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Future Development

This workshop presentation explores the complexities of the Clean Development Mechanism (CDM) and its effectiveness in achieving true "clean development" versus mere emission reductions. It evaluates current risks and challenges faced by businesses engaging in CDM projects and proposes strategic improvements. Emphasizing the need for streamlined methodologies and a shift in monitoring approaches, the presentation advocates for a focus on greenfield projects and ensuring access to finance in developing regions. Insights are shared on addressing reputational risks and improving project outcomes.

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Future Development

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Presentation Transcript

  1. Future Development UNFCCC Joint Workshop March 2011 Ciska Terblanche

  2. Content • Introduction • CDM and Risk • Future Development

  3. Introduction • To propose future improvements athoroughunderstanding of the complexities of the existing system is critical • Reflect on the multi-facetted objectives of CDM and assess whether we are achieving the “clean development” objective compared to simply” emission reductions” from existing operations • Question what can realistically be achieved by CDM and then focus on developing mechanisms to achieve this

  4. Current Status: CDM & RISK • Business require a relatively stable environment for investment • Increased Project Risk associated with any normal project when it contains a CDM component • Access to Finance – proof • The time from CDM initiation to issuance is typically 4 years

  5. Private Sector vs. S/M Enterprises Private • CDM projects are associated with high reputational risk • One unsuccessful project could potentially damage the international reputation of a company S/M Enterprises • Cost and Development time

  6. Future Approaches Suggested General • Methodologies and the processes it involves are critical to make the CDM process more efficient • Valuable if people involved in Methodology processing and approval have project development experience • Approach that Methodology developer/Project developer is guilty until proven innocent needs to change • Materiality of methodology components & parameters should be assessed and methodologies should be constructed with this in mind

  7. Future Approaches Suggested • Step Change in the Approach in which methodologies are developed and applied • The structure and principles adopted inexisting methodologies should not necessarily be used as a basis for approving new ones • Monitoring approachescould to be standardised in a rational way, focusing more on taking into account materiality • Apply the concept of ‘clean development’, i.e. focus on Green field projects and not only on switching from an existing more carbon intensive regime to a less carbon intensive regime • Financial analysis is moving further away from what is used in reality for decision making – this needs to be addressed

  8. LDCs, Resource Distribution and Electrification, Clean Development • Positive list of equipment that are additional by default • 1.4 billion people have no access to electricity, 99% in developing countries • Sub-Saharan Africa the electrification rate is 31% (IEA 2010) • Fossil fuel distribution concentrated in developing countries • One can quite safely assume that as countries develop they will utilise their primary fossil fuel resources

  9. Thank You Ciska Terblanche +27828985750

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