what is the clean development mechanism?

In the Kyoto Protocol has been specified the instruments to achieve the greenhouse gases (GHG) mitigation accordind to each country clasiffication. Mexico is a Non Annex 1 country an has access only to the instrument denominated Clean Development Mechanism (CDM).

The definition of the CDM is that is an instrumento of the Kyoto Protocol which goal is to help the Non Annex 1 parties to archive a sustainable development, and for the Annex 1 parties, to fulfill their quantity compromises of limitation and/or reduction of emissions.

In other words, the CDM allows the Annex 1 countries, whose reductions of greenhouse gases (GHG) emissions are mandatory, to finance projects with a lower costs, allowing them to achieve their goals with the usage of the Certified Emissions Reductions (CERs) obtained from projects located in countries of the Non Annex 1, which are focus to reduce GHG emissions or to increase the absortion of theses gases.

For Mexico, as many latin american countries, the CDM allows to make an important contribution to the GHG mitigation and to fight against global warming, with national and international resources, using the economic benefits granted by the CERs.

how it works?

To achieve the benefits of a CDM initiative is necessary to identify an opportunity of GHG mitigation. The most common initiatives usually are of renewable energy, fuel switch in industry and transport, landfills, energy efficiency in industries and carbon technological development.

There are many markets that can use the CDM, and after the identification of an opportunity, it has to be approved by the United Nations Frameworck Convention for Climate Change (UNFCCC) by establish a baseline of how the project dimensions are, the expected amount of GHG emissions mitigation, and the expected costs and profits.

The project has to be approved by the local authorities in first place. In the Mexican case there has been designated the Intersecretarial Comission for Climate Change (CICC in spanish) which is leaded by the Environment and Natural Resources Ministry (SEMARNAT), and has to give his approval by a document. The CICC is the Desginated National Authority (DNA) registred in the UNFCCC.

With the approval of the CICC, que project is registered in the UNFCCC, and the Executive Board (EB) of the UNFCCC has to gave their approval if the project has one of the approved methodologies or with a new methodology, if the project has a coherent way to mitigate GHG emissions, including the methodology in the registered methodologies..

After the approval of the EB is chosen a Designated Operational Entity (DOE) who has the funtion of validate, even in situ, the project process, methodologies and parameters. When the project starts to operate, the DOE is also responsible of monitoring the project activities and has to do a report in 30 days to be registered as a CDM project.

The DOE is also the entitiy in charge to verified that the project runs in the boundaries of the approved methodology and, at the end of each period, has to do a report before the EB of the amount of GHG emissions mitigated with which the EB can deliver the CERs. Each CERs gaved by the EB is equivalent to one metric ton of carbon dioxide (tCO2e)mitigated per year.

Each CDM project has to designate one DOE for the validation process and another DOE for the verification and monitoring, unless the CDM project was registered as a small scale. In that cases the same DOE can do the validations and the verifications processes.

Cosmo Consulting work side by side with our clients in the oportunities identification that can be used in the Clean Development Mechanism, so the economic benefits can be obtained form the carbon credits and generate higher levels of wealth.