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IETA - The State of the CDM 2010

IETA - The State of the CDM 2010

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Our annual report on the Clean Development Mechanism, released during COP16 in Cancun.
Our annual report on the Clean Development Mechanism, released during COP16 in Cancun.

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!"#$%&'&#$()$&"#$*+,$-#.(/&$0112$concentiateu on iuentifying the CBN's most chionic challenges anu putting
foiwaiu solutions to auuiess them. The 2u1u -#.(/& maintains that focus because, while gieat changes have
taken place this yeai, gieat challenges iemain. With cleai CNP guiuance, IETA believes the iemaining issues
can be auuiesseu in 2u11.

In oui attempt to make this uocument incieasingly accessible to negotiatois, this yeai's veision aims to be
moie concise anu even moie focuseu on the coie issues holuing back the CBN. In the main uocument, we focus
oui comments on those challenges that most affect the efficiency of the CBN÷ issues incluuing the absence of
mateiiality: the baiiieis to taking uifficult policy uecisions: anu the long uelays foi iegistiation anu issuance.
Foi even fastei ieauing, the Annex consoliuates anu pioviues explanations foi all of IETA's iecommenuations.

Last yeai's -#.(/&$ focuseu on the following S enuuiing pioblems: unielenting time constiaints, ineffective
communication piactices, lack of tianspaiency, slow policy uevelopment anu inauequate iesolution of issues,
anu inauequate numbei anu expeitise of Secietaiiat staff. Both the Repoit anu its annex highlight wheie those
pioblems iemain, if they have been auuiesseu, anu how they can be impioveu fuithei in ways that will
enhance the efficiency of the CBN.

2,%3&/,)/4,)0,56&'&'()#4677,'(,%8).*9:)63376$1%)/4,)4601);"0<)"+)/4,)*=)6'1)/4,)>,#0,/60&6/)"?,0)/4,)
36%/)-,60@ Faceu with a mammoth backlog anu uaunting policy woikloau, they have peiseveieu to implement
some veiy significant changes to the Secietaiiat stiuctuie anu to the iegistiation, issuance, anu ieview
pioceuuies, among otheis. While the juiy is still out as to whethei the iefoims will be ultimately successful,
theie is no question that CBN stakeholueis iecognize the EB anu Secietaiiat's uevotion to impioving the CBN.

A',)60,6)&');4&#4)',&/4,0)/4,)>,#0,/60&6/)'"0)/4,)*=)#6')4,73)$%8)4";,?,08)&%)/4,)&%%$,)"+)/4,)+$/$0,)"+)
/4,) B2C@ Piioi to Copenhagen, hopes weie high that an inteinational agieement woulu be ieacheu, tiust
ieneweu in the 0NFCCC system, anu wiue-ianging CBN iefoims agieeu. The Copenhagen Accoiu was piaiseu
by some anu ciiticizeu by otheis, but what it uefinitely uiu not uo was auuiess any of the longei-teim issues
iegaiuing the CBN oi new flexible mechanisms. Woise yet, a iecently ieleaseu note by the 0NFCCC Secietaiiat
on legal consiueiations ielating to a possible gap between commitment peiious of the Kyoto Piotocol has leu
to incieaseu unceitainty iegaiuing the continuation of the CBN anu the secuiity of CBN investments. 0nly the
CNP can iesolve this issue, as the inteipietation of the Kyoto Piotocol iemains theii puiview. IETA uiges them
to uo so in Cancun.

.*9:D%) EFGH) 5,5I,0) #"536'&,%) I,7&,?,) /46/) /4&%) 1"#$5,'/) 6'1) &/%) 6'',J) "+) 0,#"55,'1,1) K+$0/4,0)
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B6'#$') /67<%) I,(&'@ CBN iefoim still matteis gieatly to those woiking within anu committeu to the long-
teim success of the mechanism. As in all pievious euitions, this -#.(/& pioviues pioposals foi iefoim that will
ensuie continueu piivate sectoi inteiest in this successful enviionmental mechanism.



IETA: The State of the CDM 2010

2


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IETA: The State of the CDM 2010

3

*++&#&,'#-)&%)6)0,76/&?,)6%%,%%5,'/)06/4,0)/46')6)I76#<U6'1U;4&/,)V$1(5,'/@)Even so, IETA can
iuentify a numbei of aspects of the CBN system that continueu to iesult in significant inefficiencies in
2u1u.

• Continuing uelays
• Inauequate communication with stakeholueis
• Slow, opaque anu inauequate uecision-making pioceuuies
• Failuie to incoipoiate stanuaiuization into the CBN, incluuing mateiiality

The iemainuei of this uocument auuiesses each of these issues in tuin.

B"'/&'$&'()2,76-%)

*J376'6/&"')

As we noteu in last yeai's$ -#.(/&, IETA has iepeateuly highlighteu the stiuggle of the CBN EB, Panels,
Woiking uioups, anu Secietaiiat to successfully manage theii woikloau, to auuiess key issues
expeuitiously anu compiehensively, anu to anticipate futuie uevelopments anu piepaie foi them in
auvance. Extensive anu costly uelays in iegistiation anu issuance anu slow uecision-making on impoitant
policy issues have been the noim, not the exception.

This yeai, the EB anu Secietaiiat have uevelopeu anu implementeu new iegistiation, issuance, anu
ieview pioceuuies, paitly as a iesult of last yeai's guiuance fiom the CNP. As the pioceuuies have only
been implementeu ovei the past few months, they have not been in place long enough foi IETA to make a
uefinitive juugment on theii impact on efficiency. Even so, IETA commenus the massive effoit it has taken
to iefoim the pioceuuies anu, uespite some ongoing challenges, has been heaiteneu to see such a
significant iefoim take shape.

Similaily, IETA has watcheu with intense inteiest ovei the past yeai as the EB, having taken onboaiu a
pievious suggestion fiom IETA, ueciueu to iestiuctuie the Secietaiiat. The new stiuctuie splits the policy
team into thiee units: Stanuaiu Setting 0nit, Pioject anu Entity Assessment 0nit, anu Piocess
Nanagement 0nit, with thiee othei units suppoiting them, incluuing a Stakeholuei Bevelopment 0nit.
The new stiuctuie is intenueu to gioup staff in teims of logical 'functions' anu ensuie that the staff
membeis woiking within each function aiea aie inteichangeable in times of fluctuating neeu. IETA
stiongly suppoits these effoits as well as the effoits to piioiitize anu auu flexibility into the seaich to fill
vacancies within the Secietaiiat. Among othei changes, the Secietaiiat has begun to use 'fiamewoik
contiacts' to take auvantage of exteinal iesouices anu outsouice activities when possible. IETA believes
that the infusion of such uynamism to the CBN's management piocess is a sign of ieal piogiess.

As this Repoit was uiafteu, these changes seemeu to be having a positive effect. 0uite uiastic ieuuctions
in piocessing time foi iegistiation anu issuance completeness checks have mateiializeu iecently. The
table below shows the impiovements in piocessing time foi completeness checks of iegistiation anu
issuance ovei the past five weeks.

Table 1: Aveiage Completeness Check 0utput foi Registiation anu Issuance

W,(&%/06/&"')
9¡1u¡1u-12¡11¡1u (pievious 6wks) 2S files¡week
9¡1u¡1u-12¡11¡1u (most iecent) 4S.6 files¡week
.%%$6'#,) )
9¡1u¡1u-12¡11¡1u (pievious 6wks) 21 files¡week
9¡1u¡1u-12¡11¡1u (most iecent) S1.4 files¡week

Bespite these welcome changes, negotiatois shoulu be fully awaie that the cuiient situation with iegaiu



IETA: The State of the CDM 2010

4
to iegistiation anu issuance continues to waiiant close suiveillance. The Secietaiiat iemains wiuely out
of compliance with the CBN Noualities anu Pioceuuies' oiiginal timelines foi iegistiation anu issuance
iequests. Accoiuing to the Secietaiiat's own analysis of compliance with inuicative timelines, a iequest
foi iegistiation piocesseu unuei the new pioceuuies faceu an aveiage 'waiting time' of 87 uays, anu a
iequest foi issuance faceu an aveiage waiting time of 98 uays. This waiting time sits outsiue of the official
inuicative timelines, which then allow foi a 7-uay completeness check, 2S-uay infoimation & iepoiting
check, anu 28-uay iequest foi iegistiation oi issuance peiiou. Annex S to the agenua foi EB S8 stateu that
the Secietaiiat is planning to ieuuce the waiting time to less than Su uays by the enu of 2u1u foi
Registiation anu by the enu of Ianuaiy 2u11 foi Issuance. IETA believes that auuing an auuitional uelay
of Su uays to each submission is unacceptable anu that such a waiting time shoulu not exceeu 7 uays, if
waiting time is necessaiy at all.

