Jiannan Wang (Tsinghua, China) Guoliang Li (Tsinghua, China) Jianhua Feng (Tsinghua, China)
Possible Development of CDM in the Post-2012 Regime DUAN Maosheng Tsinghua University Beijing, Nov....
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Transcript of Possible Development of CDM in the Post-2012 Regime DUAN Maosheng Tsinghua University Beijing, Nov....
Possible Development of CDM in the Post-2012 Regime
DUAN MaoshengTsinghua University
Beijing, Nov. 19, 2007
23/4/21 2
Outlines
1. Why CDM/flexible mechanisms
2. Proposals on future development of CDM
3. Main considerations under these proposals
4. Possible way forward
23/4/21 3
Why CDM/flexible mechanisms
To achieve emission reduction targets at lower economic cost
Environmental effects and integrity, not economic or any other concern, should always be the first consideration
Flexible mechanisms, in whatever forms, should always follow this principle
Flexible mechanisms may be used only when necessary and really help to solve the problem
Principles established by the convention should not be compromised
23/4/21 4
Proposals on future development of CDM
Sectoral crediting mechanism (sectoral CDM) Benchmark: crediting projects with emissions below
the benchmark without further additionality test No-lose target: no penalty in case of higher emissions
and trade in case of lower emissions Cap-and-trade
Policy CDM: crediting emission reduction policy and measures
Technology CDM: crediting selected technologies without additionality test; technology transfer and CERs transfer
23/4/21 5
Sectoral CDM Benchmark
Similar to current CDM rules, while no additionality test Crediting activities and no linkage with cap for the whole
sector Setting of the benchmark is crucial while difficult Suitable for sectors with homogeneous products
No-lose target Arbitrary targets and not necessarily reflection of efforts Difficulties in aspects of data collection, quantification of
individual efforts and incentives, etc. Cap-and-trade
A type of targets and no linkage with CDM
23/4/21 6
Policy CDM and Technology CDM Policy CDM
Additionality test of policies and measures Quantification of emission reduction considerations Consistence with the process of policy and measure
formulation Technology CDM
Promotion of technology transfer and emission reduction efforts
Risk reductions for both sides of CER transactions Additionality assurance through identification of real
qualified technologies and setting of baselines Promotion of additional emission reduction efforts through
underlying certainty
23/4/21 7
Main considerations under these proposals Transaction cost Distribution issue Mobilization of investment for emission reduction
efforts Catalyzing technologies Competence concern Further reduction of compliance cost Broader and deep involvement
23/4/21 8
Possible way forward
Sectoral approaches could be a useful attempt for broader involvement when very carefully designed
Sectoral approaches themselves do not necessarily assure the participation of developing countries as some major concerns of developing countries are not addressed automatically
Pledge and review may further limit the participation possibility of developing countries
Technical difficulty, such as data availability, verification possibility and related capacity, could be further major barriers
23/4/21 9
Possible way forward
Major emitting sectors should be chosen Sectors with homogeneous products should be the first
choice Public and timely availability and verification possibility of
data as well as cost should be considered Electric power sector, iron and steel sector, cement
sector, etc. could be possible choices Different approaches maybe suitable for different sectors
23/4/21 10
Possible way forward
Developing countries have been making mitigation efforts very actively through CDM
Underlying economic incentives could be an impetus for small developing countries, but not for large countries
No political risks as well as additional financial and technical assistance could be an option for enhancing developing country’s mitigation efforts
The demonstration of leadership and feasibility by developed countries should be helpful for developing countries’ further involvement