Design issues in clean development mechanism forestry projects
The design of an afforestation and reforestation (AR) project under the Clean Development Mechanism (CDM) of the Kyoto Protocol is a two-stage process. The first stage includes the definition of a project idea, the evaluation of its eligibility under CDM rules, and preliminary estimations of carbon removals, among other things. The second stage involves the preparation or application of a baseline and monitoring methodology and the production of a Project Design Document (PDD). This second stage must be implemented in strict compliance with the modalities and procedures (M&Ps) of the CDM and any guidance provided by the CDM Executive Board (EB). As a consequence of the decisions on M&Ps, the design of a CDM AR project deals with several technical issues more complex than those for CDM activities in other sectors.1 In part this is the consequence of the complex political process that produced the M&Ps. Forestry projects were debated extensively because of concerns about their real contribution to climate change mitigation and their possible negative effects on host countries' sustainable development. It was feared that too lax regulations would jeopardize the environmental integrity of the Kyoto Protocol and create negative effects on local communities or biodiversity and that too stringent regulations would discourage project development. In this chapter we review technical, legal, and market issues that proponents of CDM AR projects have to address when they design their projects. We analyze the tasks, types of information, and capacity required to address the project design issues, as well as the problems that project developers may face. We identify which design issues represent the most significant barriers for project proponents and propose recommendations to overcome these barriers. Our analysis is based on experience we gained during the first year of the FORMA project, which assisted in the preparation of ten CDM AR project initiatives in Latin America.2 In February 2006 FORMA launched a call for CDM AR project ideas and received forty-seven responses, which we refer to as the "large portfolio." These projects originated in fifteen Latin American countries. Some countries, such as Colombia and Bolivia with eight projects each, were well represented. After a first filter based on simple criteria, twenty-two projects were selected for further examination. Among them, seven were in early stages of development (substantiated by a general concept note or prefeasibility study), eleven had a Project Idea Note (PIN)-a short description that is not mandatory but has proved to be a useful marketing document-and four were already drafting PDDs. We refer to these twenty-two projects as the "small portfolio."3 For this chapter, we performed a simple analysis on the large portfolio and a more detailed analysis on the small portfolio.
| Summary: | The design of an afforestation and reforestation (AR) project under the Clean Development Mechanism (CDM) of the Kyoto Protocol is a two-stage process. The first stage includes the definition of a project idea, the evaluation of its eligibility under CDM rules, and preliminary estimations of carbon removals, among other things. The second stage involves the preparation or application of a baseline and monitoring methodology and the production of a Project Design Document (PDD). This second stage must be implemented in strict compliance with the modalities and procedures (M&Ps) of the CDM and any guidance provided by the CDM Executive Board (EB). As a consequence of the decisions on M&Ps, the design of a CDM AR project deals with several technical issues more complex than those for CDM activities in other sectors.1 In part this is the consequence of the complex political process that produced the M&Ps. Forestry projects were debated extensively because of concerns about their real contribution to climate change mitigation and their possible negative effects on host countries' sustainable development. It was feared that too lax regulations would jeopardize the environmental integrity of the Kyoto Protocol and create negative effects on local communities or biodiversity and that too stringent regulations would discourage project development. In this chapter we review technical, legal, and market issues that proponents of CDM AR projects have to address when they design their projects. We analyze the tasks, types of information, and capacity required to address the project design issues, as well as the problems that project developers may face. We identify which design issues represent the most significant barriers for project proponents and propose recommendations to overcome these barriers. Our analysis is based on experience we gained during the first year of the FORMA project, which assisted in the preparation of ten CDM AR project initiatives in Latin America.2 In February 2006 FORMA launched a call for CDM AR project ideas and received forty-seven responses, which we refer to as the "large portfolio." These projects originated in fifteen Latin American countries. Some countries, such as Colombia and Bolivia with eight projects each, were well represented. After a first filter based on simple criteria, twenty-two projects were selected for further examination. Among them, seven were in early stages of development (substantiated by a general concept note or prefeasibility study), eleven had a Project Idea Note (PIN)-a short description that is not mandatory but has proved to be a useful marketing document-and four were already drafting PDDs. We refer to these twenty-two projects as the "small portfolio."3 For this chapter, we performed a simple analysis on the large portfolio and a more detailed analysis on the small portfolio. |
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