Fuithei, one paiticulai aspect of the new pioceuuies has alieauy pioven to inciease iathei than ueciease
uelays. As a pait of the new pioceuuie, the Secietaiiat has been senuing submissions founu to have
eiiois to the back of the queue foi scheuuling foi completeness check. In othei woius, they begin
'waiting' all ovei again. IETA unueistanus the neeu to incentivize pioject paiticipants to submit high
quality submissions in oiuei to ieuuce the time spent evaluating anu coiiecting them. That being saiu,
the pioceuuie implementeu touay has seiious pioblems. Fiist, it may make sense to apply such a penalty
if the Secietaiiat itself is on-scheuule, but it is unieasonable to auu an auuitional two to thiee months
waiting time foi piojects alieauy uelayeu fai beyonu the existing timelines. In such cases, the pioject
uevelopeis have waiteu much longei than necessaiy anu shoulu not be penalizeu fuithei. Noieovei,
many of the issues foi which piojects aie ietuineu uuiing the completeness check aie minoi, immateiial
issues that coulu be coiiecteu in a mattei of minutes. In otheis, they constitute an application of iules
that weie maue only aftei the pioject hau been submitteu, anu so aie being applieu ietioactively. Finally,
some simply uemonstiate a lack of unueistanuing of technical issues by the Secietaiiat ieviewei. The
table below pioviues examples of iecent messages ieceiveu by IETA membeis.
)
Table 2: Incompleteness Nessages anu Explanation

.'#"537,/,',%%)5,%%6(,)) L0"I7,5);&/4)/4&%)5,%%6(,)
%./#'34"##&$54$./(&#6&#37$%89:5&$;5&"(8&$./(&#6&5(<7$ Ninoi issue. Secietaiiat coulu simply
iequest passwoiu in a shoit phone call oi
email.
!"#$3'&#$(<$.'=#$>$()$&"#$?#/5)56'&5(<$/#.(/&$54$<(&$5<$@<=A54"7$
$
Simple typo. Bates may be wiitten Su
times in a uocument. Nistakes will
happen.
!"#$ :#&"(3(A(=B$ 54$ 53#<&5)5#3$ '4$ C,11D0$ 5<$ &"#$ 6#/&5)56'&5(<$
4&'&#:#<&$ ;"5A#$ &"#$ '..A5#3$ :#&"(3(A(=B$ )(/$ &"#$ ./(E#6&$ 54$
C,11DF7$
Simple typo. It is obvious fiom the PBB
that the coiiect methouology is ANuuS4.
G8/&"#/$ #H.A'5<$ "(;$ &"#$ 5<.8&$ ?'A8#$ ()$ 5<?#4&:#<&$ 6(4&$ 5<$ &"#$
5<?#4&:#<&$ '<'AB454$ 54$ 485&'9A#I$ '4$ &"#$ '6&8'A$ 6(<&/'6&4$ )(/$ &8/95<#$
'<3$ 6(<4&/86&5(<I$ '4$ &"#$ :'5<$ .'/&$ ()$ &"#$ 5<?#4&:#<&I$ 6(<&/598&#$
(<AB$JKL$()$&(&'A$#4&5:'&#3$5<?#4&:#<&$6(4&7M$
Bemonstiates lack of unueistanuing by
the Secietaiiat, not a lack of infoimation.
%./#'34"##&$(<AB$6(<&'5<4$&"#$@G$N#:5445(<$)'6&(/O$6'A68A'&5(<I$<(&$
@-4$P#:5445(<$/#386&5(<4Q7$
This is not a iequiiement.
%894&'<&5'&#$5<.8&$?'A8#47$ Retioactive application of a new iule.

The examples listeu above have been typical since the new pioceuuies have been implementeu. PBBs aie
moie than a hunuieu pages long in many cases anu go thiough multiple ievisions by uiffeient staff
membeis, many of whom aie often non-native English speakeis. Even though they aie pioofieau seveial
times befoie submission, small mistakes will iemain. It is simply unieasonable to expect a PBB to be
peifect.

Noieovei, iathei than impioving the efficiency of the iegistiation anu issuance piocesses, this piactice
has leu to incieaseu uelays, as the Secietaiiat must ie-check the entiie pioject uocumentation when it



IETA: The State of the CDM 2010

5
comes up again. Appioximately one-fifth of all piojects unueigoing completeness check each month aie
ie-submissions.

W,#"55,'16/&"'%)
)
While IETA iemains hopeful that iecent impiovements will continue anu timelines will soon be met, the
histoiically slow pace of change within the CBN cautions against assuming this will be the case. To put it
simply, CBN stakeholueis cannot affoiu to wait anothei yeai befoie auuitional guiuance is pioviueu by
the CNP iegaiuing biinging iegistiation anu issuance piocesses into compliance with establisheu
timelines. It is key that the CNP ienew anu intensify the signal to the EB anu Secietaiiat that these
massive uelays aie unacceptable anu give hope to CBN stakeholueis that theii valiu conceins will be
auuiesseu.

Foi this ieason, IETA iecommenus that the CNP make a numbei of iequests of the EB anu Secietaiiat
iegaiuing the new iegistiation anu issuance pioceuuies anu cuiient uelays in the iegistiation anu
issuance piocesses, incluuing but not limiteu to the following:

• -#R8#4&4 the Executive Boaiu, togethei with its suppoit stiuctuie, to uevelop anu implement a
stiategy to biing each of its pioceuuies into compliance with its establisheu timelines by 1 Apiil
2u11, with a maximum 7-uay wait peiiou befoie beginning completeness check.

• -#R8#4&4 the Executive Boaiu, fiom 1 Apiil 2u11, to iefunu the iegistiation fee of all pioject
submissions foi which the timelines foi the piocessing of iequests foi iegistiation anu issuance
aie bieacheu by moie than 4 weeks in total.

• *A'/5)5#4 that the goal of the ieviseu iegistiation, issuance, anu ieview pioceuuies shoulu be to
inciease the efficiency, pieuictability, anu pioceuuial uue piocess of the CBN.

• G8/&"#/$ 6A'/5)5#4 that 'alteinative timelines' shoulu iesult in shoitei, moie efficient iegistiation,
issuance anu ieview piocesses.

• -#R8#4&4 the Executive Boaiu to ievise its pioceuuies foi iegistiation anu issuance to pioviue foi
minoi issues in completeness checks to be uealt with thiough uiiect telephone anu¡oi email
communication between the Secietaiiat anu B0E¡Pioject Paiticipant anu not iesult in the
iecommencement of the completeness check piocess, incluuing waiting peiiou.

.',++,#/&?,)B"55$'&#6/&"');&/4)>/6<,4"71,0%))
)
*J376'6/&"')
)
Effective communication can pioviue a gieat boon in teims of efficiency, which is why IETA has
suggesteu that the EB implement moie flexible anu uiiect communication piactices foi seveial yeais.
Last yeai, the CNP paitially answeieu oui call anu iequesteu that the EB enhance communications with
pioject paiticipants anu stakeholueis, incluuing thiough the establishment of moues of uiiect
communication between the EB anu pioject paiticipants in ielation to inuiviuual piojects.

To theii cieuit, the EB anu Secietaiiat have taken some steps to impiove communication piactices this
yeai. The Secietaiiat oiganizeu two CBN Rounutable meetings foi stakeholueis to meet with some EB
membeis anu the Secietaiiat to uiscuss conceins anu possible solutions. IETA also appieciates the
cieation of the new Stakeholuei Bevelopment 0nit within the Secietaiiat, the establishment of which
sent a positive signal to CBN stakeholueis.

Bespite these effoits, howevei, the EB anu Secietaiiat have not implementeu the changes in stakeholuei
communication that aie iequiieu to significantly inciease the efficiency of the CBN. Nost notably, the
uiiect moue of communication iequesteu by the CNP has not been cieateu. A shoit uiscussion on the



IETA: The State of the CDM 2010

6
issue took place at EB S8 but no conciete plans foi implementation have been put foiwaiu. Inueeu, IETA
believes that pioject paiticipants neeu not one but seveial oppoitunities to uiiectly communicate with
the EB anu¡oi Secietaiiat, iegaiuing completeness checks, ieviews, anu claiification questions, among
otheis. IETA iemains convinceu that time woulu be saveu if simple email anu telephone communication
weie useu fiequently, anu foi cleaily establisheu puiposes.

