DEHSt Side Event
The CDM Sustainable Development Tool –
Assessment and Options for Improvement
27 May 2015, 15.30-16.30, Room 11, Level 0, Carbon Expo, Barcelona
Christof Arens
Wuppertal Institute
Project Co-ordinator
Karen Holm Olsen
UNEP DTU Partnership
Senior Researcher
Outline of side event
 Aim:
 Presenting and discussing findings from recent study „Analysis and
Evaluation of the Usability of the CDM EB’s SD Tool“
 Commissioned by German Emissions Trading Authority
 Conducted by UNEP DTU & Wuppertal Institute
 Agenda:
 Presentation of the study: Karen Hom Olsen, Christof Arens
 Reaction from panelists: Ulrika Raab, Edwin Aalders, Niclas Svennigsen
 Discussion / Interactin with audience
Seite
Slide 1
Wuppertal
WuppertalInstitute
Institut
Structure of project & the presentations today
 Step 1:
Assessing Sustainable Development (SD) provisions of
selected mitigation mechanisms and comparing them
with the CDM SD tool (Arens)
 Step 2:
Literature review and interviews with stakeholers on
usability of the SD tool (Olsen)
 Step 3:
Synthesis and recommendations (Arens)
Seite
Slide 2
Wuppertal
WuppertalInstitute
Institut
Step 1: Comparing SD provisions of selected mitigation mechanisms
 Literature review on best practice approaches and methods
 Selection of 8 approaches to Sustainability assessment for
comparison:
• project-based:
• wider UNFCCC:
• Crown Standard
• UN REDD Programme
• CDM Gold Standard
• UNDP NAMA SD Tool
• Social Carbon Methodology
• Climate, Community and
Biodiversity
(CCB Standards)
• MDB safeguards:
• ADB Safeguard Policy
• IFC Sustainability Policy
Seite
Slide 3
Wuppertal
WuppertalInstitute
Institut
Methodology
Assessment category
Assessment Criterion
Type of answer
SD Tool
Social Carbon Methodology
narrative
project-based
project-based
CCB Standards
CDM Gold Standard
Crown Standard
UN REDD
UNDP NAMA SD Tool
project-based
programme / project level. Plenty of links to national
strategies, esp. Forest programmes
The Tool has been designed to evaluate SD performance of
a NAMA and corresponding activities ("interventions"). It
refers to the SDGs agreed at the UNCSD 2012 and proposes
a set of indicators how to evaluate the NAMA's
performance against these goals. There are no linkages to
national strategies or spatial boundaries. NAMA developers
and policy makers may choose, which of the SD goals and
corresponding indicators they want to evaluate and
monitor.
Object of assessment
Spatial boundaries of the SD
assessment; Linkages to national
strategies?
Scope: Applies to energy and land use and forests i.e.
Scope: promoting the development of forest protection,
emission reduction projects in the fields of renewable
restoration and agroforestry projects, CCB Standards aim at
energy, end-use energy efficiency, waste-handling and
identify high quality multiple-benefit land-based carbon
disposal as well as afforestation/reforestation projects.
projects. Activities are usually smaller in scale. Not
Activities are usually smaller in scale. Not necessarily linked
necessarily linked to national programme/strategy
to national programme/strategy.
Method of assessment
 Definition of three initial assessment categories
with corresponding criteria in large matrix
Are indicators used? Is the approach
integrated or not in terms of naturesociety linkages? Is the assessment
qualitative/quantitative? Are effects
monetized
ADB
All projects, programmes, policies, strategies financed by
ADB, including:
"do no harm" assessment with wide spatial boundaries
IFC
Standards pertain to:
(i) investments financed directly by IFC;
(ii) investments implemented through financial
intermediaries (FIs) or managed by IFC’s Asset
Management Company or any other IFC subsidiary, as well
as investments funded in part or in whole by donors; and
(iii) advisory services.
"do no harm" assessment with wide spatial boundaries,
assessments to take into account national plans
PDD with do no harm assessment, SD assessment, and
sustainability monitoring plan.
Safeguard system with 7 GS principles incl. criteria
mandatory for all GS carbon market projects and
programmes to be applied considering SD impacts at
different stages.
PPs to describe relevance of a principle to the project
activity, an assessment of the gravity of the risks
(low/medium/high), and corresponding mitigation measure
The CCB Standards establish a safeguard system that
planned to be undertaken.
The NAMA developer or policy maker has to identify the
provides detailed guidance with criteria and indicators that
impacts of the NAMA himself/herself. In a dedicated
are applied at project level:The CCB Standards have defined
PPs must then provide a detailed impact assessment in
Indicators and parametres are used. The CDM developer
column "effect on indicator", he/she has to classify the
a project checklist with determined criteria which can be
terms of SD (“sustainable development matrix”), incl.
shall provide a number of reports to check the information:
impact against the corresponding indicator as positive,
completed in one step. To earn CCBA approval, projects
Data used to score the indicators must be collected through
plausible qualitative explanation of potential impacts.
1. Official Documents
negative or neutral. Thus, the tool does not provide any
must satisfy all seventeen required criteria. Criteria are
interviews, questionnaires and/or meetings with
PPs are not required to assess non-affected indicators.
