Abstract
This chapter provides a comprehensive introduction to the CDM in an international legal context. It is divided into five sections and many soft law documents concerning climate change are examined. Section 2 focuses on explaining what the CDM is. First, the background to the CDM is introduced in order to provide an overview of the circumstances leading to the inclusion of the CDM as one of the three financial mechanisms under the Kyoto Protocol. Based on the above introduction, the definition and purpose of the CDM are introduced and the rationale for the CDM is analyzed. Section 3 illustrates how the CDM operates in a global context. CDM’s international operational rules and procedures and classifications are elaborated in this section. Section 4 critically assesses the success of the CDM in a global context. The achievements as well as pitfalls of the CDM are explored. Based on the above, the key factors influencing the success of the CDM are identified.
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- 1.
IPCC (1990).
- 2.
See United Nations Framework Convention on Climate Change, opened for signature 12 June 1992 (entered into force 21 March 1994). Text of the Convention is available at http://unfccc.int/resource/docs/convkp/conveng.pdfat 9 August 2011.
- 3.
Solomon et al. (2007).
- 4.
The IPCC has three Working Groups and a Task Force:
-
Working Group I assesses the scientific aspects of the climate system and climate change.
-
Working Group II assesses the vulnerability of socio-economic and natural systems to climate change, negative and positive consequences of climate change, and options for adapting to it.
-
Working Group III assesses options for limiting greenhouse gas emissions and otherwise mitigating climate change.
-
The Task Force on National Greenhouse Gas Inventories is responsible for the IPCC National Greenhouse Gas Inventories Program.
-
- 5.
It should be noted that although the IPCC report is supposed to be the world’s most authoritative scientific account of the scale of global warming, it has been recently subjected to the criticism that the 2007 report overstates the dangers of climate change as a result of use of unreliable evidence. For example, the panel had based claims about disappearing mountain ice on anecdotal evidence in a student’s dissertation and an article in a mountaineering magazine. Consequently, the panel was forced to issue a retraction after it emerged statements about the melting of Himalayan glaciers were inaccurate. For more details, see Gray and Leach (2011).
- 6.
Le Treut et al. (2007).
- 7.
Ibid.
- 8.
Ibid 95.
- 9.
See Weart (2009).
- 10.
See Le Treut, above n 6, 115.
- 11.
Water vapor is the most important greenhouse gas, and carbon dioxide is the second most important one. Methane, nitrous oxide, ozone and several other gases present in the atmosphere in small amounts also contribute to the greenhouse effect.
- 12.
IPCC (2007a).
- 13.
It is short for Special Report on Emissions Scenarios. The Special Report on Emissions Scenarios (SRES) was a report prepared by the Intergovernmental Panel on Climate Change (IPCC) for the Third Assessment Report, on future emission scenarios to be used for driving global circulation models to develop climate change scenarios, The SRES Scenarios were also used for the Fourth Assessment Report.
- 14.
Above n 12, 12.
- 15.
Ibid 13.
- 16.
Ibid.
- 17.
Ice core is a cylinder of ice drilled out of a glacier or ice sheet.
- 18.
Above n 12, 2.
- 19.
Ibid.
- 20.
Ibid 10.
- 21.
Ibid 16.
- 22.
Ibid 5.
- 23.
See, eg, The Nature Conservancy, Climate Change Impacts: Rising Seas http://www.nature.org/initiatives/climatechange/issues/art19621.html at 10 August 2011.
- 24.
Above n 12, 6–7.
- 25.
Ibid 8.
- 26.
Ibid 7.
- 27.
IPCC (2007b).
- 28.
Ibid.
- 29.
Ibid.
- 30.
See especially Pacala and Socolow (2004), p. 968.
- 31.
Protection of the Global Climate for Present and Future Generations of Mankind, GA Res 43/53, 70th plen mtg, UN Doc A/Re/42/53 (1988).
- 32.
See Protection of the Global Climate for Present and Future Generations of Mankind, GA Res 43/53, 70th plen mtg, UN Doc A/Re/42/53 (1988).
- 33.
Freestone (2005), p. 3.
- 34.
See United Nations Framework Convention on Climate Change, http://unfccc.int/essential_background/convention/status_of_ratification/items/2631.php at 10 August 2011.
- 35.
Ibid.
- 36.
Ibid.
- 37.
Ibid.
- 38.
Report of the Conference of the Parties on its First Session, FCCC/CP/1995/7/Add.1(1995)
http://www.inecc.net/policy-issues/international/Berlin%20Mandate.pdf at 10 August 2011.
- 39.
The six gases are to be combined in a ‘basket’, with reductions in individual gases translated in to ‘CO2 equivalents’ that are then added up to produce a single figure.
- 40.
The Marrakesh Accords and the Marrakesh Declaration, unfccc.int/cop7/documents/accords_draft.pdf at 10 August 2011.
- 41.
