The Future of CDM
31st May 2011
The Future of CDM
Madlen King, Global Head of Climate Change & Sustainability Lloyd’s Register Quality Assurance (LRQA)
I think that the first most important thing in relation to CDM and the future of CDM is the uncertainty regarding its future as we have this lack of international agreement with limited success, both at Copenhagen COP 15 and Cancun COP 16. We do have serious uncertainty regarding the demand for the credits generated from CDM projects. We have the EU Scheme that has restricted the types of CDM credits so they’re going to be accepted in their scheme in the future and we have other countries that are working more in relation to bilateral schemes and moving away from what seems to be the UN scheme.
And so what we have at the moment is we have a peak in demand and verification projects up until the end of 2012 when the Kyoto first commitment period closes. So there’s a large peak in demand for CDM verifications at the moment and that’s having knock-on implications on resources within the Designated Operational Entities (DOE). The DOE is providing validation and verification of CDM projects are quickly needing to resource up to cover the demand in the market this peak season period and consequently there may inevitably be a drop in demand for DOE’s and therefore questions will be raised about what happens to the DOE’s resources after that peak in demand. In COP 16 in Cancun there was a positive statement coming from the parties that international emissions trading and the project based mechanisms of the Kyoto protocol meaning the CDM and joint implementation will continue to be available to Annex 1 parties to meet their emission limits but that still relies on a second commitment period to be agreed and the discussions if they continue the international discussions – We’ve just completed the first round of the sessions in Bangkok and there will be two discussions in Bonn in June but at the moment there is very limited progress on any agreement and hence this uncertainty still remains and is likely to remain until COP 17 is held in November.
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