Transcript Sectoral CDM

Possible Development of CDM
in the Post-2012 Regime
DUAN Maosheng
Tsinghua University
Beijing, Nov. 19, 2007
Outlines
1. Why CDM/flexible mechanisms
2. Proposals on future development of CDM
3. Main considerations under these proposals
4. Possible way forward
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Why CDM/flexible mechanisms
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To achieve emission reduction targets at lower economic
cost
Environmental effects and integrity, not economic or any
other concern, should always be the first consideration
Flexible mechanisms, in whatever forms, should always
follow this principle
Flexible mechanisms may be used only when necessary
and really help to solve the problem
Principles established by the convention should not be
compromised
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Proposals on future development
of CDM
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Sectoral crediting mechanism (sectoral CDM)
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Benchmark: crediting projects with emissions below
the benchmark without further additionality test
No-lose target: no penalty in case of higher emissions
and trade in case of lower emissions
Cap-and-trade
Policy CDM: crediting emission reduction policy
and measures
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Technology CDM: crediting selected technologies
without additionality test; technology transfer and
CERs transfer
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Sectoral CDM
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Benchmark
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No-lose target
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Similar to current CDM rules, while no additionality test
Crediting activities and no linkage with cap for the whole
sector
Setting of the benchmark is crucial while difficult
Suitable for sectors with homogeneous products
Arbitrary targets and not necessarily reflection of efforts
Difficulties in aspects of data collection, quantification of
individual efforts and incentives, etc.
Cap-and-trade
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A type of targets and no linkage with CDM
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Policy CDM and Technology CDM
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Policy CDM
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Additionality test of policies and measures
Quantification of emission reduction considerations
Consistence with the process of policy and measure
formulation
Technology CDM
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Promotion of technology transfer and emission reduction
efforts
Risk reductions for both sides of CER transactions
Additionality assurance through identification of real
qualified technologies and setting of baselines
Promotion of additional emission reduction efforts through
underlying certainty
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Main considerations under these
proposals
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Transaction cost
Distribution issue
Mobilization of investment for emission reduction
efforts
Catalyzing technologies
Competence concern
Further reduction of compliance cost
Broader and deep involvement
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Possible way forward
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Sectoral approaches could be a useful attempt for
broader involvement when very carefully designed
Sectoral approaches themselves do not necessarily
assure the participation of developing countries as some
major concerns of developing countries are not
addressed automatically
Pledge and review may further limit the participation
possibility of developing countries
Technical difficulty, such as data availability, verification
possibility and related capacity, could be further major
barriers
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Possible way forward
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Major emitting sectors should be chosen
Sectors with homogeneous products should be the first
choice
Public and timely availability and verification possibility of
data as well as cost should be considered
Electric power sector, iron and steel sector, cement
sector, etc. could be possible choices
Different approaches maybe suitable for different sectors
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Possible way forward
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Developing countries have been making mitigation
efforts very actively through CDM
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Underlying economic incentives could be an impetus for
small developing countries, but not for large countries
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No political risks as well as additional financial and
technical assistance could be an option for enhancing
developing country’s mitigation efforts
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The demonstration of leadership and feasibility by
developed countries should be helpful for developing
countries’ further involvement
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Thanks
[email protected]
+86 10 6277 2596
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