| CLIMATE |
A summary follows of the inherent opportunities and problems involved in the application of global eligibility criteria and sustainable energy development indicators.
The concept of criteria and indicators sets a draft agenda, primarily for host countries where CDM projects will take place. Like all agendas, the items will be revised as the CDM develops and lessons are learned.
The eligibility criteria and indicators can be used both as constraints and as design instruments in devising opportunities to provide a decision-making framework for host countries which may be overwhelmed with CDM project proposals. They will, in short, provide a process approach to the appraisal of CDM projects - and provide input for a decision regarding their acceptance or rejection.
The next stage of development of criteria and indicators would be to test them in actual projects, comparing outcomes and revising them accordingly. The criteria are roughly divided into two groups, namely substantial and operational criteria. Both groups need to be applied to project appraisals and monitoring. The final decision on which criteria are to be used will be political; that is, decisions on which criteria will apply and revisions to be made will be taken by Parties initially at COP-6 and thereafter at the COP/MOPs.
The key areas where political decisions will be focussed are likely to be:
There is a wide range of opinion regarding the level of supplementarity and the quotas that should apply to the flexibility mechanisms. Countries that are pursuing afforestation projects, such as Costa Rica, are proposing larger quotas. Others propose smaller quotas so as to test and improve the economies of scale of new and innovative technologies from which southern countries may benefit in future. Still others propose leaving it to the market rather than fixing arbitrary quotas.
The indicators provide a means of testing the extent to which projects contribute to sustainable energy development. It is suggested that for any project to qualify, at least two of the four pillars, namely environmental and social sustainability, must show positive results. It is crucial that host country Parties motivate changes in projects, should any of the pillars not show positive results.
Scenarios should be developed that describe the entire project cycle hypothetically, testing the indicators against the final outcome of the project. The indicators will constitute part of the reporting on projects to the Executive Board and National Focal Points in both host and investor countries. Independent mediation or technical advice will be required to revise projects if indicators are negative during monitoring.
If the indicators can provide a simple framework they will be more useful as a pedagogical and communication tool. Simplicity will help maintain transparency in the reporting of CDM projects to civil society and other stakeholders. The short list of indicators suggested here may require future revisions as experience is gained, but their application will initiate the process of developing a defined agenda for sustainable energy development.
The best possible outcome would be that their application would become standard practice for internal policy formation among proponents of future energy projects.
The availability of reasonably priced finance will be the engine that drives the CDM. The over-estimation of emission reduction units and the absence of genuine financial additionality are the immediate threats to the integrity of the mechanism.
Finally, negotiators must acknowledge that if CDM projects are to contribute
to sustainable development, they must not be initiated prior to the local elaboration
of sustainable development plans in host countries. To do so would defy all
logic and be self-defeating. These national plans must be prepared now, with
the active participation of all stakeholders, if the CDM is to be a positive
contributor to emissions reductions, to the actual sustainable development needs
of developing countries, and thus to improved welfare globally.
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