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95-769: The CDM is supervised by the CDM Executive Board under the guidance of the Conference of the Parties of the United Nations Framework Convention on Climate Change (UNFCCC). The scheme allows Annex I countries to buy Certified Emission Reduction units (CERs) from approved CDM emission reduction projects in developing countries, where investments in emission reductions are cheapest globally. Certified Emission Reduction units may also be traded in emissions trading schemes. Between

190-658: A sustainable manner. The UNFCCC's work currently focuses on implementing the Paris Agreement . This agreement entered into force in 2016. It aims to limit the rise in global temperature to well below 2 °C (3.6 °F) above levels before the Industrial Revolution , and even aiming to hold it at 1.5 °C (2.7 °F). The Paris Agreement superseded the UNFCCC's Kyoto Protocol which had been signed in 1997 and ran from 2005 to 2020. By 2022,

285-680: A building on the UN Campus known as Langer Eugen . The secretariat is established under Article   8 of the Convention and headed by the Executive Secretary. The secretariat, augmented through the parallel efforts of the Intergovernmental Panel on Climate Change (IPCC), aims to gain consensus through meetings and the discussion of various strategies. Since the signing of the UNFCCC treaty, Conferences of

380-408: A less pollutive entity. This trading of permits results in a marginal economic disincentive to the buyer and a marginal economic incentive the abater. CDM and JI are flexible mechanisms based on the concept of a carbon project . These projects reduce GHG voluntarily (outside the capped sectors) and therefore can be imported into the capped sector to aid in compliance. The supplementarity principle

475-508: A low-emission development strategy is central to sustainable development, and that the share of global emissions originating in developing countries will grow to meet their social and development needs. The UN Sustainable Development Goal 13 (SDG 13) includes a target about the UNFCCC and explains how the Green Climate Fund is meant to be used: One of the five targets under SDG 13, meant to be achieved by 2030, states: "Implement

570-635: A measurable, reportable and verifiable manner." 42 developed countries have submitted mitigation targets to the UNFCCC secretariat, as have 57 developing countries and the African Group (a group of countries within the UN). As part of the 2009 Copenhagen negotiations, a number of countries produced the Copenhagen Accord. The Accord states that global warming should be limited to below 2.0 °C (3.6 °F). The Accord does not specify what

665-613: A report on global warming of 1.5 °C. The IPCC subsequently released the Special Report on Global Warming of 1.5 °C (SR15) in 2018. The report showed that it was possible to keep warming below 1.5 °C during the 21st century. But this would mean deep cuts in emissions. It would also mean rapid, far-reaching changes in all aspects of society. The report showed warming of 2 °C would have much more severe impacts than 1.5 °C. In other words: every bit of warming matters. SR15 had an unprecedented impact for an IPCC report in

760-546: A result, the CDM Executive Board began limiting certification to facilities built before 2001. In September 2010, Sandbag estimated that in 2009 59% of the CERs used as offsets in the European Union Emissions Trading Scheme originated from HFC-23 projects. United Nations Framework Convention on Climate Change The United Nations Framework Convention on Climate Change ( UNFCCC )

855-570: A tonne of HFC-23 earns the refrigerant manufacturer 11,000 certified emissions reduction units. In 2009, the Carbon Trust estimated that industrial gas projects, such as those limiting HFC-23 emissions, would contribute about 20% of the CERs issued by the CDM in 2012. The Carbon Trust expressed concern that projects for destroying HFC-23 were so profitable that coolant manufacturers might build new factories produce fluoroform "byproduct" to destroy. As

950-451: A very large influence on future efforts to limit total global emissions (Fisher et al ., 2007). The CDM is designed to start developing countries off on a path towards less pollution, with industrialised (Annex B) countries paying for the reductions. To prevent industrialised countries from making unlimited use of CDM, the framework has a provision that use of CDM be supplemental to domestic actions to reduce emissions. The Adaptation Fund

1045-448: Is allowed to emit) in the ETS is particularly favourable to developing countries. Local resistance Some civil society groups have argued that most CDM projects benefit big industries, while doing harm to excluded people. In New Delhi in 2012, a grassroots movement of waste pickers sprang up resisting a CDM project. In Panama in 2012, a CDM project was an impediment to peace talks between

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1140-528: Is based on the idea of emission reduction "production" (Toth et al ., 2001, p. 660). These reductions are "produced" and then subtracted against a hypothetical "baseline" of emissions. The baseline emissions are the emissions that are predicted to occur in the absence of a particular CDM project. CDM projects are "credited" against this baseline, in the sense that developing countries gain credit for producing these emission cuts. The economic basis for including developing countries in efforts to reduce emissions

