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BRIEFING: Recommendations For The Review Of The Modalities And Procedures For The Clean Development Mechanism

Bonn conference centerPrepared for Subsidiary Body for Implementation, 42th Session,  1-11 June 2015

Carbon Market Watch welcomes the opportunity to provide input on discussions on the review of the modalities and procedures for the Clean Development Mechanism (CDM) – SBI agenda item 5a.

Carbon Market Watch recommendations for the CDM Review

Achieve net atmospheric benefits

  • Define net atmospheric benefit and elaborate on the specifics, e.g. that they can be achieved through, inter alia cancelling or discounting of units, and how such net benefits will be monitored and verified;
  • Provisions shall apply to binding 2020 commitments, voluntary 2020 pledges and post-2020 contributions
  • Address double counting and double claiming as a pre requisite in achieving net atmospheric benefits

Improve additionality testing

  • Establish a negative list to exclude technology types with low likelihood of additionality, high risks of perverse incentives and project types where baselines and additionality are intrinsically difficult to determine
  • Introduce additionality reassessment at the renewal of the crediting period

Shorten the length of the crediting periods

  • Shortened lengths of crediting periods to avoid issuance of credits from projects that can no longer be considered additional
  • Define the length of the crediting periods individually per project type in the respective methodology and take into account, inter alia, the rate of innovation and change in the relevant sectors as well as relevant market and socio-economic developments

Include national (E+/E-) policies in additionality testing

  • Include both E- and E+ policies in the determination of additionality and baselines for all CDM projects, including those that are already registered and need to renew their crediting period

Strengthen Civil Society Participation

  • Strengthen requirements for stakeholder involvement including the incorporation of a best practiced guideline for local stakeholder consultation
  • Establish a local stakeholder communications channel for case specific matters, both before and after the registration of CDM project activities and PoAs
  • Introduce a global stakeholder consultation at the verification stage of the CDM project activities and PoAs

Establish a CDM grievance mechanism

  • Establish environmental and social safeguards similar as provided by the REDD+ framework to be applied when financing and undertaking CDM project activities and PoAs
  • Introduce a procedure for the CDM Executive Board to forward concerns about social and environmental impacts of specific CDM project activities to the relevant DNAs for investigation and assessment
  • Introduce best practice guidance for national effective grievance mechanisms
  • Introduce reporting requirements for national level grievance processes to international bodies
  • Ensure that the appeals procedure under SBI is swiftly implemented and provides for broad legal standing

Improve the CDM’s contribution to sustainable development

  • Require that Designated National Authorities make their sustainable development benefit indicators publicly available at national and international levels
  • Define minimum global standards on sustainability and “no harm” requirements that each CDM project has to meet
  • Improve the existing SD Tool by including mandatory requirements for monitoring, reporting, and verification and a robust participation of civil society in this process
  • Exclude project types that support technologies or practices with high GHG emissions and that are associated with other high environmental and social costs e.g. coal extraction projects

Improve the membership and composition of the CDM Executive Board

  • Establish a strengthened code of conduct for Board members
  • Introduce eligibility criteria for Board members

Introduce liability rules for Designated Operational Entities

  • Establish rules and procedures under which DOEs are assigned and paid by a UNFCCC body
  • Establish rules for dealing with significant deficiencies in validation, verification and certification reports
  • Establish a grievance mechanism for cases when there is probable cause that a Designated Operational Entity (DOE) may not have performed its duties in accordance with established rules

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