The Article 25 of Kyoto Protocol stipulates that ‘This Protocol shall enter into force on the ninetieth day after the date on which not less than 55 Parties to the Convention, incorporating Parties included in Annex I which accounted in total for at least 55% of the total carbon dioxide emissions for 1990 of the Parties in Annex I.’ The US which is responsible for about a quarter of the emissions that have been blamed for global warming formally withdrew from the protocol in 2001, claiming it would damage the U.S. economy, and major developing nations like China and India are exempt. After the strenuous negotiations, the Russian Federation eventually ratified the protocol and the Kyoto Protocol went into effect.
- 42.
Removal by sinks means removing carbon dioxide from the atmosphere, which could include the sequestering of carbon by land use, land-use change or forestry (LULUCF).
- 43.
AAUs refer to the quantity of GHGs that a Party to the Kyoto Protocol is allowed to release in the global atmosphere as calculated on a yearly basis in Annex B of the proposal.
- 44.
RMUs are generated by land use, land-use change, and forestry activities such as afforestation or reforestation that sequestrate CO2.
- 45.
Raúl Estrada-Oyuela, ‘Remarks on From Kyoto to Buenos Aires: Technology Transfer and Emissions Trading’ (Speech delivered at a conference held at Columbia University, New York, 24 April 1998). See also Jacob Werkman, ‘Unwrapping the Kyoto Surprise’ (1998) 7(2) Review of European Community and International Environmental Law 147, 151.
- 46.
See the negotiating text by the Chairman (NTC) (FCCC/AGBM/1997/3/Add.1 and Corr.1), dated 21 April 1997, prepared by the Chairman, with assistance from the Secretariat, is a comprehensive document reflecting all submissions made by Parties to date and structured in the form of a protocol, and without attribution to the Parties. Para.121.4.
- 47.
United Nations Framework Convention on Climate Change, opened for signature 12 June 1992 (entered into force 21 March 1994). Text of the Convention is available at http://unfccc.int/resource/docs/convkp/conveng.pdf
at 9 August 2011.
- 48.
Cotterrell (1992).
- 49.
Above n 27, 8.
- 50.
See especially Biermann (1996), p. 426.
- 51.
Ibid 431.
- 52.
Ibid.
- 53.
Report of the World Commission on Environment and Development: Our Common Future (1987).
- 54.
For explanation, see below paragraph.
- 55.
Field (1997), p. 90.
- 56.
Ibid 91.
- 57.
See Unep Risø Centre on Energy, Climate and Sustainable Development and Risø National Laboratory (2004).
- 58.
Ibid 22.
- 59.
Ibid 11.
- 60.
See Report of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol, 1st sess, 7–8, UN Doc FCCC/KP/CMP/2005/8/Add.1 (2005). It is available at http://cdm.unfccc.int/Reference/COPMOP/08a01.pdf#page=15 at 9 August 2011.
- 61.
Refer to UNFCCC http://cdm.unfccc.int/EB/background.html at 9 August 2011. See also Decision 3/CMP.1, FCCC/KP/CMP/2005/8/Add.1.
- 62.
Above n 57, 24.
- 63.
Refer to UNFCCC http://cdm.unfccc.int/DOE/index.html at 9 August 2011
- 64.
See 17/CP.7. Marrakesh Accords, 32–33, UN Doc FCCC/CP/2001/13/Add.2 (2002). It is available at http://unfccc.int/resource/docs/cop7/13a02.pdf#page=20 at 9 August 2011.
- 65.
For more details, see ibid.
- 66.
See United Nations Framework Convention on Climate Change, opened for signature 12 June 1992 (entered into force 21 March 1994). Text of the Convention is available at http://unfccc.int/resource/docs/convkp/conveng.pdf at 9 August 2011.
- 67.
There are no detailed sustainable development criteria globally due to the fact that different countries have quite different national circumstances. Thus, Marrakesh Accords state that it is the Host Party’s prerogative to confirm whether a CDM project activity assist in achieving sustainable development. For more details, see Decision 17/CP.7, Modalities and Procedures for a Clean Development Mechanism as defined in Article 12 of the Kyoto Protocol, art.3.1 & Annex B, 151.1.187.213/Assets/8/20040506100129_10-3-36-111.pdf at 9 August 2011.
- 68.
The DOE may determine this requirement in the process of validation based on the PDD provided by project participants.
- 69.
A CDM project activity is additional if anthropogenic emissions of GHGs by sources are reduced below those that would have occurred in the absence of the registered CDM Project activity. However, the additionality assessment process is complex and technical. In order to explain how and why the project activity is additional, it is necessary for project participants to identify baseline scenarios in accordance with the selected baseline methodology. The baseline for a CDM project activity is the scenario that reasonably represents the anthropogenic emissions by sources of GHGs that would occur in the absence of the proposed project activity. The difference between the baseline emissions and project emissions (GHG emissions after implementing the CDM project activity) is emission reductions. The Marrakesh Accords set out some guidance on how to calculate baseline emissions. A baseline shall be calculated by project participants in accordance with approved methodologies, which are publicly available on the UNFCCC CDM website or new methodologies, which need the approval by EB prior to a submission for registration of this project activity. Besides, project participants should take into account their national policies and circumstances when establishing a baseline and choosing a baseline methodology.