1235-499: Is equivalent to the reduction of one tonne of CO 2 e, e.g. CO 2 or its equivalent), to project participants based on the monitored difference between the baseline and the actual emissions, verified by the DOE. To avoid giving credits to projects that would have happened anyway ("freeriders"), specified rules ensure the additionality of the proposed project, that is, ensure the project reduces emissions more than would have occurred in

1330-480: Is found in three articles of the Kyoto Protocol: article 6 and 17 with regards to trading, and article 12 with regards to the clean development mechanism. Article 6.1 states that "The acquisition of emission reduction units shall be supplemental to domestic actions for the purposes of meeting commitments under Article 3". Article 17 states that "[…]Any such trading shall be supplemental to domestic actions for

1425-466: Is guided by specific objectives that, together, are seen as crucial for effectively implementing climate adaptation and mitigation actions, and for achieving the ultimate objective of the UNFCCC. The Kyoto Protocol ( Japanese : 京都議定書 , Hepburn : Kyōto Giteisho ) was an international treaty which extended the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits state parties to reduce greenhouse gas emissions , based on

1520-806: Is intended that the Green Climate Fund be the centrepiece of efforts to raise climate finance under the UNFCCC. There are four other, smaller multilateral climate funds for paying out money in climate finance which are coordinated by the UNFCCC. These include the Adaptation Fund (AF), the Least Developed Countries Fund (LDCF), the Special Climate Change Fund (SCCF) and the Global Environment Facility (GEF). The GCF

1615-520: Is not threatened and to enable economic development to proceed in a sustainable manner". Action for Climate Empowerment (ACE) is a term adopted by the UNFCCC in 2015 to have a better name for this topic than "Article 6". It refers to Article 6 of the convention's original text (1992), focusing on six priority areas: education, training, public awareness, public participation, public access to information, and international cooperation on these issues. The implementation of all six areas has been identified as

1710-489: Is one of the main principles of the Kyoto Protocol . The concept is that internal abatement of emissions should take precedence before external participation in flexible mechanisms. These mechanisms include emissions trading, Clean Development Mechanism (CDM), and Joint Implementation (JI). Emissions trading basically refers to the trading of emissions allowances ( carbon credits ) between one regulated entity and

1805-409: Is problematic that key signatory states are not adhering to their individual commitments. For this reason, the UNFCCC has been criticized as being unsuccessful in reducing greenhouse gas emission since its adoption. Parties to the convention have not agreed on a process allowing for majority voting. All decisions are taken by consensus, giving individual parties or countries a veto. The effectiveness of

1900-690: Is put towards climate action . The Fund's former director Héla Cheikhrouhou has complained in 2016 that the Fund is backing too many "business-as-usual types of investment proposals". This view is echoed by a number of civil society organizations. "UNFCCC" is also the name of the Secretariat charged with supporting the operation of the convention, with offices on the UN Campus in Bonn, Germany . Offices were formerly located in Haus Carstanjen and in

1995-421: Is rejected; that the host country rejects the project; that the CDM Executive Board rejects the project; that the project for some reason produces fewer credits than planned; or that the buyer does not get CERs at the agreed time if the international transaction log (the technical infrastructure ensuring international transfer of carbon credits) is not in place by then. The seller can usually only take these risks if

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2090-554: Is subject to a 2% levy, which could raise between $ 300 million and $ 600 million over the 2008–12 period. The actual amount raised will depend on the carbon price. Since 2000, the CDM has allowed crediting of project-based emission reductions in developing countries (Gupta et al ., 2007). By 1 January 2005, projects submitted to the CDM amounted to less than 100 MtCO 2 e of projected savings by 2012 (Carbon Trust, 2009, p. 18-19). The EU ETS started in January 2005, and

2185-678: Is that emission cuts are thought to be less expensive in developing countries than developed countries (Goldemberg et al ., 1996, p. 30; Grubb, 2003, p. 159). For example, in developing countries, environmental regulation is generally weaker than it is in developed countries (Sathaye et al ., 2001, p. 387-389). Thus, it is widely thought that there is greater potential for developing countries to reduce their emissions than developed countries. Emissions from developing countries are projected to increase substantially over this century (Goldemberg et al ., 1996, p. 29). Infrastructure decisions made in developing countries could therefore have