Similaily, though the Secietaiiat has expiesseu the intention to impiove timelines foi answeiing
unsoliciteu coiiesponuence÷ stakeholueis only uiiect foim of communication to the EB÷ IETA has not
witnesseu a noticeable ieuuction in the time it takes to ieceive a iesponse aftei a lettei is sent. Inueeu, in
IETA's view the piocess of wiiting anu ieceiving iesponses to unsoliciteu letteis iemains ceiemonial,
with iesponses caiiying little if any utility foi stakeholueis. Nost issues upon which IETA wiites, foi
example, aie time sensitive. In most cases, by the time the EB "iesponus" to them, a uecision has alieauy
been taken oi the item pusheu fiom the agenua entiiely. A moie piouuctive system foi consiueiing anu
iesponuing to unsoliciteu stakeholuei coiiesponuence is neeueu.

W,#"55,'16/&"'%)
)
As noteu above, IETA believes that the EB shoulu gieatly expanu the communication avenues foi CBN
stakeholueis. We suggest that the CNP iequest the following of the EB:
)
• -#R8#4&4 the Executive Boaiu to enhance communications with pioject paiticipants anu
stakeholueis, incluuing thiough the establishment of moualities anu pioceuuies foi uiiect
communication between the Executive Boaiu anu pioject paiticipants in ielation to inuiviuual
piojects at all stages of the pioject cycle, as iequesteu in paia 8 of
FCCC¡KP¡CNP¡2uu9¡21¡Auu.1.

• -#R8#4&4 the Executive Boaiu to uevelop anu implement, as soon as possible, a foimal pioceuuie
foi consiueiing unsoliciteu stakeholuei coiiesponuence, incluuing timelines anu an option to
uiiect letteis to specific panels, woiking gioups, oi teams in the Secietaiiat, in auuition to the
Executive Boaiu.
$
• -#R8#4&4$the Executive Boaiu to uevelop anu implement an email inteiface anu telephone hotline
foi CBN pioject paiticipants, B0Es, anu BNAs to ask simple claiification questions foi cleaily
establisheu puiposes.

)
>7";8)"36M$,8)6'1)&'61,M$6/,)1,#&%&"'U56<&'()30"#,1$0,%)
)
*J376'6/&"')
)
0vei the past yeai, one of the gieatest fiustiations of CBN pioject paiticipants has been the slow,
opaque, anu inauequate uecision-making pioceuuies of the EB. The speeu with which uecisions aie
taken, if at all, anu the final uecisions taken consistently fail to meet expectations.

It iemains the case that when issues aie uiscusseu, they aie often inauequately oi only paitially iesolveu.
The conceins about Chinese winu anu hyuio electiicity piojects anu the ensuing uiscussion on tieatment
of emissions ieuucing policies, ievieweu extensively in last yeai's -#.(/&I$ continueu thioughout most of
2u1u. At its SS
th
meeting, the EB suuuenly uiscontinueu its uiscussion of its guiuance on the tieatment of
national policies, without issuing the claiification oi guiuance iequesteu by CNP S. The fact that almost
all of the uiscussions on the issue weie unueitaken in closeu session meant that CBN stakeholueis coulu
not ueteimine, let alone assist the EB with the issues that pieventeu them fiom taking action. Such
opaque uecision-making piocesses aie incieuibly inefficient because they pievent the CBN's laigest,
most expeiienceu iesouice÷ pioject paiticipants÷ fiom paiticipating in the piocess of finuing a
solution to a complex pioblem.




IETA: The State of the CDM 2010

7
Regaiuless of the cause, howevei, this is only one illustiation of the EB's iecent challenges in agieeing
upon anu issuing cleai guiuance on ciitical policy issues, which is iequiieu to meet the objectives of the
CBN anu theiefoie$ shoulu be the EB's piimaiy objective. Insteau of tackling uifficult policy issues anu
pioviuing necessaiy guiuance, the EB continues to ieject piojects anu issue a veiy laige numbei of
iequests foi ieviews (RfRs). Pioceeuing by means of case-by-case RfRs anu iejections when claiifying
guiuance is obviously neeueu is cleaily inefficient: it leaus to unnecessaiy uelays anu auueu costs foi all
piojects of that type, iesults in unceitainty foi investois, anu cieates a laige amount of auuitional woik
foi the time-constiaineu Secietaiiat.

IETA has noteu similaily fiustiating policy uiscussions aiounu issues such as, B0E liability foi eiioneous
inclusion of CPAs in PoAs: B0E liability foi excess issuance: the incoipoiation of the concepts of
mateiiality anu level of assuiance: anu the uefinitions of 'fiist-of-its-kinu' anu 'common piactice'. IETA
believes that cleai guiuance is ciucial to the assuiance of uue piocess, pioceuuial faiiness, pieuictability
anu tianspaiency in the CBN, anu the CBN's slow, opaque anu inauequate uecision-making pioceuuies
will only incieasingly hampei the CBN's futuie uevelopment.
)
W,#"55,'16/&"'%)
)
Whethei the challenges the EB faces in coming to cleai guiuance stems fiom uisagieements among EB
membeis, oi uifficulties gatheiing the infoimation neeueu to make an infoimeu uecision on these policy
issues, IETA believes stiongly that the EB neeus ieviseu uecision-making pioceuuies to ueal with these
challenges. Foi this ieason, IETA suggests that the CNP iequest the following of the EB:

• -#R8#4&4 the Executive Boaiu to continue to enhance its policy-making iole by ueveloping anu
implementing new pioceuuies foi uecision-making, incluuing voting pioceuuies, to be
implementeu when consiueiing contentious policy issues.

• -#R8#4&4$the Executive Boaiu to ievise its inteinal pioceuuies to ensuie that uiscussions ielateu
to issues that aie not pioject-specific, anu peitain to policy issues with the possibility of
wiuespieau impact, aie helu in open session.

• -#R8#4&4 the Executive Boaiu, as its highest piioiity, to ievise anu claiify the tieatment of
national policies, incluuing but not limiteu to feeu-in taiiffs foi ienewable eneigy, with iespect to
the establishment of auuitionality anu the baseline scenaiio.

• -#R8#4&4 the Executive Boaiu to closely consult with all CBN stakeholueis when ievising anu
claiifying its guiuance on the tieatment of national policies, incluuing involving BNAs anu pioject
paiticipants in any woikshops oi extiaoiuinaiy meetings that may be oiganizeu.

• -#R8#4&4 the Executive Boaiu to ievise its "Pioceuuies foi eiioneous inclusion of a CPA" to limit
the liability of B0Es foi the wiongful inclusion of CPAs by iestiicting the ability to ieview
inuiviuual CPA inclusion to 2 yeais aftei initial inclusion.

• -#R8#4&4 the Executive Boaiu to finalize, as a high piioiity, the guiuelines on the uefinition of
eligibility ciiteiia foi CPA inclusion in a PoA: to cleaily uefine in those guiuelines the piecise
scope of sciutiny iequiieu by the B0Es when assessing auheience to eligibility ciiteiia: anu to
iequest the input of stakeholueis befoie appioval of these guiuelines.
)
!6&7$0,)/")&'#"03"06/,)%/6'1601&X6/&"')&'/")/4,)B2C8)&'#7$1&'()56/,0&67&/-)
)
*J376'6/&"')

Stanuaiuization within the CBN coulu, anu shoulu, come in many foims, incluuing the stanuaiuization of
impoitant teims like 'fiist-of-its-kinu' anu 'common piactice', the auuition of simplifieu moualities foi



IETA: The State of the CDM 2010

8
uemonstiating auuitionality, anu the integiation of methouology stanuaius such as stanuaiuizeu
baselines. The incoipoiation of the concepts of 'mateiiality' anu 'level of assuiance' woulu be anothei
foim of stanuaiuization, one which all majoi auuiting systems iecognize but which iemains absent fiom
the CBN. IETA has been commenting on the neeu to incoipoiate mateiiality anu othei types of
stanuaiuization into the CBN foi ovei foui yeais now, both to impiove the efficiency of the CBN as a
whole anu to make the CBN moie accessible to cuiiently unuei-iepiesenteu host countiies anu sectoi.
We maintain that gieatei levels of stanuaiuization woulu make foi a stiongei CBN in teims of efficiency,
enviionmental integiity, anu piivate sectoi inteiest.

