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CDM Introduction
The Kyoto Protocol （link）to the United Nations Framework Convention on Climate Change
(UNFCCC) came into force on February 16, 2005, and is now fully operational. Most of the industrialized countries have committed to reducing their aggregate emissions of greenhouse gases (GHGs) by 5.2 percent below 1990 levels during the protocol’s first commitment period (2008–2012); the United States and Australia have so far declined to ratify it. To make the process cost-effective, the following three flexible mechanisms were established under the protocol:
· Joint implementation (JI) among Annex I countries
· The Clean Development Mechanism (CDM) for use between non-Annex I (developing) and Annex I (developed) countries
· Carbon trading among Annex I countries
The CDM is a mechanism where Annex I countries with a specific obligation to reduce a set amount of greenhouse gas (GHG) emissions by 2012 under the Kyoto Protocol assist non-Annex I countries to implement project activities to reduce or absorb (sequester) at least one of six GHGs (see box 1.1). Non-Annex I countries are signatories and ratifiers to the Kyoto Protocol; however, they do not adhere to reduction targets stipulated under the protocol. The reduced amount of GHGs becomes credits called certified emission reductions (CERs), which Annex I countries can use to help meet their emission reduction targets under the protocol (UNFCCC 1997).
Box 1.1. The six greenhouse gases addressed under the Kyoto Protocol
Source: UNFCCC 1997.
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The six GHGs are not equal In terms of global warming potential (GWP), which measures the relative radiative effect of GHGs compared to CO2. For example, one tonne of methane has a GWP as potent as 21 tonnes of CO2.
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Greenhouse gas |
Global warming potectial |
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1.Carbon dioxide ( |
1 |
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2. Methane (CH4) |
21 |
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3. Nitrous Oxide |
310 |
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4. Hydrofluorocarbons (HFCs) |
140-11700 |
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5. Perfluorocarbons (PFCs) |
6500-9200 |
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6.Sulfur hexafluoride (SF6) |
23900 |
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The CDM provides opportunities for emission reductions as well as sustainable development in developing countries. China’s economic growth is based mainly on fossil fuel energy-especially coal, which represents about 70 percent of its total energy consumption. China is therefore recognized as one of the most important countries where there is potential for reducing GHG emissions as well as for CDM participation.
CDM projects beginning after January 1, 2000, are eligible to earn certified emission reductions (CERs)
Chinaratified the Kyoto Protocol on August 30, 2002, issued its Interim Measures for Management and Operation of CDM Projects in China on June 30, 2004, and renewed these on October 12, 2005, which set up the regulations for CDM project developers to follow. Because some issues are not yet sufficiently well defined (for example, the allocation of CER benefits), efforts are being made to clarify the detailed rules for these measures. The key fields of CDM project developed in China include: Recyclable energy, energy efficiency,and methane recycle and coal-bed gas development.
Case study of CDM project
1、General information of project
· Name of Project：Wind-power farm located at Helan Mountain, Ningxia Province
· Applicant：Ningxia Power Group Co., Ltd.
· Installed Capacity：111.9 MW
· Total investment：about 0.916 billion RMB
· Annual average over the crediting period of estimated reductions：172,500 tCO2e
· The renewable crediting period:7×3 years (2005-2025)
· CER price: 6 Eur/ton CO2 （assume）
· CER income：about 1.37 million Euro /year
2 Timetable of project
· October 2003，CDM project development dialogue
· October 2005，Final version of PDD was submitted to the verification council of national clean development mechanism
· November 2005，DOE conducted validation of project and PDD was revised according to validation report.
· December 2005, The proposed project got the approval of National Development and Reform Commission
· December 2005, the proposed project got the approval of counties included in annex 1
· March 28, 2006, Registration request to EB
· May 28, 2006, the proposed project got the registration of EB and became the 9th project approved by EB.
3、Lessons from this project
· The duration of project development was almost two years, which is a little longer owing to the limits of relative international regulations and procedures.
· Too many changes of project factors, including: investment plan, construction schedule, project hurdles ,etc
· This project is very typical owing to the great potential of wind power field
· Assistance extent for the owner to supply required data materials determines the accordance of project itself.
· Support from national management authority responsible for CDM is specifically important, and communication with project owner is also very essential.
· Difficulty caused by culture difference
· All the data resources should be noted
· Materials without public resource should be marked with obtaining approach, such as telephone interview with contact details
· Comments of stakeholders should be collected carefully with paper records.
· Approved methodology should be used with priority
· Additionality tools is very useful for additionality analysis
· Project owner should collect and storage corresponding data so as to be convenient for CER calculation and verification.
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