Search
Close this search box.

Additionality testing differentiating between multinationals and local SMEs (Newsletter #4)

The EB will again tackle the assessment of additionality at its next meeting and will in particular discuss draft guidelines for objective demonstration and assessment of barriers. A barrier analysis requires demonstrating that barriers exist that would prevent the proposed project from being carried out if the project activity was not registered as a CDM activity.

The barrier analysis is highly subjective and many projects claim additionality based on barriers that are vague and not substantiated. The current approach has failed to distinguish additional from non-additional projects. Many projects used general financial or policy risks, such as, for example, the “risk of currency exchange rate” or the “risk of possible future decrease of feed-in tariff”. Often barriers were very subjective: In some projects the management itself was declared unable to manage a project; others just stated that the “project would go bankrupt without CERs”. Many projects used “costs” as a barrier, sometimes without indicating the magnitude of the costs or ignoring revenues from the project

Suggested improvements in the proposed guidelines concern in particular the nature of the companies and entities involved in the financing and implementation of the project. This will make a certain degree of distinction between multinationals and small project developers. Therefore, the proposal by the Meth Panel goes in the right direction but did not yet achieve the CMP mandate of developing quantitative approaches to barriers.

Although CDM Watch does not believe that project by project additionality testing can be effectively improved, it welcomes new guidelines that differentiate multinationals and local SMEs acting as project developers. In the interim CDM Watch recommends adopting the draft guidelines for the demonstration and assessment of barriers.

Action to be taken by the Board:  CDM Watch recommends the Board to adopt the proposed guidelines for inclusion in the VVM and to request the Meth Panel to continue its work on developing quantifiable approaches on a methodology-by-methodology basis.

Author

Related posts

Going for green: Is the Paris Olympics winning the race against the climate clock?

Aware of the impact of the games on the climate and of record temperatures on the games, organisers of the Paris games have pledged to break records when it comes to reducing the impact of this mega event on the planet. ‘Going for Green’, a Carbon Market Watch and éclaircies report assessing the credibility of these plans reveals that if completely implemented, only 30% of the expected carbon footprint is covered by a robust climate strategy.

Lost in Documentation

Navigating the maze of project documentation

A new report by Carbon Market Watch has raised concerns over a lack of transparency and accountability within the unregulated voluntary carbon market caused by the unavailability of important project documents from the four biggest carbon crediting standards.

Join our mailing list

Stay in touch and receive our monthly newsletter, campaign updates, event invites and more.