| Clean Development Mechanism
CDM was established in 1997, which enabled Annex I countries to meet their reduction targets at lower costs through projects in developing countries. Developed countries will receive the credits for the resulting emmission reductions through their investment in low cost abatement opportunities in the developing countries. This is an opening for developing countries also to initiate sustainable development projects as they can trade their emmission reductions. One tonne of CO2 reduced through a CDM project, certified by designated CDM valuator, is known as a CER and can be traded. Thus CDM offers an opportunity to make progress simultaneously on climate, development, and local environment issues.
CDM is an acceptable tool to Annex I countries as significant reduction in emissions can be achieved by relatively lesser investment. However no country is allowed to achieve 100% of their emission reduction target by purchasing CERs. Aim of CDM is to increase the economic efficiency of achieving GHG emission reduction.
All CDM projects must result in a net GHG reduction. Typical CDM projects fall into the following categories.
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Renewable energy
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Fuel switching (in industry, transport, residential sector etc.)
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Solid waste management
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Advanced coal-based power generation technologies
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Renovation and modernization
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Demand-side management
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Industrial energy efficiency improvement
CDM Project Requirement
A CDM project can be drafted as per the requirements mentioned in the 'Clean Development Mechanism Project Design Document' (CDM-PDD). The CDM-PDD can be obtained electronically through the UNFCCC CDM web site ( http://unfcc.int/cdm). It elabrotes on the outline of information in "Project Design Document" to the Modalities and Procedures
CDM project should be innovative and market-based so that developed countries may invest in bankable projects in developing ones. Emission reduction shall be additional to any that would occur in absence of the CDM project activity.Emission reductions are expected to be real, measurable and long term.A comprehensive justification of the choice of methodology adopted is to be given including its ability to achieve long-term emission reductions.
While assessing the additionality of a project activity applicant is required to prove that the CDM project activity is not likely baseline scenario or the 'Business As Usual'. This also means that a project proposed to meet the legal compliance of the state cannot be a CDM project. Additionality may be demonstrated by qualitative and quantitative assessment of one or more barriers facing the proposed project activity. Other way can be qualitative or quantitative assessment of different potential options and indicating why the non project option is more likely.
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