2280-588: Is the "Amounts provided and mobilized in United States dollars per year in relation to the continued existing collective mobilization goal of the $ 100 billion commitment through to 2025". The Green Climate Fund (GCF) is a fund for climate finance that was established within the framework of the United Nations Framework Convention on Climate Change (UNFCCC). Considered the world's largest fund of its kind, GCF's objective

2375-545: Is the UN process for negotiating an agreement to limit dangerous climate change. It is an international treaty among countries to combat "dangerous human interference with the climate system ". The main way to do this is limiting the increase in greenhouse gases in the atmosphere. It was signed in 1992 by 154 states at the United Nations Conference on Environment and Development (UNCED), informally known as

2470-593: Is the largest of these five funds. As of Dec 2023, the GCF had a portfolio of 13.5 billion USD (51.9 billion USD including co-financing). The process of designing the GCF has raised several issues. These include ongoing questions on how funds will be raised, the role of the private sector, the level of "country ownership" of resources, and the transparency of the Board itself. Also, this additional international climate institution might further fragment taxpayer's money that

2565-457: Is then validated by a third party agency, called a Designated Operational Entity (DOE), to ensure the project results in real, measurable, and long-term emission reductions. The EB then decides whether or not to register (approve) the project. If a project is registered and implemented, the EB issues credits, called Certified Emission Reductions (CERs, commonly known as carbon credits , where each unit

2660-561: Is to assist developing countries with climate change adaptation and mitigation activities. The GCF is an operating entity of the financial mechanism of the UNFCCC. It is based in Songdo , Incheon , South Korea. It is governed by a Board of 24 members and supported by a Secretariat. Mafalda Duarte , a Portuguese development economist, is the Fund's Executive Director. The Green Climate Fund supports projects and other activities in developing countries using thematic funding windows . It

2755-577: The 2019 United Nations Climate Change Conference . The clean development mechanism is one of the flexibility mechanisms defined in the Kyoto Protocol. The flexibility mechanisms were designed to allow Annex B countries to meet their emission reduction commitments with reduced impact on their economies. The flexibility mechanisms were introduced into the Kyoto Protocol by the US government. Developing countries were highly skeptical and fiercely opposed to

2850-716: The Cook Islands , and the supranational union European Union . Parties to the UNFCCC are classified as: There are 43 Annex I Parties including the European Union. These countries are classified as industrialized countries and economies in transition. Of these, 24 are also Annex II Parties, including the European Union, and 14 are Economies in Transition. Annex I countries (24 of these are also Annex II Parties) : Supplementarity "Supplementarity" , also referred to as "the supplementary principle",

2945-748: The Earth Summit , held in Rio de Janeiro . The treaty entered into force on 21 March 1994. "UNFCCC" is also the name of the Secretariat charged with supporting the operation of the convention, with offices on the UN Campus in Bonn , Germany. The convention's main objective is explained in Article 2. It is the "stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic [i.e., human-caused] interference with

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3040-631: The Montreal Protocol ) at 1990 levels, by 2000. The ultimate objective of the Framework Convention is specified in Article 2: "stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic [i.e., human-caused] interference with the climate system". Article 2 of the convention says this "should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production

3135-487: The United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro (known by its popular title, the Earth Summit ). On 12 June 1992, 154 nations signed the UNFCCC, which upon ratification committed signatories' governments to reduce atmospheric concentrations of greenhouse gases with the goal of "preventing dangerous anthropogenic interference with Earth's climate system". This commitment would require substantial reductions in greenhouse gas emissions (see

3230-519: The United States and China , were not either signatories of the Kyoto Protocol or required by it to reduce their emissions. This, together with the recessions brought on by the global financial crisis and the European debt crisis , resulted in very low demand for carbon offsets, causing the value of CERs to plummet. In 2012, a UN-authorized report said governments urgently needed to address

3325-411: The climate system ". The treaty calls for continuing scientific research into the climate. This research supports meetings and negotiations to lead to agreements. The aim is to allow ecosystems to adapt to climate change . At the same time it aims to ensure there are no threats to food production from climate change or measures to address it. And it aims to enable economic development to proceed in

3420-428: The counterparty is deemed very reliable, as rated by international rating agencies. The revenues of the CDM constitutes the largest source of mitigation finance to developing countries to date (World Bank, 2010, p. 261-262). Over the 2001 to 2012 period, CDM projects could raise $ 18 billion ($ 15 billion to $ 24 billion) in direct carbon revenues for developing countries. Actual revenues will depend on

3515-521: The scientific consensus that global warming is occurring and that human-made CO 2 emissions are driving it. The Kyoto Protocol was adopted in Kyoto , Japan, on 11 December 1997 and entered into force on 16 February 2005. There were 192 parties ( Canada withdrew from the protocol, effective December 2012) to the Protocol in 2020. The Kyoto Protocol implemented the objective of the UNFCCC to reduce

