A CER discounting scheme could save climate change regime after 2012

Climate Policy

Volumn 7, Issue 2, 2007, Pages 171-176

  Chung, Rae Kwon ^a  

^a The UN Economic and Social Commission for Asia and the Pacific (ESCAP)

Author keywords

CDM; CERs; Non Annex 1 country commitments; Political decision making; Post 2012 negotiations

Indexed keywords

CLEAN DEVELOPMENT MECHANISM; CLIMATE CHANGE; DECISION MAKING; DEVELOPING WORLD; EMISSION CONTROL; ENVIRONMENTAL PLANNING; ENVIRONMENTAL POLITICS; GREENHOUSE GAS; KYOTO PROTOCOL;

EID: 37349025727     PISSN: 14693062     EISSN: 17527457     Source Type: Journal    
DOI: 10.1080/14693062.2007.9685647     Document Type: Article

References (7)

1. Non-Annex I Parties are mostly developing countries. Certain groups of developing countries are recognized by the Convention as being especially vulnerable to the adverse impacts of climate change, including countries with low-lying coastal areas and those prone to desertification and drought. Others (such as countries that rely heavily on income from fossil fuel production and commerce) feel more vulnerable to the potential economic impacts of climate change response measures. The Convention emphasizes activities that promise to answer the special needs and concerns of these vulnerable countries, such as investment, insurance and technology transfer (see http://unfccc.int/ parties_and_observers/items/2704.php).
2. Annex I Parties include the industrialized countries that were members of the OECD (Organisation for Economic Cooperation and Development) in 1992, plus countries with economies in transition (the EIT Parties), including the Russian Federation, the Baltic States, and several Central and Eastern European States (http://unfccc.int/parties_and_observers/ items/2704.php).
3. Discounting of CERs is different from banking of CERs for future commitment, as this idea proposes to retire the unsold CERs completely from the carbon market. The CDM Executive Board could issue only a certain proportion of the total CERs at the time of the issuance of CERs even before it reaches the hands of project developers.
4. This does not mean that only CERs from unilateral CDM should be discounted. Discounting should be done for all CERs whether they are from bilateral or unilateral CDM. Discounting of CERs from unilateral CDM is a direct emission reduction made by non-Annex I countries. However, discounting of CERs from bilateral CDM could also be a reduction made in non-Annex 1, generated from the projects invested from Annex 1.
5. There are different interpretations of the meaning of 'unilateral'. One interpretation is: 'non-Annex I initiating a CDM project and banking the CERs for its future commitment; thus selling the CERs to Annex I is not unilateral'. Another is: 'completing a CDM project by the non-Annex I without any involvement of Annex I until CERs is generated; thus a CDM project based on a CER purchasing agreement is not unilateral'. The definition of 'unilateral' in this article is 'a CDM project whose ownership and project risk belongs to non-Annex I entities for the purpose of selling the CERs to Annex I buyers'.
6. There are three additionality criteria for CDM: project additionality, technical additionality and financial additionality. The author believes that the technical and financial additionality aspects should be maintained, but not project additionality.
7. See www.china.org.cn/english/features/guideline/156529.htm