Executive Summary
The paper addresses critical issues in accelerating the deployment of sustainable development technologies in developing nations while improving the efficiency and environmental effectiveness of the Clean Development Mechanism (CDM) for emission reduction credits. It outlines strategies to enhance the Clean Development Mechanism's performance through sector-based crediting approaches.
Key Findings
1. Introduction
- Definitions: Defines terms related to climate policy, sector-based crediting, and existing trading mechanisms.
- General Considerations: Highlights the importance of sector-based crediting in aligning climate action with sustainable development goals.
- Approach & Outline: Provides an overview of the methodology used to analyze sector-based crediting mechanisms.
2. Sector-Based Crediting: Insights from Existing Trading Mechanisms
- Emissions Trading and CDM: Focuses on leveraging large point sources for emissions trading.
- Influencing Sectoral Developments: Examines how CDM impacts sectoral practices in certain countries.
- Institutional Arrangements: Analyzes the role of institutional frameworks in supporting sector-based crediting.
3. Baselines and Coverage of SCM: Operational Issues
- All-Inclusive vs. New Plants Baselines: Discusses the implications of choosing different baseline scenarios.
- National vs. International Baselines: Evaluates the benefits and challenges of setting baselines within and across countries.
4. Design and Institutional Requirements for Effective SCM
- Policy-Based SCM: Explores how crediting can support policy implementation.
- Intensity Targets: Considers the role of intensity-based targets in encouraging reductions.
- Fixed-Target SCM: Addresses the specific challenges faced by developing countries implementing fixed targets.
5. International Governance Issues
- Approving SCM Baselines: Outlines the process for defining, selecting, and reviewing sector-specific baselines.
- Linkages to Existing Mechanisms: Ensures smooth integration with established frameworks.
- Industry Role: Discusses the potential role of industry in setting international baselines.
- Competitiveness Concerns: Evaluates the impact of international SCM on competitiveness.
6. Summary and Conclusions
- Summary: Recapitulates the main points and findings.
- Conclusions: Offers recommendations for enhancing sector-based crediting mechanisms and their operational aspects.
Methodology
The analysis employs a comparative approach, drawing insights from existing trading mechanisms, particularly the CDM, to inform sector-based crediting mechanisms. It also incorporates operational considerations and governance issues relevant to international climate policy.
Implementation
The paper suggests that sector-based crediting mechanisms can be designed to facilitate technology deployment, improve the efficiency of CDM, and address environmental effectiveness, thereby contributing to global climate mitigation efforts. It recommends specific actions and considerations for policymakers to optimize these mechanisms effectively.
