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Practical Approach for the development of standardized baselines

Gareth Phillips Chief Climate Change Officer, Sindicatum Chairman Project Developer Forum

Objectives of standardized baselines


Broad reaching objectives For example, Preamble to Decision 3 CMP6:
Noting that the use of standardized baselines could reduce transaction costs, enhance transparency, objectivity and predictability, facilitate access to the clean development mechanism, particularly with regard to under-represented project types and regions, and scale up the abatement of greenhouse has emissions, while ensuring environmental integrity

Highlights the fact that Standardized Baselines are meant to result in a significantly new approach to CDM

Compare conventional CDM with CDM under a standardized baseline


Conventional CDM
Single site / single technology Multiple site / single technology PoA Multiple site / multiple technologies challenging

These characteristics are due to the structure of the methodologies and proof of additionality Standardized Baseline CDM Standardized baselines call for scaled up action with reduced transaction costs and allow for new approaches to establishment of baselines, calculation of CER and additionality

CDM under standardized baselines


Scale
Region wide

Type
Dispersed

Example
High volume low cost technology, CFLs, cookstoves, water purifiers High cost, low volume e.g. PV, waste heat recovery Suite of technologies e.g. Energy Efficiency in buildings; transport

Baseline
Low growth rate for technology in absence of CDM Continuation of current practice, low growth rate Continuation of current practice, quantified via models

Additionality
Barriers to faster uptake

Quantification
Deemed savings per operational unit

Region wide

Site specific

E.g. Financial analysis; barrier analysis Beating the benchmark

Site specific metering and calculations; deemed savings Total GHG emissions per unit output (t CO2 per unit)

Region wide

Site specific

Practical approaches to the development of standardized baselines


1. 2. 3. 4. Select the project first, then see if CDM can be applied to it CDM revenues are likely to be a small part of the overall project budget The UNFCCC is preparing a framework for Standardized Baselines and they are also open to other proposals There is sufficient scope in the definitions of standardized baselines to facilitate new types of projects but environmental integrity is paramount Throughout Decision 3 CMP6 it is clear that DNAs are to be involved; they can engage with other entities to prepare a standardized baseline methodology Consider the demand for the resulting CERs Design a meth that works for the project, not one that fits the existing methodology guidelines, tools and conventional CDM

5. 6.

In Conclusion
Standardized Baselines present a very significant opportunity to expand the CDM Whilst moving away from the restrictions imposed by existing methodologies and tools Thank you for listening