Aftei two iequests fiom the CNP, the EB finally consiueieu a uiaft stanuaiu iegaiuing the use of the
concept of mateiiality in the CBN at EB S6. While IETA iecognizes that the uiscussion of this uiaft was a
huge step foiwaiu given the slow piogiess to uate, it was cleai fiom the uiscussion that took place among
EB membeis that the issue is fai fiom iesolveu. Seveial EB membeis, unfamiliai with auuiting
techniques, iemain unsuie about how the concept can be applieu within the CBN anu the implications it
will have foi valiuations, veiifications, anu Secietaiiat assessments. Confusion is unueistanuable. The
issue is veiy complex anu, at times, counteiintuitive, but we must move foiwaiu. The cuiient situation
has ieinfoiceu IETA's view that since mateiiality is a technical issue, it woulu best be auuiesseu by
technical expeits within the Secietaiiat as well as by ielevant Panels anu exteinal technical expeits, as
iequiieu. uiven agieement among these technical expeits, the EB shoulu pioviue only high-level
appioval.

As IETA has explaineu befoie, mateiiality anu level of assuiance aie alieauy applieu by B0Es touay in
many cases: it is simply impossible foi them to check all pieces of uata, especially uuiing veiification. In
oiuei to ensuie unifoim assessments, howevei, the valiuation anu veiification Nanual (vvN) shoulu
contain a common unueistanuing of when anu how the concept of mateiiality shoulu be applieu by B0Es.
The Secietaiiat's assessment of submissions shoulu then ieflect that unueistanuing. IETA believes that
the Secietaiiat anu the B0Es shoulu jointly uevelop the new iules anu piesent them to the EB foi high-
level appioval, iathei than appioaching the EB foi appioval eveiy step along the way. The
stanuaiuization of mateiiality anu level of assuiance in the CBN is alieauy long oveiuue.

Bespite IETA's fiustiation with the uelays on the incoipoiation of mateiiality, we iecognize that the EB
anu Secietaiiat have taken some steps towaiu stanuaiuization this yeai. Following a CNP S iequest, the
EB moveu with unchaiacteiistic swiftness to establish simplifieu moualities foi uemonstiating
auuitionality foi veiy small-scale ienewable eneigy anu eneigy efficiency pioject activities. IETA believes
that we shoulu not wait foi the benefits of these new pioceuuies to tiickle in, but iathei move quickly to
expanu the pioject types foi which simplifieu moualities aie maue available, builuing upon lessons
leaineu to uate.

The EB shoulu also move quickly to finalize a uecision on the valiuation anu EB appioval of giiu emission
factois foi geneial usage. The establishment of national anu iegional giiu-emission factois (uEF) is a key
step in the facilitation of CBN pioject activities in a host countiy as it stieamlines the piocess of baseline
anu auuitionality ueteimination anu ieuuces costs foi many piojects. The CBN still lacks cleai guiuelines
foi the valiuation anu geneial appioval of these giiu-emission factois, howevei, anu the EB now seems to
be in a ueaulock as to how to pioceeu. Cuiient pioceuuies still iequiie each B0E to ie-valiuate the uEF
unnecessaiily. This iequiiement auus unnecessaiy anu, at times, unbeaiable cost to pioject paiticipants,
yet some membeis of the EB aie unwilling to iecognize this as a pioblem anu even claim that B0Es
shoulu simply accept the uEF as calculateu by the BNA, even though this is cleaily not alloweu unuei
cuiient CBN iules.

Finally, IETA also believes that the EB shoulu move quickly to stanuaiuize the methouology uevelopment
piocess. CNP S askeu SBSTA to investigate the possibilities of ueveloping stanuaiuizeu baselines unuei
the CBN. As we have explaineu foi some time now, howevei, IETA believes that theie aie seveial viable
appioaches foi stanuaiuizing the piocess of ueteimining auuitionality anu baseline scenaiio, incluuing
ueemeu savings appioaches, foi example. IETA believes it woulu be appiopiiate to categoiize uiffeient
appioaches as methouology 'stanuaius' in oiuei to highlight the uiffeiences among new as well as



IETA: The State of the CDM 2010

9
existing appioaches. In this vein, the cuiient uistinctions of appioveu¡consoliuateu, small-scale, anu
micio-scale methouologies woulu all be consiueieu 'stanuaius' of methouology uevelopment.

IETA believes that thinking of appioaches to methouology uevelopment as stanuaius woulu pioviue a
useful fiamewoik foi fuithei stanuaiuizing the pioject uevelopment piocess unuei the CBN. Befining
anu appioving auuitional stanuaius, like stanuaiuizeu baselines, woulu expanu the ieach of the CBN anu
pioviue pioject pioponents anu BNAs moie flexibility to ueciue which methouology stanuaiu best suits
the piojects, technologies, oi sectois they want to woik in.

IETA believes that the CNP shoulu specifically authoiize the usage of stanuaiuizeu baselines as a fiist
step towaius ueveloping alteinative methouology stanuaius. We piopose that stanuaiuizeu baselines
incluue: (1) 6) M$67&+&,1) 1,%#0&3/&"') "+) /4,) I6%,7&',, such as, "Accoiuing to the stanuaiuizeu baseline
anu as accepteu by the EB anu host countiy BNA, the baseline foi eneigy use foi cooking within the
pioject bounuaiy is the use of unsustainably souiceu biomass," (2) #"'%,0?6/&?,7-)M$6'/&+&,1)I6%,7&',)
,5&%%&"'% associateu with the existing technology, such as, "Accoiuing to the stanuaiuizeu baseline anu
the stuuy appioveu by the EB anu the host countiy BNA, the baseline emissions amount to S tonnes of
C02 pei householu pei yeai," anu 6) 3"%&/&?,) 7&%/ of technologies¡pioject activities, appioveu by the
Executive Boaiu anu the host countiy BNA, which aie consiueieu auuitional, such as, "the supply of
biomass fiieu cooking stoves anu biomass biiquettes within the pioject bounuaiy is consiueieu
auuitional." Following this template woulu maintain a countiy-by-countiy appioach anu enviionmental
integiity while opening the CBN to new sectois anu new host countiies.

W,#"55,'16/&"'%)
)
IETA suggests that the CNP issue the following fuithei guiuance ielateu to these ciitical issues:
)
• -#R8#4&4 the Executive Boaiu to intiouuce the concepts of mateiiality anu level of assuiance into
all ielevant CBN piocesses, incluuing iegistiation, issuance anu ieview piocesses, anu to uiiect
the Secietaiiat to woik with B0Es to uevelop anu begin implementation of a woik piogiam foi
theii intiouuction by 1 Naich 2u11.

• -#R8#4&4$ the Executive Boaiu to uevelop a fiamewoik of methouology stanuaius incluuing new
anu existing appioaches, in oiuei to facilitate the uevelopment of alteinative appioaches to CBN
piojects anu to fuithei encouiage the uevelopment of CBN piojects in unuei-iepiesenteu host
countiies anu sectois.$
$
• -#R8#4&4 the Executive Boaiu, in conjunction with BNAs, to implement stanuaiuizeu baselines
that incoipoiate, as necessaiy, qualitative anu quantitative uesciiptions of pie-appioveu
baselines anu positive lists of technologies anu¡oi pioject types, in oiuei to simplify the CBN
piocesses anu encouiage the uevelopment of CBN piojects in unuei-iepiesenteu host countiies
anu sectois.

• -#R8#4&4$ the Executive Boaiu to finalize guiuance on the use of the fiist-of-its-kinu baiiiei anu
the assessment of common piactice, as its highest piioiity, anu '8&"(/5S#4 the Executive Boaiu to
utilize alteinative uecision-making pioceuuies, as appiopiiate, when iesponuing to this iequest.$
$
• -#R8#4&4 the Executive Boaiu to builu upon the expeiience gaineu in the establishment of
simplifieu moualities foi uemonstiating auuitionality foi veiy small-scale ienewable eneigy anu
eneigy efficiency pioject activities by ueveloping simplifieu moualities foi auuitional pioject
types, as appiopiiate.$
$
• -#R8#4&4 the Executive Boaiu to establish a pioceuuie that explains the exact scope iequiieu of
B0Es foi the satisfactoiy valiuatation of a BNA-calculateu oi BNA-appioveu national oi iegional
giiu emission factoi anu peimits all B0Es to iely upon a single B0E valiuation of a BNA-



IETA: The State of the CDM 2010

10
calculateu oi BNA-appioveu national oi iegional giiu emission factoi foi the valiuation of CBN
pioject activities within the ielevant host countiy.
$



IETA: The State of the CDM 2010

11
B"'#7$%&"')
)
As stateu in the opening, IETA's 16u+ membei companies believe that this uocument anu its annex of
iecommenueu G8/&"#/$=853'<6#$/#A'&5<=$&($&"#$*A#'<$+#?#A(.:#<&$,#6"'<54: shoulu seive as a guiue to
negotiatois as the Cancun talks begin. Bespite some positive changes this yeai, theie iemains a cleai
neeu foi iefoim on a numbei of levels, all of which will impiove the efficiency of the CBN now anu ovei
the long iun.

