will fall squarely on the shoulders of the youth of the world, to solve the problems that past generations have caused. As emphasized in the International Youth Declaration from Montreal 2005, international mechanisms to reduce GHG emissions must supplement, not substitute, domestic emission reductions. Climate change solutions must be long-term and sustainable. A Global Sustainable Development Fund (GSDF), aimed at promoting technology transfer, capacity building, educational program establishment, and long-term clean development should be created to replace the Special Climate Change Fund. The GSDF could be used as a financial mechanism to supplement aid from developed countries in order to support CDM projects. It is important to ensure that the technology transferred will be ecologically and technically suited to the recipient country so that recipient countries are able to develop while simultaneously reducing their GHG emissions.

Additionally, the GSDF should be used to support capacity building and education in clean and sustainable energy technologies, especially those in Least Developing Countries (LDC’s) and Small Island Developing Stats (SIDS). A 2 to 5% levy on emissions trading schemes, or any other market mechanism in replacement of emissions trading schemes post-2012, could serve as the financial mechanism for the GSDF.

CDM and a Voluntary Framework

Establish a voluntary GHG emissions target framework based on common, but differentiated responsibility to promote the involvement of developing countries, LDC’s, and SIDS in GHG emissions reductions.

A voluntary GHG emissions target framework could allow developing countries to continue to develop while achieving carbon neutrality. Such a framework would perhaps be the best way to engage advanced developing countries, such as China and India, while encouraging positive response and support from developed countries, such as the United States and Australia.

As countries globally are at various stages of development, the mechanisms by which countries reduce their GHG emissions should be country-specific. Country-specific solutions would not only honor the common, but differentiated responsibility principle, but they would also allow countries greater flexibility in the means by which they achieve GHG emissions reductions. Additionally, such voluntary targets should be relative, for example, to a country’s GDP intensity, carbon intensity, or energy intensity per capita, in order to address increasing GHG emissions from advanced developing countries like China and India. Other potential voluntary commitments include those based on the implementation of national policies and measures, such as national emission trading schemes, carbon taxes, or GHG emission-based price policies, and those based on the development, deployment, and expansion of low carbon technologies.

A voluntary GHG emissions target framework would ensure that no country that is committing itself to voluntary reduction of emissions is economically destabilized. Additionally, such a framework will strengthen participating countries’ economies, particularly those of LDC’s and SIDS, and will increase their ability to adapt to a future of scarcer carbon-based fuels. With a stronger economy, LDC’s and SIDS will be prepared to establish policies that will enable the nation to address the means of adapting to climate change.

Carbon Capture and Storage as CDM

• Refrain from pursuing carbon capture and storage – as a short-term strategy and questionable GHG emission reduction solution – under the Clean Development Mechanism or other GHG emission reduction strategies.

As global warming is a long-term threat, we believe that short-term strategies, such as oceanic and geologic carbon capture and storage (CCS), are not sustainable solutions in mitigating climate change. Although some parties claim that CCS is more cost-effective than developing low-carbon alternatives, CCS is only a short-term solution. CCS of GHG emissions requires complex tracking systems, imposes greater costs on governments and citizens, and poses long-term liability issues. CCS requires power plants to increase their energy output by 10 to 40%, thereby increasing the need for fossil fuels. The Intergovernmental Panel on Climate Change (IPCC) report on CCS states clearly that, "Although storage projects are now in operation and being carefully monitored, time is too short and overall monitoring too limited, to enable direct empirical conclusions about the long term performance of geological storage."

CDM projects are intended to foster sustainable development and technology transfer, and CCS does not meet such a criteria. In order to reduce GHG emissions sustainably, the United Nations should not endorse CCS as an avenue to reduce GHG emissions in the post-2012 Kyoto Agreement.

Avoided Deforestation and Afforestation and Reforestation Projects as CDM

Encourage avoided deforestation, afforestation, and reforestation initiatives as CDM projects.

Forests are valuable sources of biodiversity that also can serve as carbon sinks. Unsustainable forestry and agricultural practices, such as deforestation, over cultivation, and over grazing, reduce the planet’s overall GHG absorptive capacity, increase the rate of carbon release from such massive stores, and decrease the viability of the land as a long term economic source for dependent populations. Countries should establish systems of sustainable forest and land management, and incentives for avoided deforestation. These must then be incorporated into national sustainable development strategies. In addition to avoided deforestation strategies, afforestation and reforestation (A/R) projects should be incorporated into national development and GHG emissions reduction strategies and be promoted as CDM projects. A/R projects should be considered only if they aim to create an ecologically diverse ecosystem, rather than monoculture plantations. The success of such projects relies upon education and capacity building, and diverse community involvement at all levels, from project design all the way to implementation. Developing countries must feel empowered to take on their own A/R projects, regardless of whether Annex-I countries choose to pursue A/R projects through CDM or not. Although the benefits from Annex-I funding are obvious, developing countries can, too, create Certified Emission Reductions and generate their own economic returns from A/R projects. Movement away from unsustainable forestry and agricultural practices through avoided deforestation and A/R initiatives are an essential part of successfully reducing global GHG emissions.

Criteria for Renewable Energy Projects as CDM

Promote renewable energy initiatives as CDM projects.

CDM provides a means to promote sustainable development; however, the design is biased towards countries that already have a highly-polluting energy base, such as the United States. The current profile of CDM projects does not indicate that the market is willing to take the extra risk to promote renewable energy projects or less carbon intensive activities. New criteria must be developed for the approval of renewable energy projects as CDM projects as a means to encourage CDM projects that are sustainable solutions. While still requiring additionality, CDM projects should seek for environmental and social sustainability.

SustainUS believes that long-term sustainable solutions to reducing global GHG emissions must include mechanisms for clean development based on technology transfer and sharing, capacity building, and education. Enhancement of the CDM framework includes the creation of a Global Sustainable Development Fund to financially supplement CDM projects, and the establishment of a voluntary framework to increase the participation of developing countries, particularly advanced developed countries. As global warming is a long-term threat to generations of today and the future, CDM projects should also be long-term sustainable solutions. CDM projects that involve avoided deforestation, afforestation and reforestation, or clean energy development are solutions that promote carbon neutrality and sustainable development. Short-term solutions, such as CCS, should not be supported or approved as CDM projects. SustainUS believes that the policies recommended in this paper provide a means to improve the CDM framework and achieve GHG emissions reductions and sustainable development.