3610-660: The 2012 year. With costs of emission reduction typically much lower in developing countries than in industrialised countries, industrialised countries can comply with their emission reduction targets at much lower cost by receiving credits for emissions reduced in developing countries as long as administration costs are low. The IPCC has projected GDP losses for OECD Europe with full use of CDM and Joint Implementation to between 0.13% and 0.81% of GDP versus 0.31% to 1.50% with only domestic action. While there would always be some cheap domestic emission reductions available in Europe,

3705-500: The CDM amounts to an income transfer to non-Annex I countries (Burniaux et al ., 2009, p. 40). Additionality is, however, difficult to prove, the subject of vigorous debate. Burniaux et al . (2009) commented on the large transaction costs of establishing additionality. Assessing additionality has created delays (bottlenecks) in approving CDM projects. According to the World Bank (2010), there are significant constraints to

3800-530: The CDM has "essentially collapsed", due to the prolonged downward trend in the price of CERs, which had been traded for as much as $ 20 (£12.50) a tonne before the global financial crisis to less than $ 3. With such low CER prices, potential projects were not commercially viable. In October 2012, CER prices fell to a new low of 1.36 euros a tonne on the London ICE Futures Europe exchange. In October 2012 Thomson Reuters Point Carbon calculated that

3895-632: The Conference of the Parties (COP22) in Marrakesh focused on these Nationally Determined Contributions and their implementation, after the Paris Agreement entered into force on 4 November 2016. As of 2022, the UNFCCC has 198 parties including all United Nations member states , United Nations General Assembly observers the State of Palestine and the Holy See , UN non-member states Niue and

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3990-427: The Conference of the Parties. Subsidiary bodies include: A "National Communication" is a type of report submitted by the countries that have ratified the United Nations Framework Convention on Climate Change (UNFCCC). Developed countries are required to submit National Communications every four years and developing countries should do so. Some Least Developed Countries have not submitted National Communications in

4085-636: The Conferences also served as the Meetings of Parties of the Kyoto Protocol (CMP) and since 2016 the Conferences also serve as Meeting of the Parties to the Paris Agreement (CMA). The first conference (COP1) was held in 1995 in Berlin. The 3rd conference (COP3) was held in Kyoto and resulted in the Kyoto protocol, which was amended during the 2012 Doha Conference (COP18, CMP 8). The COP21 (CMP11) conference

4180-422: The Convention related to financial resources and transfer of technology and will take fully into account that economic and social development and poverty eradication are the first and overriding priorities of the developing country Parties. The Convention specifies the aim of Annex I Parties was stabilizing their greenhouse gas emissions ( carbon dioxide and other anthropogenic greenhouse gases not regulated under

4275-545: The Panamanian government and the indigenous Ngöbe-Buglé people . Market deflation Most of the demand for CERs from the CDM comes from the European Union Emissions Trading Scheme , which is the largest carbon market. In July 2012, the market price for CERs fell to new record low of €2.67 a tonne, a drop in price of about 70% in a year. Analysts attributed the low CER price to lower prices for European Union emissions allowances, oversupply of EU emissions allowances and

4370-475: The Paris Agreement to reach its climate goals is also under debate, especially with regards to its more ambitious goal of keeping the global temperature rise to under 1.5 °C. The IPCC 's First Assessment Report appeared in 1990. The report gave a broad overview of climate change science and the scientific consensus to date . It discussed uncertainties and provided evidence of warming. The authors said they are certain that greenhouse gases are increasing in

4465-401: The Parties (COPs) have discussed how to achieve the treaty's aims. From 2010 to 2016 the head of the secretariat was Christiana Figueres , following by Patricia Espinosa who was appointed Executive Secretary on 18 May 2016 by United Nations Secretary-General Ban Ki-moon and took office on 18 July 2016. Espinosa retired on 16 July 2022. UN Under Secretary General Ibrahim Thiaw served as

4560-965: The Parties. These include the Bali Action Plan (2007), the Copenhagen Accord (2009), the Cancún agreements (2010), and the Durban Platform for Enhanced Action (2012). As part of the Bali Action Plan, adopted in 2007, all developed country Parties have agreed to "quantified emission limitation and reduction objectives, while ensuring the comparability of efforts among them, taking into account differences in their national circumstances". Developing country Parties agreed to "[nationally] appropriate mitigation actions context of sustainable development , supported and enabled by technology, financing and capacity-building, in