- 70.
The website address is http://cdm.unfccc.int/Statistics/index.html.
- 71.
Afforestation is the direct human-induced conversion of land that has not been forested for a period of at least 50 years to forested land through planting, seeding and/or the human-induced promotion of natural seed sources. Reforestation is the direct human-induced conversion of non-forested land to forested land through planting, seeding and/or the human-induced promotion of natural seed sources, on land that was forested but that has been converted to non-forested land. For the first commitment period, reforestation activities will be limited to reforestation occurring on those lands that did not contain forest or contained forest in exhaustion on 31 December 1989.
- 72.
The crediting period for all CDM projects, except afforestation and reforestation projects, can be either:
-
7 years with the option of up to two renewals of 7 years each if the project baseline is still valid or has been updated with new data; or
-
10 years with no renewal option.
For afforestation and reforestation projects, the choice is between:
-
20 years with up to two renewal periods of 20 years each; or
-
30 years with no renewal.
-
- 73.
The project developer may suggest the CDM EB design the same DOE that has validated the project to verify and certify emission reductions.
- 74.
Decision 17/CP.7, Modalities and Procedures for a Clean Development Mechanism as defined in Article 12 of the Kyoto Protocol, para 6(c), 2, 151.1.187.213/Assets/8/20040506100129_10-3-36-111.pdf at 8 August 2011.
- 75.
Above n 57, 43.
- 76.
Ibid.
- 77.
Schneider (2007).
- 78.
Ibid.
- 79.
Figueres (2006).
- 80.
Decision 7/CMP.1, Further Guidance Relating to the Clean Development Mechanism, para 20, 97, UN Doc FCCC/KP/CMP/2005/8/Add.1 (2005), http://unfccc.int/files/meetings/cop_13/application/pdf/cmp_guid_cdm.pdf at 9 August 2011.
- 81.
A CPA is defined as a project activity under a programme of activities. A CPA is a single, or a set of interrelated measure(s), to reduce GHG emissions or result in net anthropogenic greenhouse gas removals by sinks, applied within a designated area defined in the baseline methodology (EB 32, Annex 38, page 1).
- 82.
See CDM Statistics: CERs Issued by Host Party, UNFCCC http://cdm.unfccc.int/Statistics/index.html at 9 August 2011.
- 83.
Capoor and Ambrosi (2007).
- 84.
Ibid.
- 85.
It should be noted that the CCX was closed at the end of 2010. For more details, see below page 41.
- 86.
See Capoor and Ambrosi (2009). See also Capoor and Ambrosi, above n 83, 20.
- 87.
Ibid 33.
- 88.
Ibid 34.
- 89.
Ibid 35.
- 90.
Ibid 40.
- 91.
HFC-23 (trifluoromethane) is generated as a waste gas in the manufacturing process of HCFC-22 which is a gas used as refrigerant and as feedstock, a raw material for other products. It has a global warming potential 11,700 times greater than CO2. The UNFCCC and the Kyoto Protocol list the HFC-23 as a major potential GHG and one of the first types of projects established under CDM was the investment in the destruction of the compound HFC-23.
- 92.
Capoor and Ambrosi, above n 83, 27.
- 93.
Ibid 21.
- 94.
World Bank Team (2011).
- 95.
For more details, see ibid 54.
- 96.
Pearson (2007), p. 247.
- 97.
Ibid 251.
- 98.
Ibid 249.
- 99.
Capoor and Ambrosi, above n 83, 32.
- 100.
See Godoy (2009).
- 101.
Ibid.
- 102.
Stern and Antholis (2008), p. 175.
- 103.
See the sentence written by the economist John Kay in the Financial Times: ‘When a market is created through political action rather than emerging spontaneously from the needs of buyers and sellers, business will seek to influence market design for commercial advantage.’ Kay (2006).
- 104.
Wara and Victor (2008).
- 105.
See China’s Eleventh-Five Year Plan (2006–2010), ch 6 http://en.ndrc.gov.cn/hot/t20060529_71334.htm at 10 August 2011.
- 106.
See Renewable Energy Law 2005 (People’s Republic of China), ch 6 http://www.ccchina.gov.cn/en/NewsInfo.asp?NewsId=5371 10 August 2011.
- 107.
See especially Wara and Victor, above n 104, 12–4.
- 108.
Ibid 14.
- 109.
Ibid.
- 110.
David Victor, ‘Life after Kyoto’ (Speech delivered at the UCLA International Institute, Los Angeles, 1 February 2001).
- 111.
Ellis and Kamel (2007).
- 112.
Pearson, above n 96, 250.
- 113.
Ibid.
- 114.
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Jiang, X. (2013). What the CDM Is and How It Operates: The CDM in an International Context. In: Legal Issues for Implementing the Clean Development Mechanism in China. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-24737-8_2
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