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IGES Side Event for UNFCCC SB28 on
"CDM reform: proposals based on lessons learned from IGES CDM capacity building" |
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IGES held a side event for UNFCCC SB28 entitled "CDM Reform: proposals based on lessons learned from IGES CDM capacity building" on 10th June in Bonn, Germany. It was organised jointly with a special session on Japan's Emissions Trading Scheme.
In the first half of the session, a talk was given on objectives and overview of IGES' activities of CDM capacity building within Asian countries and IGES CDM-related databases and publications. Then, another presentation was given on the proposals for CDM reform based on the experiences of IGES capacity building. The last half of the session covered another topic, Japanese domestic emissions trading scheme, introduction of which is currently under consideration. Possible options of the scheme were explained, followed by questions and answers and discussion. |
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10 June 2008, 13:00-15:00 |
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Ministry of Environment Wind, Bonn, Germany |
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Takahiko HIRAISHI (Senior Consultant of IGES) |
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| Summary |
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Keisuke IYADOMI, Researcher, IGES Market Mechanism for Climate Change Project, explained IGES' CDM-related activities that consist of three fields; capacity building in developing countries, providing CDM-related information, and making proposals on CDM reform. Regarding the capacity building, he explained that IGES, supports counterparts within Asian countries in CDM project identification and development, in the procedure to register CDM projects, and in smooth operation of Designated National Authorities (DNAs). He introduced IGES CDM project databases and announced that IGES is going to enhance the databases under the corporation with UNFCCC Secretariat. He also highlighted a case where a proposal on CDM reform submitted to the CDM Executive Board by IGES jointly with the government of a partner country, was reflected to the actual change in the rule.
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Yuji MIZUNO, Market Mechanism for Climate Change Project Manager of IGES, presented his proposals on CDM reform in two areas. First one is additionality and he proposed that additionality test be removed for renewable energy projects and that these projects be automatically registered. He emphasised that, to promote projects that are not profitable without additional incentive, predictability of income flows from CERs needs to be improved. Removing additionality test, according to him, will achieve this and as a result lower the cost of CDM projects and contribute to further emissions reduction in developing countries. Second area of the proposal is an emission factor of grid-connected electricity and he proposed setting a default universal emission factor. He explained that it will lead to improving efficiency in cost as well as time. |
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Yasushi NINOMIYA, Deputy Director of Office of Market Mechanisms, Ministry of Environment, explained backgrounds and objectives of the study on Japanese emissions trading scheme, and possible scheme options that are being considered. He first addressed each of the general components of ETS such as coverage of Greenhouse gases (GHGs), scheme period, compliance rules, monitoring, reporting, and verification of emissions, and then described four possible allocation methods. One of them is upstream allocation to fossil fuel producers, importers and distributors. The other three are all downstream allocations but differ in allocated sectors. One is to large fossil fuel-derived energy and electricity users, one to power companies as per electricity and other large energy users of fossil fuels, and another to firms in terms of emissions intensity with activity-level emissions treated separately. |
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In his comment on the proposals on CDM reform, Chair Hiraishi pointed out that the complexity of proving additionality and estimating the amount of emissions reduction is one of the greatest barriers for developing countries. Vigorous discussion took place on additionality test, specifically on criteria to select types of projects that would be exempt from the test, and how to ensure the additionality of projects exempt from the test. In the discussion, it was emphasised that heightening the predictability of income flows from CDM is important to give additional incentives to project participants in developing countries. As for Japanese emissions trading scheme, participants questioned about the use of international credits for compliance and about the timeline for further study of possible schemes and selection of options. |
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| Contact |
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Market Mechanism Project, Climate Change Area
Institute for Global Environmental Strategies (IGES)
cdm-info@iges.or.jp |
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