In the assessment of the substantial impact on the emissions reduction by the clean development mechanism (CDM), a large number of literatures indicate that there were concerns in the determination of the additionality of CDM projects particularly in the power sector, such as wind power, hydropower, natural gas, coal-fired power and waste heat recovery project.
Based on literatures that discuss the additionality of the CDM projects to date and financial feasibility considering the situation of low credit prices since 2013, the CERs (Certified Emission Reductions) that had been issued until December 2015 was screened by the following three evaluation criteria. (1) “Performance of internal rate of return (IRR) in investment analysis”, (2) “Specific project type and host country” and “CER prices in the PDDs and on the secondary market at the time of its insurance”. The result shows that at most 34% of the total CERs were issued from the CDM projects that have concern of non-additional project.
Moreover, industrial gas projects such as HFC reduction and N2O destruction have been pointed out that there is no contribution to the sustainable development of the host country although they are considered to be additional. The amount of issued CERs from these projects is 835MtCO2 in total by the end of 2015. Based on this fact, the CERs that have both additional and contribution to the sustainable development are estimated as 15% of the total.