As the most active anu uiveise gioup of CBN stakeholueis in the woilu, IETA not only hopes that the
CNP will come togethei this yeai to enact meaningful CBN iefoim, we also uige the Paities to make a
stiong statement in Cancun about the CBN's futuie.

0n Iuly 2uth, the 0NFCCC publisheu a papei on "Legal consiueiations ielating to a possible gap between
the fiist anu subsequent commitment peiious. Note by the secietaiiat." This note iuentifies legal options
to pievent a gap between the fiist anu subsequent commitment peiious of the Kyoto Piotocol anu
iuentifies anu uesciibes the legal consequences anu implications of such a gap, if one shoulu occui.))

With iespect to the CBN, the note lays out two possible inteipietations of the ielevant piovisions of the
Kyoto Piotocol. The fiist envisions the continuation of the CBN uuiing any gap peiiou, given its
continueu contiibution to sustainable uevelopment anu the ultimate objective of the Convention. The
seconu suggests that the CBN woulu not be able to continue in the event of a gap without an explicit
uecision that it shoulu uo so by the Paities. While this is a technical papei intenueu to pioviue the Paities
with possi!"#$ %&'#()(#'*'%+&,$ +-$ '.#$ /(+'+0+"$ *&1$ '.#%($ %2)"%0*'%+&,$ *&1$ &+'$ *$ 1#-%&%'%3#$ *&,4#($ +&$ *&5$
!""#$%&!'&()"&)*+$),-&(),&./0"$1#$0.$"&2/+&3+/4$.'&,$5$*/36$0'&#0,$+&'($&789:& Inueeu, the unceitainty
that has stemmeu fiom the ielease of this papei has uealt !"#!$$%&%'"!(#)('*#&'#&+,#-./#!&#!#&%0,#*+,"#
!"#$%!& '%(")*$+%*,& +%& *-"& ./0*-!"#!! !"#$%&' ()*' )+#")&,' #"&-.$/0' $/1"*2%#' $/2"#"*23' 4#%5".2' %#$0$/)2$%/'
among many of the most active CBN pioject uevelopeis has come to a halt. The CBN Secietaiiat
continues to ieceive iequests foi iegistiation anu issuance foi piojects in laige numbeis only because
many piojects have been in the pipeline foi a long time, eithei in the eaily stages of uevelopment oi
awaiting valiuation.

In Copenhagen, the Paities maue it cleai that they suppoit the CBN anu the woik it is uoing to ieuuce
emissions, enhance sustainable uevelopment, anu uiffuse clean technology in the ueveloping woilu. The
Paities have the ability to pioviue theii inteipietation of gap implication foi the CBN in Cancun anu
theieby auuiess this issue. A simple uecision is neeueu to ieaffiim that the CBN will continue to function
iegaiuless of a gap in commitment peiious, anu IETA stiongly uiges the Paities to act in Cancun to
guaiantee the CBN's futuie by appioving that uecision.

)



IETA: The State of the CDM 2010

12
:'',J)E)
Recommenuations to the CNP iegaiuing
YFuithei guiuance ielating to the clean uevelopment mechanism"
))
The Inteinational Emissions Tiauing Association (IETA) iepiesents the most active Clean Bevelopment
Nechanism (CBN) stakeholueis in the woilu÷ incluuing pioject uevelopeis, auuitois, investois anu
compliance buyeis fiom 6 continents÷ anu has been woiking to suppoit anu impiove the CBN since its
inception. IETA woulu like to piesent the following suggestions to the Paities as they consiuei the
iequests anu uiiections they aie going to make to the CBN Executive Boaiu at CNP 6 in Cancun, Nexico.
)
)
!"#$*(<)#/#<6#$()$&"#$T'/&5#4$4#/?5<=$'4$&"#$:##&5<=$()$&"#$T'/&5#4$&($&"#$UB(&($T/(&(6(A,
-#6'AA5<=$the piovisions of Aiticles S anu 12 of the Kyoto Piotocol,
*(=<5S'<&$of uecisions 7¡CNP.1, 1¡CNP.2, 2¡CNP.S, 2¡CNP.4, anu 2¡CNP.S

.@ Z,',067)
)
1. -#R8#4&4 the Executive Boaiu, togethei with its suppoit stiuctuie, to uevelop anu implement a
stiategy to biing each of its pioceuuies into compliance with its establisheu timelines by 1 Apiil 2u11,
with a maximum 7-uay wait peiiou befoie beginning completeness check.

2. -#R8#4&4 the Executive Boaiu, fiom 1 Apiil 2u11, to iefunu the iegistiation fee of all piojects foi
which the timelines foi the piocessing of iequests of iegistiation anu issuance aie bieacheu by moie
than 4 weeks in total.

S. -#R8#4&4 the Executive Boaiu to ievise the iegistiation anu issuance pioceuuies to inuicate that
the official iegistiation uate is the uate at which the iequest foi iegistiation is submitteu to the
Secietaiiat.


4. -#R8#4&4 the Executive Boaiu to continue to enhance its policy-making iole by ueveloping anu
implementing new pioceuuies foi uecision-making, incluuing voting pioceuuies, to be implementeu
when consiueiing contentious policy issues.
)
..@ Z"?,0'6'#,)

S. -#R8#4&4$the Executive Boaiu to ievise its inteinal pioceuuies to ensuie that uiscussions ielateu
to issues that aie not pioject-specific, anu peitain to policy issues with the possibility of wiuespieau
impact, aie helu in open session.


wblle tbe £8 ooJ lts soppott sttoctote bove estobllsbeJ tlmelloes fot moov of tbe exlstloo ptoceJotes. tbev temolo
wlJelv oot of compllooce. locloJloo tbtooob oo oollmlteJ ´woltloo petloJ´ befote beloo ´scbeJoleJ´ fot completeoess
cbeck. A teooest fot teolsttotloo ot lssoooce sobmltteJ toJov woolJ llkelv foce o ooeoe of opptoxlmotelv J mootbs
befote lt teocbes tbe J0-Jov completeoess cbeck petloJ. ooJ tbe J0-Jov teooest fot teolsttotloo ot lssoooce petloJ.
Clveo tbese Jelovs. ooJ tbe blob cost tbev bove fot ptoject pottlclpoots lo tbe fotm of lost c£k teveooe. l£1A olso
belleves sttooolv tbot tbe teolsttotloo Jote. wblcb Jetetmloes ftom wbeo c£ks mov be lssoeJ. sboolJ be tbe Jote ot
wblcb tbe teooest fot teolsttotloo wos sobmltteJ to tbe 5ectetotlot.


Oo lssoes os votvloo os tbe Jefloltloo of ´lltst-of-lts-kloJ´ ooJ tbe tteotmeot of ootloool pollcles. tbe £xecotlve 8ootJ
bos beeo oooble to lssoe cleot. Jefloltlve oolJooce. lotoelv Joe to Jlsooteemeot omooo 8ootJ membets. l£1A belleves
tbot tbete most be some wov to move fotwotJ wltb Jeclsloo-mokloo oo ctltlcol lssoes wbeo Jlsooteemeots occot.




IETA: The State of the CDM 2010

13
6. -#R8#4&4 the Executive Boaiu to enhance communications with pioject paiticipants anu
stakeholueis, incluuing thiough the establishment of moualities anu pioceuuies foi uiiect
communication between the Executive Boaiu anu pioject paiticipants in ielation to inuiviuual piojects at
all stages of the pioject cycle, as iequesteu in paia 8 of FCCC¡KP¡CNP¡2uu9¡21¡Auu.1.

7. -#R8#4&4 the Executive Boaiu to uevelop anu implement, as soon as possible, a foimal pioceuuie
foi consiueiing unsoliciteu stakeholuei coiiesponuence, incluuing timelines anu an option to uiiect
letteis to specific panels, woiking gioups, oi teams in the Secietaiiat, in auuition to the Executive Boaiu.