4655-563: The UNFCCC CDM website. If a DOE determines that a proposed project activity intends to use a new baseline methodology, it shall, prior to the submission for registration of this project activity, forward the proposed methodology to the EB for review, i.e. consideration and approval, if appropriate. According to Burniaux et al ., 2009, p. 37, crediting mechanisms like the CDM could play three important roles in climate change mitigation : According to Burniaux et al . (2009, p. 37),

4750-1069: The UNFCCC had 198 parties. Its supreme decision-making body, the Conference of the Parties (COP) , meets every year. Other meetings at the regional and technical level take place throughout the year. The Paris Agreement mandates a review or " global stocktake " of progress towards meetings its goals every five years. The first of these took place at COP28 in the United Arab Emirates (UAE) in 2023. The treaty sets out responsibilities for three categories of states. These are developed countries , developed countries with special financial responsibilities, and developing countries . The developed countries are called Annex I countries. At first there were 38 of them. Annex I countries should adopt national policies and take corresponding measures to limit their emissions of greenhouse gases . They should also report on steps for returning individually or jointly to their 1990 greenhouse gas emission levels. It

4845-494: The UNFCCC. These plans were compiled with those made as part of the Bali Action Plan. At the 2021 annual meeting UNFCCC launched the 'UN Race-to-Zero Emissions Breakthroughs'. The aim of the campaign is to transform 20 sectors of the economy in order to achieve zero greenhouse gas emissions. At least 20% of each sector should take specific measures, and 10 sectors should be transformed before COP 26 in Glasgow. According to

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4940-457: The United Nations Framework Convention on Climate Change (UNFCCC) are parties to the agreement. Of the three UNFCCC member states which have not ratified the agreement, the only major emitter is Iran . The United States withdrew from the agreement in 2020, but rejoined in 2021. In addition to the Kyoto Protocol (and its amendment) and the Paris Agreement, parties to the Convention have agreed to further commitments during UNFCCC Conferences of

5035-641: The World Bank estimated that in 2012, the largest potential for production of CERs would be from China (52% of total CERs) and India (16%) (World Bank, 2010, p. 262). CERs produced in Latin America and the Caribbean would make up 15% of the potential total, with Brazil as the largest producer in the region (7%). By 14 September 2012, 4626 projects had been registered by the CDM Executive Board as CDM projects. These projects are expected to result in

5130-415: The absence of the intervention created by the CDM. At present, the CDM Executive Board deems a project additional if its proponents can document that realistic alternative scenarios to the proposed project would be more economically attractive or that the project faces barriers that CDM helps it overcome. Current Guidance from the EB is available at the UNFCCC website. The determination of additionality and

5225-467: The acting Executive Secretary in the interim. On 15 August 2022, Secretary-General António Guterres appointed former Grenadian climate minister Simon Stiell as Executive Secretary, replacing Espinosa. Current and former executive secretaries are: The reports published by IPCC play a key role in the annual climate negotiations held by the UNFCCC. For example, the UNFCCC invited the IPCC to prepare

5320-480: The amount of leakage partly depends on the definition of the baseline against which credits are granted. The current CDM approach already incorporates some leakage. Thus, reductions in leakage due to the CDM may, in fact, be small or even non-existent. Additionality, transaction costs and bottlenecks To maintain the environmental effectiveness of the Kyoto Protocol, emission savings from the CDM must be additional (World Bank, 2010, p. 265). Without additionality,

5415-550: The atmosphere because of human activity. This is resulting in more warming of the Earth 's surface. The report led to the establishment of the United Nations Framework Convention on Climate Change (UNFCCC). The text of the Convention was produced during the meeting of an Intergovernmental Negotiating Committee in New York from 30 April to 9 May 1992. The Convention was adopted on 9 May 1992 and opened for signature on 4 June 1992 at

5510-568: The baseline is for these temperature targets (e.g., relative to pre-industrial or 1990 temperatures). According to the UNFCCC, these targets are relative to pre-industrial temperatures. 114 countries agreed to the Accord. The UNFCCC secretariat notes that "Some Parties ... stated in their communications to the secretariat specific understandings on the nature of the Accord and related matters, based on which they have agreed to [the Accord]." The Accord

5605-587: The baseline within certain applicability conditions whilst monitoring methodology will set specific steps to determine monitoring parameters, quality assurance, equipment to be used, to obtain data to calculate the emission reductions. Those approved methodologies are all coded: AM - Approved Methodology ACM - Approved Consolidated Methodology AMS - Approved Methodology for Small Scale Projects ARAM - Aforestation and Reforestation Approved Methodologies All baseline methodologies approved by Executive Board are publicly available along with relevant guidance on

