Climate Change and Global

Warming

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 Background
• Climate change

• Kyoto Protocol provides the framework

• Cap and trade scheme as most effective tools

• Common but differentiated responsibilities

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 3
Source : UNFCCC
 Anthropogenic Influences on Climate
Change

CO2, CH4 and N2O Concentrations

- far exceed pre-industrial values
- increased markedly since 1750
due to human activities

Relatively little variation before

the industrial era

Source: IPCC 2007a (WG I, SPM, p.3)

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 Future Temperature Rise

Projected Temperatures During the 21st Century Are Significantly Higher Than at Any
Time During the Last 1000 Years

Source: IPCC TAR 2001, p.34

 Historical

1972 (Stockholm) UN Conference on Human Environment

1992 (Rio de Janeiro Earth Summit  Rio Declaration and

Agenda 21

1997 (Kyoto) Kyoto Protocol Signed (185 countries)

2005 Rusia signed  Kyoto Protocol come into

force

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Kyoto Protocol
International agreement linked to the
UNFCC C

Binding targets for 37 Industrialized

Countries and EC to reduce GHG
Emission (five per cent against 1990
levels over the five-year period 2008-
2012)

Convention encouraged industrialized

countries to stabilize GHG emissions, the
Protocol commits them to do so.

Kyoto is a 'cap and trade' system that

imposes national caps on the emissions of
Annex I countries

Source: http://unfccc.int/kyoto_protocol/items/2830.php
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 Continuation….
Kyoto “common but
differentiated
Protocol:
responsibilities.”

Adoption:
Kyoto, Japan, on
11 December 1997

Enforcement:
16 February 2005

183 Parties have

ratified the Protocol
to date
http://unfccc.int/kyoto_protocol/items/2830.php
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 The Kyoto mechanisms

“primarily Countries
meet their target
through national
measures”

Three additional
market based
mechanisms

Emission Trading-(Carbon Market)

Clean Development Mechanism-(CDM)
Joint Implementation-(JI)
http://unfccc.int/kyoto_protocol/items/2830.php
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Clean Development Mechanism (CDM)
Defined in Article 12 of the Allows Annex B Party to
Protocol implement an emission-
reduction project in
Developing Countries

Saleable Certified Emission

Reduction (CER) credits(1
ton of CO2)

Rural electrification
Installation of fuel
efficient Boilers

http://unfccc.int/kyoto_protocol/mechanisms
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 Joint Implementation (JI)
Defined in Article 6 of the
Protocol
Allows Annex B Party to earn
Emission Reduction Units
(ERUs) from ER/R Project
from another Annex B Party
(1 ton of CO2)

Eligibility and approval:

Emission reduction by
source or sink
Projects starting year 2000
ERUs issued for crediting
period beginning 2008

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http://unfccc.int/kyoto_protocol/mechanis
11
ms
The Project Cycle

Project Design
Phase

Project Operational
Phase

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Source: UNFCCC, 2008b
 Project Cycle

TRANSACTION
COSTS

Source : Agrinergy
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CDM Timeline

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 Problem arising : Time constraint

Average times delays for all CDM projects Years

Validation (start comment until request registration) 0.8

Registration (request registration to registration) 0.4

Average number of days from registration until the date
of first issuance: 1.1

Total from start comment to first issuance 2.3

Source : UNEP Risoe

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Baselines
 Overview

 Definition of a baseline

 Baseline Methodologies

 Key Criteria for Establishing Baselines

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 Definitions
 A baseline for a CDM project activity is the scenario that
reasonably represents the anthropogenic emissions by
sources of greenhouse gases that would occur in the absence
of the proposed project activity

 A Baseline Scenario defines likely activities/sources of GHG

emissions in the absence of a CDM project activity

 The baseline methodology describes the

procedure/formulae/algorithm to establish the baseline and
assess additionality of the proposed CDM project.

Source: UNEP 2005, p 16 & 17

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 Baselines

GHG Emissions
Baseline Emissions without CDM/JI

Emissions with CDM/JI

ERs

Historic
Post
Emissions
CDM/JI
Project Emissions
Emissions
Years

Crediting Period
Source: based on Hoopen 2005
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Key Criteria for Establishing Baselines
Transparency

– replicable
– data sources, assumptions, references identified

 Conservatism

- baseline emissions estimated should be on lower

rather than higher side
Source: UNEP 2005, P. 23 & 24
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 Emission Reduction
Emission Reductions
• Baseline emissions (BE)
Emissions that would otherwise take place in the
absence of the project
• Project emissions (PE)
Emissions due to project activity
• Leakage (LE)
Other emissions due to project activity that take
place outside project boundary
Emission Reduction (ER) ER = BE-PE-LE
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•
References
Hoopen, M., 2005. Presentation: CDM Baseline Methodologies, Pusat Tenaga,
Malaysia.
• UNEP, 2005. Baseline Methodologies for Clean Development Projects: A Guide
Book, UNEP Risoe Center, Denmark.
• Long- term prospects of CDm and JI, UAB, 2007
• Transaction Costs of CDM Projects in India – An Empirical Survey, Matthias
Krey, 2004
• Transaction costs of the Kyoto Mechanisms, Axel Michaelowa et al., 2003
• Carbon 2007- A new climate for carbon trading, Point Carbon, 2007
• http://cdm.unfccc.int/Reference/tools/index.html
• Report of The Clean Development Mechanism, Sustainable Development and
its Assessment - Hamburg Institute of International Economics 2006
• Understanding CDM Methodologies _ A guidebook to CDM Rules and
Procedures, Published by Her Majesty’s Government. Printed in the UK
November 2007.
• UNFCCC, 2008a, http://unfccc.int/kyoto_protocol/mechanisms/items/1673.php
• UNFCCC, 2008b,
http://cdm.unfccc.int/Projects/pac/howto/CDMProjectActivity/index.html
• IGIS, 2008abc, CDM in Charts v5.0, Institute for Global Environment Strategies,
Ministry of Environment, Japan

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 References
• CDM & JI Pipeline : UNEP Risoe
• Guideline for CDM process : www.agrinergy.com
• Kyoto Protocol to UNFCCC Text. UNFCCC, 2008
(English version)
• UNEP, 2005. Baseline Methodologies for Clean
Development Projects: A Guide Book, UNEP Risoe
Center, Denmark
• UNFCCC official website:
http://unfccc.int/kyoto_protocol/items/2830.php

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