8. -#R8#4&4$the Executive Boaiu to uevelop anu implement an email inteiface anu telephone hotline
foi CBN pioject paiticipants, B0Es, anu BNAs to ask simple claiification questions foi cleaily establisheu
puiposes.



)
)
)
...@ :##0,1&/6/&"')

9. -#R8#4&4$ the Executive Boaiu to establish an outsouiceu tiaining initiative foi B0Es that is
iesponsive to changes in the Accieuitation Stanuaiu anu Pioceuuie as well as CBN iules anu guiuance.

1u. -#R8#4&4 the Executive Boaiu to ensuie that the tiaining initiative noteu in paia 9 above pioviues
foi the paiticipation of pioject paiticipants on a voluntaiy basis.
)
)
)
)
)
)
)
.[@ =6%,7&',)6'1)C"'&/"0&'()C,/4"1"7"(&,%)6'1):11&/&"'67&/-))
)
11. -#R8#4&4 the Executive Boaiu to intiouuce the concepts of mateiiality anu level of assuiance into
all ielevant CBN piocesses, incluuing iegistiation, issuance anu ieview piocesses, anu to uiiect the
Secietaiiat to woik with the B0Es to uevelop anu begin implementation of a woik piogiam foi theii
intiouuction by 1 Naich 2u11.

12. -#R8#4&4 the Executive Boaiu to incluue tiaining on the piactical use of these concepts in
foithcoming tiaining initiative.

1S. -#R8#4&4$ the Executive Boaiu to finalize guiuance on the use of the fiist-of-its-kinu baiiiei anu
the assessment of common piactice, as its highest piioiity, anu '8&"(/5S#4 the Executive Boaiu to utilize
alteinative uecision-making pioceuuies, as appiopiiate, when iesponuing to this iequest.
As lt stooJs oow. ptoject pottlclpoots bove oo Jltect. effectlve cboooel of commoolcotloo to tbe £xecotlve 8ootJ. cuM
looels ooJ wotkloo Ctoops. ot tbe 5ectetotlot. wbetbet lt be fot slmple ooestloos. sobstootlve pollcv lssoes. ot tlme-
seosltlve Jlscossloo. 5loolflcoot tlme ls wosteJ wbeo o sbott emoll ot coovetsotloo coolJ bove oosweteJ o slmple
ooestloo, tbe 8ootJ ofteo seems to lock oppteclotloo of boslc motket coocetos, ooJ oosollclteJ lettets ote oosweteJ
sevetol mootbs oftet tbe £xecotlve 8ootJ bos Jeolt wltb tbe lssoe of cooceto.

l£1A welcomes tbe vvM wotksbops tbot bove beeo belJ tbls veot bot belleves tbot tbev ote stlll looJeooote to tbe tosk
of cootlooooslv eJocotloo uO£ beoJooottets ooJ ooo-ceottol sltes. Also. tbev wete oot opeo to ptoject pottlclpoots.
wbo olso oeeJ to ooJetstooJ cuM toles ooJ teooltemeots. cMl 5 teooesteJ tbe £xecotlve 8ootJ to oJopt meosotes to
locteose copocltv ooJ lmptove petfotmooce of uO£s. locloJloo svstems to ptomote lmptoveJ levels of ttololoo fot
ooJltots. wblcb l£1A belleves coo be setveJ tbtooob oo-ooloo ttololoo ptootoms JevelopeJ lo coojooctloo wltb tbe
5ectetotlot bot mooooeJ bv oo extetool compoov.

1be lottles ot cMl 4 ooJ cMl 5 teooesteJ tbe £xecotlve 8ootJ to ossess. os lts blobest ptlotltv. tbe oeeJ to
locotpotote tbe coocepts of motetlolltv ooJ level of ossotooce. 1bese coocepts ote commoo feototes of oll ooJltloo
ptootoms ooJ ote ctltlcol to oov ptoctlcol vollJotloo ooJ vetlflcotloo svstem. keceot Jlscossloos wltblo tbe £xecotlve
8ootJ sbow o cootlooeJ teloctooce to lottoJoce tbe coocepts. so l£1A belleves fltmet oolJooce ls oeeJeJ.



IETA: The State of the CDM 2010

14

14. -#R8#4&4 the Executive Boaiu to builu upon the expeiience gaineu in the establishment of
simplifieu moualities foi uemonstiating auuitionality foi veiy small-scale ienewable eneigy anu eneigy
efficiency pioject activities by ueveloping simplifieu moualities foi auuitional pioject types, as
appiopiiate.
$
1S. -#R8#4&4$ the Executive Boaiu to uevelop a fiamewoik of methouology stanuaius, incluuing new
anu existing appioaches, in oiuei to facilitate the uevelopment of alteinative appioaches to CBN piojects
anu to fuithei encouiage the uevelopment of CBN piojects in unuei-iepiesenteu host countiies anu
sectois.
$
$
$
$





16. -#R8#4&4 the Executive Boaiu, in conjunction with BNAs, to implement stanuaiuizeu baselines that
incoipoiate, as necessaiy, qualitative anu quantitative uesciiptions of pie-appioveu baselines anu
positive lists of technologies anu¡oi pioject types, in oiuei to simplify CBN piocesses anu encouiage the
uevelopment of CBN piojects in unuei-iepiesenteu host countiies anu sectois.

17. -#R8#4&4 the Executive Boaiu to establish a pioceuuie that explains the exact scope iequiieu of B0Es foi
the satisfactoiy valiuation of a BNA-calculateu oi BNA-appioveu national oi iegional giiu emission factoi
anu peimits all B0Es to iely upon a single B0E valiuation of a BNA-calculateu oi BNA-appioveu national
oi iegional giiu emission factoi foi the valiuation of CBN pioject activities within the ielevant host
countiy.


cMl 5 teooesteJ tbe £xecotlve 8ootJ to wotk. beolooloo ot lts oext meetloo. oo tbe Jevelopmeot of oolJooce oo tbe
ose of fltst-of-lts-kloJ bottlet ooJ tbe ossessmeot of commoo ptoctlce. Almost o veot posseJ befote tbe 8ootJ belJ
sobstootlve Jlscossloo oo tbe lssoe ot £8 56. bowevet. ooJ ooteemeot omooo 8ootJ membets temolos eloslve.

l£1A sttooolv welcomes tbe Jevelopmeot of slmpllfleJ moJolltles fot Jemoosttotloo oJJltlooolltv fot vetv smoll-scole
teoewoble eoetov ooJ eoetov efflcleocv ptoject octlvltles ooJ belleves tbot tbe exteosloo of tbe ose of posltlve llsts to
otbet ptoject octlvltles woolJ oteotlv stteomlloe tbe ptoject Jevelopmeot ptocess. wblle molotololoo eovltoomeotol
loteotltv. l£1A soooests tbot tbe £xecotlve 8ootJ cooslJet metbooe obotemeot ptoject octlvltles lo looJfllls. mooote
mooooemeot. blomoss woste mooooemeot. ooJ loJosttlol wostewotet os lt expooJs tbls wotk.
1be estobllsbmeot of ootloool ooJ teoloool otlJ-emlssloo foctots (C£l) ls o kev step lo tbe focllltotloo of cuM ptoject
octlvltles lo o bost cooottv os lt stteomlloes tbe ptocess of boselloe ooJ oJJltlooolltv Jetetmlootloo ooJ teJoces costs
fot moov ptojects. 1be cuM stlll locks cleot oolJelloes fot tbe vollJotloo ooJ oeoetol opptovol of tbese otlJ-emlssloo
foctots. bowevet. cotteot ptoceJotes stlll teoolte eocb uO£ to te-vollJote tbe C£l oooecessotllv. 1bls teooltemeot oJJs
oooecessotv ooJ. ot tlmes. oobeotoble cost to ptoject pottlclpoots. vet tbe £xecotlve 8ootJ seems to be JeoJlockeJ lo
lts Jlscossloos oo tbe lssoe ooJ teooltes cMl oolJooce.
l£1A belleves tbot o stooJotJlzeJ boselloe wblcb ocbleves tbe objectlves llsteJ lo tbe obove teooest ls comptlseJ of J
elemeots. (1) !"#$!%&'&()")(*+,&-.&/0"/'".1("2!*(%&0(. socb os ´AccotJloo to tbe stooJotJlzeJ boselloe ooJ os occepteJ
bv tbe £8 ooJ bost cooottv uNA. tbe boselloe fot eoetov ose fot cookloo wltblo tbe ptoject boooJotv ls tbe ose of
oosostolooblv sootceJ blomoss.´ (2) +/0*(,3!.&3(%4" #$!0.&'&()" 2!*(%&0(" (5&**&/0* ossocloteJ wltb tbe exlstloo
tecbooloov. socb os. ´AccotJloo to tbe stooJotJlzeJ boselloe ooJ tbe stoJv opptoveJ bv tbe £8 ooJ tbe bost cooottv
uNA. tbe boselloe emlssloos omooot to J toooes of cO2 pet boosebolJ pet veot.´ ooJ !"-/*&.&3("%&*. of tecboolooles /
ptoject octlvltles. opptoveJ bv tbe £xecotlve 8ootJ ooJ tbe bost cooottv uNA. wblcb ote cooslJeteJ oJJltloool. socb os.
´tbe sopplv of blomoss flteJ cookloo stoves ooJ blomoss btlooettes wltblo tbe ptoject boooJotv ls cooslJeteJ
oJJltloool.´