5700-714: The basis of the Paris Agreement are shorter and less detailed but also follow a standardized structure and are subject to technical review by experts. At the 19th session of the Conference of the Parties in Warsaw in 2013, the UNFCCC created a mechanism for Intended Nationally Determined Contributions (INDCs) to be submitted in the run up to the 21st session of the Conference of the Parties in Paris (COP21) in 2015. Countries were given freedom and flexibility to ensure that these climate change mitigation and adaptation plans were nationally appropriate. This flexibility, especially regarding

5795-424: The calculation of emission reductions depends on the emissions that would have occurred without the project minus the emissions of the project. Accordingly, the CDM process requires an established baseline or comparative emission estimate. The construction of a project baseline often depends on hypothetical scenario modeling, and may be estimated through reference to emissions from similar activities and technologies in

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5890-471: The commitment undertaken by developed-country parties to the United Nations Framework Convention on Climate Change to a goal of mobilizing jointly $ 100 billion annually by 2020 from all sources to address the needs of developing countries in the context of meaningful mitigation actions and transparency on implementation and fully operationalize the Green Climate Fund through its capitalization as soon as possible." This target only has one indicator: Indicator 13.a

5985-432: The continued growth of the CDM to support mitigation in developing countries. Incentives The CDM rewards emissions reductions, but does not penalize emission increases (Burniaux et al ., 2009, p. 41). It therefore comes close to being an emissions reduction subsidy . This can create a perverse incentive for firms to raise their emissions in the short-term, with the aim of getting credits for reducing emissions in

6080-438: The cost of switching from coal to gas could be in the order of €40-50 per tonne CO 2 equivalent. Certified Emission Reductions from CDM projects were in 2006 traded on a forward basis for between €5 and €20 per tonne CO 2 equivalent. The price depends on the distribution of risk between seller and buyer. The seller could get a very good price if it agrees to bear the risk that the project's baseline and monitoring methodology

6175-464: The cost-saving potential of a well-functioning crediting mechanism appears to be very large. Compared to baseline costs (i.e., costs where emission reductions only take place in Annex I countries), if the cap on offset use was set at 20%, one estimate suggests mitigation costs could be halved. This cost saving, however, should be viewed as an upper bound: it assumes no transaction costs and no uncertainty on

6270-515: The current levels of greenhouse gases in the atmosphere. The Paris Agreement (also called the Paris Accords or Paris Climate Accords) is an international treaty on climate change that was signed in 2016. The treaty covers climate change mitigation , adaptation , and finance . The Paris Agreement was negotiated by 196 parties at the 2015 United Nations Climate Change Conference near Paris , France. As of February 2023, 195 members of

6365-603: The delivery of emission savings. Annex I countries who stand to gain most from crediting include Australia, New Zealand, and Canada. In this economic model, non-Annex I countries enjoy a slight income gain from exploiting low cost emission reductions. Actual transaction cost in the CDM are rather high, which is problematic for smaller projects. This issue is addressed by the Program of Activities (PoA) modality. Carbon leakage In theory, leakage may be reduced by crediting mechanisms (Burniaux et al. , 2009, p. 38). In practice,

6460-461: The development interests of host countries. To alleviate this concern, the CDM requires host countries to confirm that CDM projects contribute to their own sustainable development. International rules also prohibit credits for some kinds of activities, notably nuclear power and avoided deforestation . The CDM only gained momentum in 2005 when the Kyoto Protocol took effect. The initial years of operation yielded fewer CDM credits than hoped for, which

6555-493: The first year CDM projects could be registered, 2001, and 7 September 2012, the CDM issued 1 billion CERs. As of 1 June 2013, 57% of all CERs had been issued for projects based on destroying either HFC-23 (38%) or N 2 O (19%). Carbon capture and storage was included in the CDM carbon offsetting scheme in December 2011. Most of the market for CDMs came from European countries, as several countries with high emissions, including

6650-465: The flexibility mechanisms ( Carbon Trust , 2009, p. 6). However, the international negotiations over the follow-up to the Kyoto Protocol agreed that the mechanisms will continue. There were two main concerns about the design of the CDM (Carbon Trust, 2009, pp. 14–15). One was over the additionality of emission reductions produced by the CDM. The other was whether it would allow rich countries and companies to impose projects that were contrary to

