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Introduction (from guide to bundle CDM projectIMP DOCS)
In 1997, almost 200 countries signed the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC). The most important component of the agreement was the establishment of quantitative targets for greenhouse gas (GHG) emissions in industrialised (Annex B) countries. Industrialised countries may meet their targets through a combination of domestic climate change mitigation activities and the use of the Kyoto Mechanisms. One of these mechanisms, the Clean Development Mechanism (CDM), allows developed countries to achieve part of their Kyoto target in a more costeffective way by implementing projects that reduce GHG emissions in developing (non-Annex I) countries, assisting the latter in achieving sustainable development.
The Flexible mechanisms of Kyoto protocol - The Kyoto Protocol includes three mechanisms -
Art.6 (Joint Implementation), The term “Joint Implementation” only applies to projects that take place in
Annex B countries. Emission credits (“Emission Reduction Units”, ERUs) can only accrue from 2008. JI
has two distinct “tracks”. The first track is very liberal and leaves choice of baselines and project lifetimes
to the participating countries. This is due to the fact that ERUs are deducted from the emissions budget of
the host country and thus there is no incentive for baseline manipulation. The second track is similar to
the CDM and applies if the host country does not fulfil the reporting requirements for Annex B countries;
of course it can also be chosen voluntarily. It is overseen by a “Supervisory Committee” and the ERUs
have to be certified by “Independent Entities”. It is likely that the rules developed by the CDM Executive
Board will be used under the second track. To garner the potential for emission reductions before 2008,
some countries already now invite investments into “early JI” emission reduction projects and grant post-
2008 emission rights from their budgets for the pre-2008 reductions.
Art.12 (Clean Development Mechanism) The CDM allows countries with emission targets to buy
emission credits from projects in countries without targets. It also has the goal to further sustainable
development in the latter countries and already formally started in 2000. Due to the fact that CDM
emission credits are added to the overall emissions budget of Annex B countries, their quality has to be
guaranteed. Therefore, they only accrue after independent verification through so-called “Operational
Entities”, which are mainly commercial certification companies, and thus are called Certified Emission
Reductions (CERs). The Marrakech Accords defined an elaborate project cycle that is overseen by the
CDM Executive Board (EB), whose 10 members are elected by the Conference of the Parties. It has to
check whether projects conform to the rules and formally register them. Each country participating in the
CDM has to have ratified the Kyoto Protocol and set up a “Designated National Authority” (DNA) for
approval of the CDM projects it is involved in.
Art.17 (Emissions Trading), Trading of ”Assigned Amount Units” between developed nations.