5tooJotJlzeJ boselloes. os commoolv JlscosseJ. coostltote oolv ooe metboJ fot stooJotJlzloo tbe cuM ptoject
Jevelopmeot ptocess. l£1A belleves tbot tbete ote sevetol otbet eooollv vloble metboJs. locloJloo bot oot llmlteJ to tbe
ose of moJeleJ boselloes ooJ JeemeJ sovloos opptoocbes. l£1A vlews oll of tbese os metboJoloov ´stooJotJs´. wblcb
coo be oJJeJ to tbe exlstloo opptoveJ/coosollJoteJ. smoll-scole. ooJ mlcto-scole ´stooJotJs´ fot metboJoloolcol
Jevelopmeot. l£1A belleves tbot tblokloo of opptoocbes to metboJoloov Jevelopmeot os stooJotJs lo tbls wov woolJ
ptovlJe o osefol ftomewotk fot fottbet stooJotJlzloo tbe cuM. uefloloo ooJ opptovloo oJJltloool stooJotJs woolJ
expooJ tbe teocb of tbe cuM ooJ ptovlJe ptoject ptopooeots ooJ uNAs mote flexlbllltv to JeclJe wblcb metboJoloov
stooJotJ best solts tbe ptojects. tecboolooles. ot sectots tbev woot to wotk lo.





IETA: The State of the CDM 2010

15

[@ W,(&%/06/&"')6'1).%%$6'#,)
)
18. -#R8#4&4 the Executive Boaiu, as its highest piioiity, to ievise anu claiify the tieatment of
national policies, incluuing but not limiteu to feeu-in taiiffs foi ienewable eneigy, with iespect to the
establishment of auuitionality anu the baseline scenaiio.

19. -#R8#4&4 the Executive Boaiu to closely consult with all CBN stakeholueis when ievising anu
claiifying its guiuance on the tieatment of national policies, incluuing involving BNAs anu pioject
paiticipants in any woikshops oi extiaoiuinaiy meetings that may be oiganizeu.

2u. -#R8#4&4 the Executive Boaiu to ievise its "Pioceuuies foi eiioneous inclusion of a CPA" to limit
the liability of B0Es foi the wiongful inclusion of CPAs by iestiicting the ability to ieview inuiviuual CPA
inclusion to 2 yeais aftei initial inclusion.

21. -#R8#4&4 the Executive Boaiu to finalize, as a high piioiity, the guiuelines on the uefinition of
eligibility ciiteiia foi CPA inclusion in a PoA, anu to iequest the input of stakeholueis befoie appioval.

22. With iespect to the "Pioceuuie iegaiuing the coiiection of significant ueficiencies anu the excess
issuance of CERs":

a. *A'/5)5#4 that the teim "significant ueficiency" shoulu be uefineu in iefeience to, anu that
these pioceuuies shoulu be implementeu in conjunction with, the foithcoming "Stanuaiu
on the use of the concept of mateiiality":

b. +#653#4 that the ieview cost must be boine by the B0E unuei ieview only when
ueficiencies aie founu:

c. +#653#4 to cap the maximum costs possible to be boine by the B0E anu iequests the
Executive Boaiu to uevelop anu piovisionally apply such as cap, following consultation
with B0Es anu othei ielevant stakeholueis:

u. C8&"(/5S#4 the Executive Boaiu to choose an expeit ieviewei oi anothei B0E to
unueitake the iequiieu ieview:




















2S. G8/&"#/$/#R8#4&4 the Executive Boaiu to uevelop anu piovisionally implement an alteinative
1be lock of cleot oolJooce oo tbe tteotmeot of ootloool pollcles bos boJ ooJ wlll cootlooe to bove setloos oeootlve
lmpocts oo teoewoble eoetov ptoject Jevelopmeot lo cooottles wbete teoewoble eoetov ls most oeeJeJ lo otJet to
oJJtess cllmote cboooe.
wblle l£1A oppteclotes tbe effotts moJe to focllltote tbe lmplemeototloo of loAs tbls veot. tbe tevlsloos moJe wltb
tespect to tbe llobllltv of uO£s fot wtooofol loclosloo of clAs lo o loA ote eotltelv looJeooote. os tbe llobllltv ls stlll oot
llmlteJ. 1be 8ootJ bos olso oot vet ptovlJeJ oJeooote oolJelloes fot tbe estobllsbmeot of ellolbllltv ctltetlo fot clA
loclosloo lo o loA. wblcb ls ooe kev foctot lo llmltloo uO£ llobllltv ooJ eosotloo tbe eovltoomeotol loteotltv of loAs.
l£1A belleves sttooolv tbot tbe cotteot Jtoft ´ltoceJote teootJloo tbe cottectloo of sloolflcoot Jeflcleocles ooJ tbe
excess lssoooce of c£ks´ woolJ be exttemelv Jettlmeotol to tbe motket. os lt ploces oo oopteJlctoble. oollmlteJ. ooJ
llkelv oolosotoble omooot of tlsk oo uO£s fot excess lssoooce. l£1A belleves tbot tbe £xecotlve 8ootJ woolJ beoeflt
ftom fottbet oolJooce oo ooJefloeJ tetms lo cotteot cMl Jeclsloos. we olso belleve tbot some cMl Jeclsloos oeeJ to
be omeoJeJ ftom otlolool fotm. os tbelt cooseooeoces ote oow mote follv ooJetstooJ.




IETA: The State of the CDM 2010

16
mechanism, such as an insuiance account of cieuits manageu by the Secietaiiat anu populateu thiough
the auuition of a levy applieu to CER issuance, to ensuie the enviionmental integiity in cases wheie:

a. Excess issuance occuiieu uue to ieasons othei than the negligence of the B0E, in cases
wheie the pioject paiticipant can not be founu anu¡oi helu liable:

b. Excess issuance occuiieu uue to B0E negligence but the B0E foifeits accieuitation status
iathei than acquiie anu cancel an equivalent amount of CERs:

c. Excess issuance occuiieu uue to B0E negligence ovei anu above the cap placeu on the
liability of the B0E.









24. *A'/5)5#4 that the goal of the ieviseu iegistiation, issuance, anu ieview pioceuuies shoulu be to
inciease the efficiency, pieuictability, anu pioceuuial uue piocess of the CBN.

2S. G8/&"#/$ 6A'/5)5#4 that 'alteinative timelines' shoulu iesult in shoitei, moie efficient iegistiation,
issuance anu ieview piocesses.

26. -#R8#4&4 the Executive Boaiu to ievise its pioceuuies foi iegistiation anu issuance to pioviue foi
minoi issues in completeness checks to be uealt with thiough uiiect telephone anu¡oi email
communication between the Secietaiiat anu B0E¡Pioject paiticipant anu not iesult in the
iecommencement of the completeness check piocess, incluuing 'waiting time'.

27. *A'/5)5#4 that the iequest in FCCC¡KP¡CNP¡2uu9¡21¡Auu.1 paia S9(a) to pioviue the B0E anu
pioject paiticipant with 'auequate' oppoitunity to iesponu to issues iaiseu with a iequest foi ieview, in
auuition to ensuiing auequate time foi the iesponse to be submitteu, also iefeis to the ability to
unueistanu what constitutes an appiopiiate anu complete iesponse, to the feasibility of the pioject
paiticipants anu B0E answeiing the questions iaiseu, anu to the appiopiiateness of the scope of the
questions iaiseu, given existing CBN iules anu iequiiements.