6745-487: The following month saw the Kyoto Protocol enter into force. The EU ETS allowed firms to comply with their commitments by buying offset credits, and thus created a perceived value to projects. The Kyoto Protocol set the CDM on a firm legal footing. By the end of 2008, over 4,000 CDM projects had been submitted for validation, and of those, over 1,000 were registered by the CDM Executive Board, and were therefore entitled to be issued CERs (Carbon Trust, 2009, p. 19). In 2010,

6840-403: The future of the CDM and suggested the CDM was in danger of collapse. By that point, the value of a CERs had dropped to 5 USD per tonne of CO 2, from 20 USD in 2008. The following year, the price abruptly crashed to less than 1 USD. As a result, thousands of projects were left with unclaimed credits. Disagreements with what to do with the old credits was a major cause for the perceived failure of

6935-644: The issue of 648,232,798 certified emissions reductions. By 14 September 2012, the CDM Board had issued 1 billion CERs, 60% of which originated from projects in China. India, the Republic of Korea, and Brazil were issued with 15%, 9% and 7% of the total CERs. Ultimately, China was the largest source of CERs by a large margin. The Himachal Pradesh Reforestation Project is claimed to be the world's largest CDM. There are currently 29 transportation projects registered,

7030-475: The last was registered on 26 February 2013 and is hosted in China. Some CDM projects limit or eliminate the industrial emission of greenhouse gases , such as fluoroform (CHF 3 ) and nitrous oxide (N 2 O). For instance, fluoroform, a potent greenhouse gas, is a byproduct of the production of the refrigerant gas chlorodifluoromethane (HCFC-22). Fluoroform is estimated to have a global warming potential 11,000 times greater than carbon dioxide, so destroying

7125-512: The later section, "Stabilization of greenhouse gas concentrations" ). Parties to the Convention have met annually from 1995 in Conferences of the Parties (COPs) to assess progress in dealing with climate change . Article 3(1) of the Convention states that Parties should act to protect the climate system on the basis of "common but differentiated responsibilities and respective capabilities", and that developed country Parties should "take

7220-463: The lead" in addressing climate change. Under Article 4, all Parties make general commitments to address climate change through, for example, climate change mitigation and adapting to the eventual impacts of climate change. Article 4(7) states: The extent to which developing country Parties will effectively implement their commitments under the Convention will depend on the effective implementation by developed country Parties of their commitments under

7315-432: The long-term. Another difficulty is that the CDM might reduce the incentive for non-Annex I countries to cap their emissions. This is because most developing countries benefit more from a well-functioning crediting mechanism than from a world emissions trading scheme (ETS), where their emissions are capped. This is true except in cases where the allocation of emissions rights (i.e., the amount of emissions that each country

7410-596: The media and with the public. It put the 1.5 °C target at the center of climate activism . The United Nations Climate Change Conference are yearly conferences held in the framework of the UNFCCC. They serve as the formal meeting of the UNFCCC Parties ( Conferences of the Parties ) (COP) to assess progress in dealing with climate change, and beginning in the mid-1990s, to negotiate the Kyoto Protocol to establish legally binding obligations for developed countries to reduce their greenhouse gas emissions. Since 2005

7505-545: The onset of global warming by reducing greenhouse gas concentrations in the atmosphere to "a level that would prevent dangerous anthropogenic interference with the climate system" (Article 2). The Kyoto Protocol applied to the seven greenhouse gases listed in Annex A: carbon dioxide (CO 2 ) , methane (CH 4 ) , nitrous oxide (N 2 O) , hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF 6 ) , nitrogen trifluoride (NF 3 ) . Nitrogen trifluoride

7600-465: The organizers, 20% is a tipping point, after which the whole sector begins to irreversibly change. At Berlin, Cancún, and Durban, the development needs of developing country parties were reiterated. For example, the Durban Platform reaffirms that: [...] social and economic development and poverty eradication are the first and overriding priorities of developing country Parties, and that

7695-510: The oversupply of units from the Clean Development Mechanism and Joint Implementation would be 1,400 million units for the period up to 2020 and Point Carbon predicted that Certified Emission Reduction (CER) prices would to drop from €2 to 50 cents. On 12 December 2012 CER prices reached another record low of 31 cents. Bloomberg reported that Certified Emission Reduction prices had declined by 92 percent to 39 each cents in

7790-479: The past 5–15 years, largely due to capacity constraints. National Communication reports are often several hundred pages long and cover a country's measures to mitigate greenhouse gas emissions as well as a description of its vulnerabilities and impacts from climate change. National Communications are prepared according to guidelines that have been agreed by the Conference of the Parties to the UNFCCC. The (Intended) Nationally Determined Contributions (NDCs) that form

