How to develop a CDM Project?

Project Identification :

Identify a potential project. This is dependent on the business interest of potential investors and statutory requirements of the competent authorities.

Estimating the Green House Gas emission benefits:

The project should have details on the GHG emission calculation and monitoring it over a stipulated period of time. The quantification process includes :

Definition of the boundaries of the project – ie the list of project activities that involves intake or release of greenhouse gases like carbon di oxide, methane etc.
Description of the baseline and additionality – baseline scenario represents what would happen in the absence of the project. Additionality is the extent to which the activities promoted by the project (e.g. the planting of trees) can only have happened with the project’s specific intervention
Quantification of baseline emissions and crediting period – the emissions that would occur with the baseline scenario, and the number of years over which the project may take credit, will be defined using one of the procedures approved by the CDM Executive Board.
The emissions and uptake of carbon by the project – in the case of afforestation and reforestation projects, the uptake of carbon will be calculated using forestry growth data. The net benefit of the project is then calculated by subtracting the emissions that would have occurred in the baseline scenario.
Adjustment for leakage and risk – The amount of benefit for which a project will be allowed to take credit may need to be adjusted to take account of leakage and risks.

Develop a PDD ( Project Design Document)

The results and methodologies used in the quantification of the greenhouse gas benefits will need to be presented in a Project Design Document. A report summarising comments by local stakeholders and how these are taken into account in the project design must also be included in this document.

Host country approval

Any project wishing to participate in the CDM must obtain approval from the host government. A pro-active government National Authority for CDM will facilitate this. In addition, the host government should determine whether or not the project will lead to sustainable development benefits.

Validation of the project

Before projects can produce emission reductions that will be recognised by the CDM, they must be ‘validated’ by one of the independent companies approved by the CDM Executive Board. The project developer must submit the Project Design Document and any related documentation to the so-called ‘operational entity’. The process will involve detailed scrutiny of the institutional capacity of the project stakeholders, the evidence underlying the calculations of carbon benefits, the systems to be used for monitoring, and of course the relevant government approvals. During this period, the Project Design Document will be made publicly available for comments.

Registration with the CDM

The validation report and Project Design Document will be submitted to the CDM Executive Board by the operational entity. Registration will be finalised after a maximum of 8 weeks from receipt, unless a review is requested.

Project implementation and monitoring

Registered projects, and those that have entered the implementation phase, will be required to maintain internal monitoring systems to demonstrate they are achieving the emission reductions specified in the Project Design Document.

Verification and certification.

Once the project is being implemented, it will undergo additional scrutiny by the operational entities in the form of verification and certification. The verification report is then made available to the CDM Executive Board and the general public, after which the Certified Emission Reductions will be issued to the project developer within 15 days, unless the Executive Board requests a review.

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How to develop a CDM Project?

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