28. -#R8#4&4 the Executive Boaiu to establish a pioceuuie foi initial calls to be set up by the
Secietaiiat with the pioject paiticipants anu B0Es in oiuei to uiscuss the ieasons foi ieview befoie the
ieview is ueciueu, in oiuei to eliminate issues that can be easily iesolveu without ieview as well as
ensuie common unueistanuing of the issues iequiiing claiification if a ieview is ueemeu necessaiy.

29. -#R8#4&4 the Executive Boaiu to conuuct a thoiough analysis of the impact of the ieviseu
iegistiation, issuance anu ieview pioceuuies 6 anu 12 months aftei the uate of theii implementation anu
make this analysis available to the public anu the CNP, in oiuei to enable the consiueiation of theii
effectiveness against the above ciiteiia.

l£1A welcomes tbe ottempts bv tbe £xecotlve 8ootJ ooJ tbe 5ectetotlot to lmptove tbe efflcleocv ooJ teJoce tbe
tlmelloes of cuM ptoceJotes bot oofottoootelv bos oot wltoesseJ oo oJeooote Jecteose lo tlmelloes fot ptojects
teooestloo teolsttotloo ooJ lssoooce ooJ sees o cootlooeJ lock of clotltv oo teooest fot tevlew ooestloos. 1be oew
ptoceJote of klckloo sobmlssloos foooJ to be ´locomplete´ to tbe bock of tbe ooeoe ls tesoltloo lo oo oJJltloool J
mootb woltloo petloJ fot moov ptojects. eveo fot mloot lssoes tbot coolJ be tesolveJ lo o mottet of mlootes. lo oJJltloo
to tbe tlme ooJ effott of ptoject pottlclpoots ooJ uO£s. tbls ptocess fottbet botJeos tbe 5ectetotlot. wbo most cbeck
tbe eotlte sobmlssloo ovet ooolo. l£1A belleves tbot moov of tbese lssoes ooJ tbe coofosloo oboot tevlew ooestloos coo
be solveJ tbtooob ose of Jltect telepbooe ooJ emoll commoolcotloo betweeo membets of tbe 5ectetotlot ooJ tbe
ptoject pottlclpoots ooJ uO£s.

l£1A belleves tbot oo oltetootlve mecboolsm ls oecessotv to oJeoootelv losote tbe eovltoomeotol loteotltv of tbe cuM
wblle olso eosotloo tbot o mooooeoble level of tlsk ls ploceJ oo tbe uO£s. lottbet. tbe levv tefetteJ to lo poto 2J obove
sboolJ be estobllsbeJ tbtooob coosoltotloo wltb stokebolJets ooJ wltb tbe olJ of oo ooolvsls ooJ tecommeoJotloo bv
oo loJepeoJeot expett. l£1A belleves lt woolJ olso be opptoptlote to cooJoct petloJlc ooolvsls of tbe tlsks of ovet-
lssoooce ooJ tbe oeeJs of tbe losotooce occooot lo otJet to Jetetmloe lf o petceotooe of tbe c£ks belJ lo tbe losotooce
occooot coolJ be teleoseJ to ptovlJe oJJltloool teveooe to tbe AJoptotloo looJ.





IETA: The State of the CDM 2010

17

Su. -#R8#4&4 the Executive Boaiu to extenu the iight of appeal unuei the inuepenuent appellate bouy
to B0Es iegaiuing uecisions taken unuei the "Pioceuuies foi iegaiuing the coiiection of significant
ueficiencies anu the excess issuance of CERs" anu Accieuitation Stanuaiu.


[.@ W,(&"'67)6'1)>$I0,(&"'67)2&%/0&I$/&"')6'1)B636#&/-U=$&71&'()
)
S1. -#R8#4&4 the Executive Boaiu anu its suppoit stiuctuie to acceleiate the woik of ueveloping top-
uown methouologies by ueuicating significant auuitional iesouices to this woik anu ueveloping a woik
plan foi 2u11 that incluues a goal of ueveloping 1u new top-uown methouologies.

S2. -#R8#4&4 the Executive Boaiu anu its suppoit stiuctuie to acceleiate the woik of ievising anu
simplifying methouologies, incluuing the auuition of the option to apply conseivative uefault factois.

SS. -#R8#4&4 the Executive Boaiu to continue to closely consult with pioject paiticipants, othei CBN
stakeholueis, anu inuepenuent expeits as they unueitake this woik on new anu ieviseu methouologies.

S4. -#R8#4&4$ the Executive Boaiu to holu iegional woikshops to pioviue assistance to BNAs, as
neeueu, iegaiuing the use of EBS4, Annex 1S to piomote piojects in theii countiies.


SS. -#R8#4&4 the Executive Boaiu to uevelop a piogiam to pioviue assistance to BNAs, as neeueu, to
calculate national anu¡oi iegional giiu factois.


S6. @<6(8/'=#4 the Executive Boaiu to acceleiate ongoing woik to ievise existing methouologies to
pioviue foi scenaiios wheie futuie anthiopogenic emissions by souices aie piojecteu to iise above
cuiient levels uue to specific ciicumstances of the host Paity, using exteinal expeits wheie necessaiy to
facilitate the woik in this iegaiu.


)
)
l£1A oppteclotes tbot tbe 5moll-scole wotkloo Ctoop ls mokloo ptootess oo tbls lssoe bv ockoowleJoloo o fotote
sceootlo of blobet emlssloos os o teollstlc boselloe lo some cltcomstooces ooJ JeclJloo to opplv o metboJoloov-speclflc
opptoocb. l£1A belleves tbot tbls wotk ls osefol ooJ sboolJ be cootlooeJ ot oo occeletoteJ poce lo otJet to see tbe
moxlmom beoeflts lo cotteotlv ooJet-tepteseoteJ bost cooottles.

ueclsloos tokeo ooJet tbe excess lssoooce ptoceJote ooJ ooJet tbe AccteJltotloo 5tooJotJ (l.e Jeclsloo to sospeoJ ot
wltbJtow tbe occteJltotloo of o uO£) bove sloolflcoot ooJ looo-tetm cooseooeoces fot uO£s. botb mooetotllv ooJ ftom
o tepototloool stooJpolot. As socb. uO£s sboolJ be offotJeJ tbe tlobt to oppeol o Jeclsloo of tbe £xecotlve 8ootJ
slmllot to tbe oew oppeol ptoceJotes fot teooests fot teolsttotloo ooJ lssoooce.
l£1A commeoJs tbe wotk tbot bos beeo Jooe oo tbe Jevelopmeot of top-Jowo metboJolooles ooJ loclosloo of Jefoolt
foctots so fot. bot belleves tbot tbe wotk most be sloolflcootlv locteoseJ ooJ eobooceJ lf we ote to see tesolts lo tetms
of o ootlceoble locteose lo tbe oombet of ptoject octlvltles lo cotteotlv ooJet-tepteseoteJ bost cooottles ooJ sectots.
l£1A bos become owote tbot moov uNAs ote eltbet oot owote of tbe oew slmpllfleJ moJolltles fot vetv-smoll scole
teoewoble eoetov ooJ eoetov efflcleocv ptojects ot else Jo oot bove tbe tesootces to effectlvelv ptomote tbelt ose.
uNAs ooJ ptoject pottlclpoots fteooeotlv exptess oo loobllltv. wbetbet fot tecbolcol ot floooclol teosoos. to colcolote
tbelt ootloool ooJ/ot teoloool otlJ emlssloo foctots. wblcb ls o kev step lo tbe focllltotloo of cuM ptoject octlvltles lo o
bost cooottv. ltovlJloo osslstooce wltb tbls tosk woolJ oo o looo wov to focllltotloo tbe Jevelopmeot of ptojects lo
cotteotlv ooJet-tepteseoteJ bost cooottles.



IETA: The State of the CDM 2010

18
[..@ W,%"$0#,%)+"0)/4,)\"0<)"+)/4,)B2C)
S7. -#R8#4&4 the Executive Boaiu to apply significant auuitional time anu iesouices to ueveloping
stiategies to impiove the efficiency of the CBN piocess, incluuing hiiing exteinal expeits anu ueuicating
auuitional time foi Executive Boaiu uiscussion of efficiency befoie 1 Apiil 2u11, in oiuei to alleviate
futuie piessuies on the Secietaiiat ieciuitment piocess.

S8. -#R8#4&4 the Executive Boaiu to consiuei outsouicing the entiie completeness check piocess to
outsiue consultants in oiuei to ieuuce the piessuies on the Secietaiiat.

)

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