What is United Nations Framework Convention on Climate Change?
The convention on Climate Change sets an overall framework for intergovernmental efforts to tackle the challenge posed by climate change. It recognizes that the climate system is a shared resource whose stability can be affected by industrial and other emissions of carbon dioxide and other greenhouse gases.
The convention enjoys near universal membership. Latest information on ratifications of the Convention can be found at: http://unfccc.int/essential_background/convention/status_of_ratification/items/2631.php
Under the Convention, governments:
- gather and share information on greenhouse gas emissions, national policies and best practices
- launch national strategies for addressing greenhouse gas emissions and adapting to expected impacts, including the provision of financial and technological support to developing countries
- cooperate in preparing for adaptation to the impacts of climate change
The Convention entered into force on 21 March 1994
What is a Clean Development Mechanism project?
The Clean Development Mechanism (CDM) is one of the flexible mechanisms under the Kyoto Protocol. The CDM offers developed countries (Annex I Countries) the possibility to engage in economically and environmentally competitive emission reduction projects in developing countries (non-Annex 1 countries). Certified emission reductions (CERs) will be issued by CDM Executive Board after completion of the CDM process.
Projects that will be implemented through the CDM have to fulfill additional criteria that will be defined by a national framework of the host countries.
The official United Nations Framework Convention on Climate Change (UNFCCC) CDM website is http://cdm.unfccc.int
Frequently Asked Questions on CDM can be accessed at: http://cdm.unfccc.int/faq/index.html
What is a Voluntary Carbon Market project?
A voluntary carbon market project is similar to a CDM project but it is not regulated by the UNFCCC. There are a variety of different standards that can be applied, dependent on the project type and size. The project developer can select the most relevant standard. Some standards are:
Carbon Fix - www.carbonfix.info
Gold Standard - www.cdmgoldstandard.org
Plan Vivo - www.planvivo.org
Voluntary Carbon Standard - http://www.v-c-s.org
Voluntary carbon market projects generate Voluntary Emissions Reductions (VERs).
Who is a non-Annex I country?
Non-Annex I countries are developing countries, under the Kyoto Protocol. Non-Annex I countries do not have legally binding emissions reductions targets. Samoa Island is a Non-Annex I country.
How do developing countries benefit from the carbon market?
Developing countries benefit from the carbon market through the provision of an extra revenue stream for projects that reduce greenhouse gas emissions and contribute to the sustainable development of the country.
Who is an Annex I country?
Annex I countries are developed countries and countries undergoing the process of transition to market economy. All Annex I countries have specific limitation targets for greenhouse gas emissions.
How do developed countries benefit from the carbon market?
All Annex-I coutnries (except Belarus and Turkey) have legally binding green house gas emission reduction requirements under the Kyoto Protocol. The Clean Development Mechanism is one of the "flexibility mechanisms" of the Protocol to help these countries meet these targets. Instead of countries reducing emissions in their own companies, Annex I countries can buy emission reductions from non-Annex I countries. For example, a CDM project such as a company switching fuels from coal to biomass results in a reduction of 100,000 tonnes of carbon dioxide per year in the atmosphere. If an Annex I country buys these credits, they can count towards the country's Kyoto reduction targets.
In the voluntary carbon market, carbon credits are purchased by companies or individuals in order to help reduce their impact on climate change. Companies may purchase carbon credits in order to become "carbon neutral" or "green" companies. Individuals may purchase offsets in order to offset their emissions from activities such as flying.
What is the CDM Executive Board (EB)?
The CDM Executive Board (EB) supervises the CDM, under the authority and guidance of the Conference of Parties/Meeting of Parties to the Kyoto Protocol. The EB is the technical committee of the United Nations Framework Convention on Climate Change (UNFCCC). The EB is responsible for registering CDM project activities and for the operationalization of accreditation procedures and standards. Additionally,the EB is ini charge of issuing CERs in accordance to the verification reports made by the Designated Operational Entity (DOE) and allocating the CERs into the Kyoto Protocol registry accounts. The Board comprises 10 experts drawn from the parties to the Kyoto Protocfol as follows: one representative from each of the five United Nations regions (Africa, Asia, Latin America and the Caribbean, Central Eastern Europe and OECD), two representatives from Annex I and Non-Annex I countries respectively and one representative from the small island developing states. There are also 10 alternatives to the EB. The EB elects its own Chair and Vice Chair, with one being a member from an Annex I country and one from a non-Annex I country.
What is a Designated Operational Entity (DOE)?
A Designated Operational Entity (DOE) is a company accredited by the CDM Executive Board that assess whether a project fulfills CDM criteria. A CDM project must be checked by two processes: Validation and Verification. Validation is done once before initial project approval. Verification is done periodically after the project has been approved or registered.
Voluntary carbon market standards allow validations and verifications by CDM accredited DOEs and/or DOEs approved by the voluntary carbon market organization. Alist of accredited DOEs can be found here: http://cdm.unfccc.int/DOE/index.html
What is a Designated National Authority (DNA)?
All countries wishing to undertake CDM activities are required, according to the Kyoto Protocol, to appoint a Designated National Authority (DNA). One of the key tasks of the DNA is to establish an efficient and transparent national CDM project approval procedure fo rhte evaluation of project ideas submitted to the authority and, in particular, to verify the projects' conformity to the national sustainable development criteria. Upon approval, the DNA is responsible for issuing the host country letter of approval (LoA) to the CDM project proponent, which is required before the project can be registered by the Executive Board.
What is a Project Design Document (PDD)?
This is the principal document used by project participants to receive CDM and voluntary carbon market project approval. Its formatt is outlined in Appendix B of the Modalities and Procedures of the CDM. Its contents are evolving, and may change over time as the Executive Board (EB) of UNFCCC is continuously working on improving the modalities and procedures of the CDM. MOst voluntary carbon market standards utilize the CDM PDD fromat but some of the standards have their own standard-specific format.