7885-549: The pivotal factor for everyone to understand and participate in solving the challenges presented by climate change. ACE calls on governments to develop and implement educational and public awareness programmes, train scientific, technical and managerial personnel, foster access to information, and promote public participation in addressing climate change and its effects. It also urges countries to cooperate in this process, by exchanging good practices and lessons learned, and strengthening national institutions. This wide scope of activities

7980-479: The price of carbon. It is estimated that some $ 95 billion in clean energy investment benefitted from the CDM over the 2002-08 period. The CDM is the main source of income for the UNFCCC Adaptation Fund, which was established in 2007 to finance concrete adaptation projects and programmes in developing countries that are parties to the Kyoto Protocol (World Bank, 2010, p. 262-263). The CDM

8075-409: The project and their agreement that the project will contribute to sustainable development. Then, using methodologies approved by the CDM Executive Board, the applicant industrialised country must make the case that the carbon project would not have happened anyway (establishing additionality ), and must establish a baseline estimating the future emissions in absence of the registered project. The case

8170-429: The purpose of meeting quantified emission limitation and reduction commitments under that article". Article 12.3.b states that "Parties included in Annex I may use the certified emission reductions accruing from such project activities to contribute to compliance with part of their quantified emission limitation and reduction commitments under Article 3[…]". The actual meaning of the principle has been heavily argued since

8265-511: The same country or other countries, or to actual emissions prior to project implementation. The partners involved in the project could have an interest in establishing a baseline with high emissions, which would yield a risk of awarding spurious credits. Independent third party verification is meant to avoid this potential problem. Any proposed CDM project has to use an approved baseline and monitoring methodology to be validated, approved and registered. Baseline Methodology will set steps to determine

8360-401: The signing of Kyoto Protocol in 1997. The COP/MOP is the body that represents the signers/ratifiers of the protocol and they have not been able to agree on a specific definition of the limit on use of flexible mechanisms. The original text has been interpreted to mean that anywhere from 3-50% of emissions could be offset by trading mechanisms. However, the only determination that has been made

8455-663: The slowing European economy. In September 2012, The Economist described the CDM as a "complete disaster in the making" and "in need of a radical overhaul". Carbon prices, including prices for CERs, had collapsed from $ 20 a tonne in August 2008 to below $ 5 in response to the Eurozone debt crisis reducing industrial activity and the over-allocation of emission allowances under the European Union Emissions Trading Scheme. The Guardian reported that

8550-400: The types of actions to be undertaken, allowed for developing countries to tailor their plans to their specific adaptation and mitigation needs, as well as towards other needs. In the aftermath of COP21, these INDCs became Nationally Determined Contributions (NDCs) as each country ratified the Paris Agreement, unless a new NDC was submitted to the UNFCCC at the same time. The 22nd session of

8645-489: Was added for the second compliance period during the Doha Round. The Protocol was based on the principle of common but differentiated responsibilities: it acknowledged that individual countries have different capabilities in combating climate change, owing to economic development , and therefore placed the obligation to reduce current emissions on developed countries on the basis that they are historically responsible for

8740-414: Was established to finance concrete adaptation projects and programmes in developing countries that are parties to the Kyoto Protocol. The Fund is to be financed with a share of proceeds from clean development mechanism (CDM) project activities and receive funds from other sources. An industrialised country that wishes to get credits from a CDM project must obtain the consent of the developing country hosting

8835-536: Was held in Paris in 2015 and resulted in adoption of the Paris Agreement . COP28 took place in the United Arab Emirates in 2023 and included the first global stocktake under the Paris Agreement. The UAE nominated Sultan al-Jaber , who is also head of Abu Dhabi's national oil company ADNOC , to preside over COP28. Azerbaijan will host COP29 in 2024. A subsidiary body is a committee that assists

8930-543: Was not formally adopted by the Conference of the Parties. Instead, the COP "took note of the Copenhagen Accord." As part of the Accord, 17 developed country Parties and the EU-27 submitted mitigation targets, as did 45 developing country Parties. Some developing country Parties noted the need for international support in their plans. As part of the Cancún agreements, developed and developing countries submitted mitigation plans to

9025-476: Was partially ascribed to the underfunded and understaffed oversight bodies. The purpose of the CDM is to promote clean development in developing countries, i.e., the "non-Annex I" countries (countries that are not listed in Annex I of the Framework Convention). The CDM is one of the Protocol's "project-based" mechanisms, in that the CDM is designed to promote projects that reduce emissions. The CDM

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