CDM and SSN:CDM and SSN:A winning combinationA winning combination

SSN and CDMSSN and CDMCreating partnerships between Creating partnerships between SouthSouth, , SouthSouth and and NorthNorth countries countries through the opportunity of the through the opportunity of the Clean Development Mechanism to Clean Development Mechanism to combat adverse climate change, combat adverse climate change, and to promote Sustainable and to promote Sustainable Development, best practice, and Development, best practice, and capacity enhancement in the capacity enhancement in the developing world.developing world.

The SouthSouthNorth projectThe SouthSouthNorth project

The SouthSouthNorth Project is a capacity The SouthSouthNorth Project is a capacity building initiative helping four southern building initiative helping four southern countries to learn from the experience of countries to learn from the experience of developing CDM projectsdeveloping CDM projects

We operate in Brazil, South Africa, We operate in Brazil, South Africa, Indonesia, and BangladeshIndonesia, and Bangladesh

An SSN introductionAn SSN introduction

In this presentation we will highlight some In this presentation we will highlight some fundamental points regarding,fundamental points regarding,

the Clean Development Mechanismthe Clean Development Mechanism

and illustrate what SSN seeks to achieveand illustrate what SSN seeks to achieve

TRADE with the SOUTH :TRADE with the SOUTH :THE CDMTHE CDM

The CDM, or Clean Development The CDM, or Clean Development Mechanism, is a unique trade instrumentMechanism, is a unique trade instrument

Through it, SOUTH countries (without Through it, SOUTH countries (without targets) can elect to assist NORTH targets) can elect to assist NORTH countries (with targets) to achieve their countries (with targets) to achieve their target at a lower costtarget at a lower cost

How is this done?How is this done?

A CDM project:A CDM project:

Emitter in NORTH Emitter in SOUTH

Target level ofemissions

Achieved level of emissions

COST $

COST $

Investment funds

EmissionReduction

credits

Countries and emittersCountries and emitters

A CDM Project A CDM Project activity can either be activity can either be a contract between a contract between countries or emitters countries or emitters themselves:themselves:

Holland

Local LandfillProject

Philips

Costa Rica

In summary…In summary…

The SOUTH project developer receives The SOUTH project developer receives investment from the NORTH investment from the NORTH investor/purchaserinvestor/purchaser

And in return assists the NORTH And in return assists the NORTH investor/purchaser to reach its target at a investor/purchaser to reach its target at a lower costlower cost

This is TRADE: there must be a difference This is TRADE: there must be a difference between the cost to the investor and the between the cost to the investor and the price to the developerprice to the developer

The project activity…The project activity…

Must reduce GHG’s against a validated Must reduce GHG’s against a validated baselinebaseline

This baseline represents what the This baseline represents what the emissions would have been without the emissions would have been without the CDM project taking placeCDM project taking place

Each ton CO2 equivalent reduced in this Each ton CO2 equivalent reduced in this way becomes a CERTIFIED REDUCTION way becomes a CERTIFIED REDUCTION CERTIFICATE, which is tradableCERTIFICATE, which is tradable

And…And…

The NORTH emitter wins by achieving a The NORTH emitter wins by achieving a portion (no more than 50%) of its target at portion (no more than 50%) of its target at a lower costa lower cost

The SOUTH emitter wins by receiving The SOUTH emitter wins by receiving investment funds to improve technology investment funds to improve technology and performanceand performance

The world wins through a reduction of The world wins through a reduction of GHG’sGHG’s

And…And…

The host country…The host country…

It is a requirement of the Kyoto Protocol It is a requirement of the Kyoto Protocol that the host country must first satisfy itself that the host country must first satisfy itself that any CDM project will contribute to its that any CDM project will contribute to its SUSTAINABLE DEVELOPMENTSUSTAINABLE DEVELOPMENT

So the host country wins in this waySo the host country wins in this wayWell, that, at least, is the idea…Well, that, at least, is the idea…But a lot has gone wrongBut a lot has gone wrong

SD: the challengeSD: the challenge

Setting SD rules is complexSetting SD rules is complexMany developers want deal flow without Many developers want deal flow without

restrictions: a race to the bottom?restrictions: a race to the bottom?Some CDM projects will result in job Some CDM projects will result in job

losseslossesGovernment may be stuck in the middleGovernment may be stuck in the middleShould there be thresholds?Should there be thresholds?And anyway, with the US out, is there a And anyway, with the US out, is there a

carbon market?carbon market?

