the clean development mechanism (cdm): transportation sector opportunities john drexhage director,...
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The Clean Development Mechanism (CDM): The Clean Development Mechanism (CDM): Transportation Sector OpportunitiesTransportation Sector Opportunities
John DrexhageJohn DrexhageDirector, Climate Change and Energy
International Institute for Sustainable Development January 15, 2003
In partnership with the Center for Clean Air PolicyCenter for Clean Air Policy
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Introduction to the CDMIntroduction to the CDM
One of 3 flexibility mechanisms of the Kyoto Protocol
Current status of CDM :– Trades can happen now (after 2000)– Marrakech Accords set rules for verification,
certification, baselines* Incentives for participation: Certified Emission
Credits (CERs)
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Introduction to the CDMIntroduction to the CDM
Project Cycle:1. Preparation of the project design document (PDD)
Key Aspects: baseline, project emission reduction estimates, monitoring plan
2. Approval by designated national authorities 3. Validation 4. Registration 5. Monitoring and Verification 6. Certification and Issuance of CERs
(*CERs are calculated based on the difference between project and
baseline emissions)
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Introduction to the CDMIntroduction to the CDM
Baseline: Is the scenario that reasonably represents GHG
emissions by sources that would occur in the absence of the proposed project activity. It includes all BAU activities and are calculated based on 1 of 3 approaches
Additionality: A CDM project is additional if anthropogenic emissions
of GHGs by sources are reduced below those that would have occurred in the absence of the registered project activity
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The CDM and TransportationThe CDM and Transportation
Potential Projects:
Technology & Travel Demand/Behavioral Change No explicit rule preventing new government policies (e.g., tax credits,
subsidies) from qualifying as CDM projects. Be careful of strong policy “on paper” with limited implementation potential
Fixed technologies (e.g., hybrid buses) or infrastructure (e.g., metro expansion, segregated busways, land use, pedestrian or bicycle) may be higher “carbon” quality than policies and incentives that could change over time
Scale of Project Practicality of aggregating many small emitters
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The CDM and TransportationThe CDM and Transportation
Implementation issues Costs
– No transportation project is done for GHG reductions alone…without accounting for full project benefits incremental costs may appear high
– Incremental Costs and Full Benefits Assessment How to allocate costs across project benefits? (GHG, air
quality, economic development, etc.)
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The CDM and TransportationThe CDM and Transportation
Continued… Project Timeframe
– For how long should the baseline be valid?– CDM offers a choice between 7 yr crediting period with
potential for renewal, OR, 10 yr period without renewal Project Boundaries
– Which gases? (e.g. CO2, N2O, CH4, CFCs)– Lifecycle versus direct emissions? (e.g. methane leaks
upstream, biofuel carbon sequestration upstream)– Leakage?
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The CDM and TransportationThe CDM and Transportation
Monitoring Technology projects:
– Track fuel sales/use, OR Calculate fuel use from VMT & efficiency
Travel demand/behavioral policies: – Track VMT, mode split
Frequency & geographic scope of data collection may be limited
– Is it appropriate to use modeling results for current or projected data?
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The CDM and TransportationThe CDM and Transportation
Developing Quantification Methodologies:
Baseline & Additionality Issues Technology projects
– Set baseline as current technology – Set baseline as marginal, if different
For travel demand/behavioral policies– Compare to current mode split and VMT– Compare to projected mode split and VMT
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Investor Issues Unilateral CDM Demand Side Measures
– What would investors fund? • Incentives for transit-oriented development?
Potential roles for Official Development Assistance?
Capacity building Project scoping and pre-feasibility
The CDM and TransportationThe CDM and Transportation
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CDM/Transportation Project ExamplesCDM/Transportation Project Examples
Of the 80 projects currently in the CDM pipeline only 5 are transportation…of those, none address travel demand
Projects:1) Natural Gas Conversion Project, Bangladesh Convert 17,000 gasoline vehicles gasoline to CNG 0.13 MTCO2e (10 years) Sponsor: Asian Development Bank’s (ADB) ALGAS program2) Dhaka City Electric Vehicle Project, Bangladesh 3,000 electric vehicles in Dhaka City 0.010 -0.014 MTCO2e (10 years) Sponsor: Bangladesh Center for Advanced Studies under the
South South North project
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CDM/Transportation Project ExamplesCDM/Transportation Project Examples
Continued…3) Yogyakarta Urban Bus Project, Indonesia Retrofitting of 200 buses with cleaner engines 0.021 MTCO2e (10 years) Sponsor: the South South North project
4) Ethanol fuel project, Brazil $43 million over 10 years to fund the production of 100,000 non-
polluting ethanol-fueled vehicles Sponsor: via agreement between Germany and Brazil5) Gasohol project, India• Use of gasoline mixed with Gasohol produced from ethanol that is
produced through biotechnology from sugar cane processing waste• Sponsor: Japanese Ministry for Environment
Source: CDM Watch
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Project Partners: IISD, CCAP, CC&D, CGTS, CIDA Explore the potential to reduce GHGs and promote
transportation CDM projects in Chile Use of ODA for capacity building and project scoping Prepare pre-feasibility studies on technology and travel
demand reduction projects Advance local government sustainability agenda Attract foreign investment in sustainable development Potential for replication: help establish precedent for
assessing transportation CDM projects
CDM and Transportation in ChileCDM and Transportation in Chile
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Potential Pre-Feasibility Studies
Technical – e.g. electric trolleys,
improved vehicle fuel efficiency
Travel Demand– e.g. increase bus
ridership, transit-oriented development
CDM & Transportation: ChileCDM & Transportation: Chile
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OutlookOutlook
Issues for further consideration Technology and fuel related projects are going
to be first out of the block…but given the rapid growth in VMT in developing countries it will be vital to address travel demand reduction– The Chile project and the GEF project are two
initiatives providing leadership in this area
Overall impact of the CDM will depend in large part on the value of the CERs
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FOR MORE INFORMATION...
John DrexhageJohn Drexhage Director, Climate Change and Energy, IISD
Tel: +1 (613) 238-9821
Ned HelmeNed Helme Executive Director, CCAP
Tel: +1 (202) 408-9260
Eduardo SanhuezaEduardo Sanhueza Director , CC&D
Tel: +56 (2) 209-1770
Email: [email protected]
Made possible with support from:
Canadian International Development Agency (CIDA)Canadian International Development Agency (CIDA)