Ensuring Sustainability of Clean Development Mechanism Projects for

Global Sustainable Development

Aaron Burton

Outline

• Introduction• CDM Beginnings and Definition• Sustainability of the CDM process –

framework issues• Evaluation of CDM Decision-Making

methods• Conclusions and further research

Introduction

• Climate change is a large multi-actor problem• Kyoto protocol represents cooperation between

these levels• Intrinsic links between climate change and

sustainable development• Research undertaken in 2006 with Murdoch

University ISTP combined with a World Bank consultancy project in Bangladesh– Can a CDM project in poultry waste management

achieve sustainability outcomes in practice?

Climate Impacts- Developing Countries

CDM Beginnings

• UNFCCC negotiations recognised cost-effective mitigation strategies for reducing GHG– Legally non binding pledge to reduce

emissions to 1990 levels by 2000 (Rio 1992)• Kyoto Protocol agreed in 1997 to achieve

a stabilisation and begin to address global climate change– Reduction by 5% compared to 1990 levels by

2008-12 for Annex-1 countries

CDM Beginnings 2

• Kyoto Protocol ratified 16/02/2005• Several flexible market based mechanism

introduced in recognition of enormous cost of emission reductions• Common Targets (“Bubbles”)• Emission Trade• Joint Implementation• Clean Development Mechanism

Clean DevelopmentMechanism - Defined

• Dual objectives– assisting developing countries to achieve

sustainable development– provide cost-effective emission reduction for

industrialised countries

The purpose of the clean development mechanism shall be to assist Parties not included in Annex I in achieving sustainable development and in contributing to the ultimate objective of theConvention, and to assist Parties included in Annex I in achieving compliance with their quantified emission limitation and reduction commitments under Article 3.

CDM vs Typical Investment

CDM Projects

CDM Issues

• Not setting criteria – no limits to achievement• However, lack of a minimal standard

– High SD value projects being priced out by more cost-effective projects with lower SD benefits

• Competition between non Annex-1 countries resulting in setting low sustainable development standards

• Sovereignty issues“it is the host Party’s prerogative to confirm whether a clean development mechanism project assists it in achieving sustainable development but it is the host country prerogative to decide thesustainable issue”.

Impacts

• Governments knowingly/ unknowingly accepting projects with negative effects due to no assessment

• Lack of institutional capacity and little guidance• Missing EIA legislation and weak practice EIA in

developing countries• Direct impacts

– Intergenerational equity of selling cheap GHG control options leaving only the more expensive options for future generations

Sustainability AssessmentBalancing the dual objectives

Therefore,Sustainability assessment is required toensure sustainability outcomes for the hostcountry and to further global sustainabledevelopment

CDM Process

Best Practice SA

• Best practice sustainability assessment is required to ensure the dual objectives are met

• Sustainability decision making methods were evaluated according to best practice– Methods described– Evaluated according to 3 criteria– Findings summarised

Methods Reviewed

Multidimensional qualitative analysis in Brazil (Motta, Srivastava, and Markandya2002)

Checks as part of validation.

World Bank PCF Method (Huq2002)

Synergy Method (SYNERGY 2004)

SouthSouthNorth Matrix Approach (Thorne and Raubenheimer 2002; Burian 2006)

WWF Gold Standard (Burian2006)

Analytical Hierarchy Process (AHP) in India (Motta, Srivastava, and Markandya2002)

Matrix and Screens by Bangladesh DNA (Waste Concern 2005)

Stakeholder analysis and MCA (Brown et al. 2004)

MATA-CDM/ Sustainability Check-up (Sutter and Parreno 2005; Burian2006)

MCA Egypt (Olhoff et al. 2004)

OtherRankingMCA

EvaluationDimensions

BestPractice

AssessmentProcess

IndicatorsEfficiency

Evaluation- Assessment Process

Criteria Importance/ Relevance Does the assessment guarantee valid results?

Important to ensure the quality of the decision making method. Important for validity, verification and withstanding third-party scrutiny.

Is there adequate scoping (assessment of reasonable alternatives and possible cumulative effects)?

Assessment of alternatives for similar purposes and their relative outcomes enables choice of the best option. Cumulative effects of proposed or operating projects must be accounted for in assessment.

Is this scoping transparent and inclusive of stakeholder views?

Scoping needs to be based on stakeholder views to meet local concerns or requirements.

Is there attention paid to long-term whole of project life factors?

Project construction, operation and decommissioning needs to be considered for all social, economic and environmental impacts.

Does the method provide for a systematic ranking or scoring of projects?

This is essential in providing information to the decision maker for evaluation. The transparency of the methods as shown in these results is also important.

Evaluation- Indicators

• Examples– Have indicators been developed with public

participation?– Are indicators useful for a broader sustainability

agenda (information for regional, national and international frameworks)?

– Are technological indicators included separately?– Is data available and for what cost?– Are indicators applicable only to specific sectors?– Do indicators ensure positive outcome rather than

focussing on prevention of negative outcomes

Evaluation- Efficiency

CDM rules cover areas of additionality, project areas and other factors.

Does the assessment cover area already part of the CDM rules and assessment process?

Importance/ RelevanceCriteria

Best Practice Decision Making

• MCA most appropriate for formal assessment of CDM

• Ranking methods suitable for initial assessment at PIN/PCN level

• Indicators too sector specific• Public participation is essential• Need linkages beyond assessment

Conclusions

• CDM has the potential to be a powerful tool for sustainable development and emissions reductions

• Potential issues with cost-effective favoured over highly sustainable projects

• Many SA methods applied but no standard or best practice

• MCA identified as best for formal assessment• Subsequent best practice method developed

and applied to a Bangladesh poultry waste case study

Thank You

Questions….

For more information:

Email: aaronhburton@yahoo.co.ukMob: 07704351399