CDM projects: the cycleCDM projects: the cycle

The CDM project is a component of a The CDM project is a component of a development projectdevelopment project

It is based on a PROJECT DESIGN It is based on a PROJECT DESIGN DOCUMENT (PDD)DOCUMENT (PDD)

The PDD is a prediction of the “carbon The PDD is a prediction of the “carbon offset” which the CDM component will offset” which the CDM component will achieveachieve

This prediction is then validated, This prediction is then validated, approved, registered and transactedapproved, registered and transacted

The Project Cycle illustratedThe Project Cycle illustrated

Owner and Stakeholder

Groups

Project Design Approval by

DNA

Validation by OE

Registration by Exec Board

MonitoringVerification and Issuance

Implementation

CDM milestonesCDM milestones

Owner and Stakeholder

Groups

Project Design

Approval by DNA

Validation by OE

Registration by Exec Board

Monitoring Verification and Issuance

DNA : approves project for Sustainable Development OE = Operational Entity eg: accredited auditor

Validates project design

Exec Board = of the CDM

Registers Project

By the OE

Issues CER’s

CDM Administrative Bodies

So what can the CDM achieve?So what can the CDM achieve?

The South can help the North meet its The South can help the North meet its targetstargets

In return the South can promote its path In return the South can promote its path towards sustainable developmenttowards sustainable development

The South can choose its projects, the The South can choose its projects, the timing, the investors, and so forthtiming, the investors, and so forth

So…the CDM could achieve a great deal So…the CDM could achieve a great deal

The SSN ProjectThe SSN Project

Our organisation, our workOur organisation, our work

We are about…We are about…

Viable, commercial, Viable, commercial, and transactable and transactable CDM projectsCDM projects

People focused People focused sustainable sustainable developmentdevelopment

Capacity Capacity development and development and learninglearning

We are first a SOUTH We are first a SOUTH organisation…organisation…

South Africa Office

Central Office

Brazil Office IndonesiaOffice

BangladeshOffice

We are monitored by HELIO INTERNATIONAL

Our principal funderis the Government

of the Netherlands

Our structure…Our structure…

Object 1: assist project owners to Object 1: assist project owners to develop CDM projectsdevelop CDM projects

BRAZILBRAZIL SOUTH SOUTH AFRICAAFRICA

INDONESIAINDONESIA BANGLADESHBANGLADESH

Thermo Power Plant Thermo Power Plant Energy Production Energy Production through the using of waste through the using of waste gas (bio- gas) and bio-gas (bio- gas) and bio-diesel (methyl ester)diesel (methyl ester)

Bundled Bundled housing project housing project over 3000 low over 3000 low cost housescost houses

Geo-thermal Geo-thermal power plant with power plant with UnocalUnocal

Rural solar homes Rural solar homes system with system with Grameen for 50000 Grameen for 50000 houseshouses

Bio-diesel (methyl ester) Bio-diesel (methyl ester) Production from Residual Production from Residual Vegetable Oil Vegetable Oil

Landfill project Landfill project aimed at the aimed at the recovery & recovery & collection of collection of LFG for LFG for subsequent subsequent use as thermal use as thermal or electrical or electrical energyenergy

Transport project Transport project in Yokjakartain Yokjakarta

Electric vehicle Electric vehicle project in Dhakaproject in Dhaka

Thermo Power Plant Thermo Power Plant through a semi dry through a semi dry Anaerobic Bio-digestion Anaerobic Bio-digestion

technologytechnology

We assist project developers:We assist project developers:

By providing a technical team with expertise for By providing a technical team with expertise for each project activityeach project activity

By assisting with approval, validation, By assisting with approval, validation, registration and transactionregistration and transaction

By providing a portion of the transaction costsBy providing a portion of the transaction costs By providing project facilitatorsBy providing project facilitators By sourcing investors/purchasersBy sourcing investors/purchasers In this way maximizing benefits to southern In this way maximizing benefits to southern

hostshosts

Object 2: work with governmentsObject 2: work with governments

We are in close co-operation with all four We are in close co-operation with all four governments to assist them in developing governments to assist them in developing criteria and indicators, and a procedure, for the criteria and indicators, and a procedure, for the approval of CDM projectsapproval of CDM projects

We are also assisting all four governments to We are also assisting all four governments to develop internal capacity for the Designated develop internal capacity for the Designated National Authority officesNational Authority offices

We are facilitating consultative meetings We are facilitating consultative meetings between governments and stakeholdersbetween governments and stakeholders

Object 3: develop a CDM guideObject 3: develop a CDM guide

Our CDM guide will be based on actual Our CDM guide will be based on actual experiences gained from developing CDM experiences gained from developing CDM projectsprojects

The Guide has 64 modules and can be used The Guide has 64 modules and can be used in various formats and for various audiencesin various formats and for various audiences

It will contain template documentsIt will contain template documents It will be web, CDROM and trainer-event It will be web, CDROM and trainer-event

basedbased It will be for all to useIt will be for all to use

Helio helps us to Helio helps us to monitor our projects,monitor our projects,

To develop To develop Monitoring and Monitoring and Verification ProtocolsVerification Protocols

And to develop a And to develop a number of trained number of trained CDM monitorsCDM monitors

Visit us at….Visit us at….