2. Analytical reports/ measurements from laboratories
7 principles with 24 criteria, but no indicators. Integration measurement method for the proposed indicators, but the
grouped under a “General Section”, a “Climate Section”, a
stakeholders. Therefore, a selection of stakeholders who
Requirement to score project on environmental, social and 2.1 Air quality measurement 2.2 Noise level measurement and references to, for example, multiple functions of forest. NAMA developer/policy maker has to develop this method
“Community Section” and a “Biodiversity Section”. Each of
will be involved and/or impacted by the project also needs
economic indicators (12 indicators). GS toolkit proposes
2.3 Water quality measurement
No qualification, no monetization.
himself/herself or to he/she has to use an appropriate
the CCB Standards’ criterion has numerous detailed
to be identified.
possible parameters per indicator as guidance. For each
3 Technical specification of the equipment and machinery
existing (external) method. As such, the tool does not give
indicators which all have to be treated by the project
parameter, baseline situation and project situation must be
installed for the CDM project
any guidance for monitoring and evaluation, but is basically
proponent. Qualitative and quantitative approach
described, as basis for scoring “negative”, “positive” or
4 Calculation details from the project developer
a multi-criteria-analysis. The weighting of the different
(emissions).Integrated approach (assessments beyond
“neutral” in comparison to baseline situation. Negative
indicators is implicitly provided by the tool, as indicators
project boundaries). A without project reference scenario
criteria can potentially be neutralised with mitigation
can only be positive, neutral or negative.
has to be deefined. Additionality to be proven.
measures.
Project must contribute positively to at least two of the
three categories (environmental, social and economic) and
be neutral in the third category for GS eligibility.
a) Categorization of env./social risk magnitude: A
(significant risk)- C (minimal risk) +FI
b) Overall safeguard policy incl. 4 Safeguard
requirements:Environment, Involuntary Resettlement,
Indigenous peoples, special requirements for different
finance modalities
includes Prohibited Investment Activities List
a) Categorization of env./social risk magnitude: A /FI-1
(significant risk)- C /FI-3 (minimal risk)
b) 8 Performance Standards that IFC's clients have to meet:
PS 1: Assessment and Management of Environmental and
Social Risks and Impacts:
i)integrated assessment of env./social impacts, risks and
opportunities of projects
ii)community engagement
performance management by the client
applicable to all, requirement to establish an Environmental
and Social Management System (qual./quant.)
PS 2-8 establish objectives and requirements requiring
particular attention on:
Labor and Working Conditions
Resource Efficiency and Pollution Prevention
Community Health, Safety, and Security
Land Acquisition and Involuntary Resettlement
Biodiversity Conservation and Sustainable Management of
Living Natural Resources
Indigenous Peoples
Cultural Heritage
narrative
indicators, not integrated, qualitative, non-monetized
Is sustainability assessment
mandatory?
y/n
n
y
y
y
y
(y)
"can be applied in the formulation of REDD+ programmes,
in the review of programme documents and in the
application of the planning, monitoring and reporting
framework"
y
y
y, but responsibility of the client
Is the assessment ex-ante and/or expost?
narrative
ex-post
Both. Ex ante: eligibility criteria: The Project activity must
not result in extreme negative environmental and social
impacts.
Ex post: Indicators are being monitored periodically. The
auditor’s job is to assess if the information explicitly
described in the indicators is reliable and properly
evidenced by the Authorized Developers.
es ante, assessment of Project Design Document PDD
ex ante
Ex ante: The objective is to provide project information
beyond CDM PDD in order to assess the potential for
sustainable development prior to the issuance of the Letter
of Approval (LoA).
ex ante
Both. For monitoring purposes (i.e. ex post evaluation), the
NAMA developer/policy maker may choose parametres
such as "household per intervention". These may then be
measured in each year over the lifetime of the NAMA and
can be compared against the baseline. There is no
procedure to figure out the baseline or the NAMA's
lifetime.
both
both
Is sustainability assessed during
approval process?
y/n
y (by host countries, not using the tool)
y
y, project implementation reports on relevant CCB criteria
incl. target-performance comparison
y
y
y
y
y
y
Is an ex post monitoring and
verification mandatory?
y/n
n
y
y, verification at least every five years, performed by an
independent auditor.
y, see GS principle 7: Project to be monitored, reported and
independently verified throughout the entire crediting
period.
n
y
y
y, reviewed by ADB
y, reviewed by IFC
y,
for Cat. A projects options assessment required, looking at
alternatives to the project’s location, design, technology
and components.
The options assessment will also examine the “no project”
alternative. Rationale for selecting the particular project
details,
including a cost-benefit analysis that takes into account
environmental costs and benefits of possible alternatives
yes, +Environmental&Social Management System reviewed
by IFC
The assessment must be repeated during stakeholder
consultation. The GS provides project proponents with a list
of indicative guiding questions for the scoring exercise with
local communities
Overarching set up
of the standard
 Synthesis of information
 Condensation into four final overarching
categories:
Is compliance with national / int'l
law assessed? Is an EIA mandatory?
Who uses the tool and to whom is it
important?
narrative
narrative
DNAs assess projects and check compliance with national
law. If an EIA is required at n'l level, it must be carried out
and taken into account. No check of compliance with
intern'l law
project developers use the tool to demonstrate the 'cobenefits' of their projects. It is important for them, they
might get a premium price for the CERs. It's also important
for buyers seeking quaility credits.
There is no reference to this.
not compliance assessed but the General Section’s criterion
on legal status and property rights requires projects to
respect rights to lands, territories and resources as well as
compliance with national and local laws and regulations in
the host country
?
project developers. Label to reward carbon projects for
positive impacts that are not directly related to the
project developers. Label to reward carbon projects for
positive impacts that are not directly related to the
project’s climate impacts (non carbon benefits or coproject’s climate impacts (non carbon benefits or coProject developers: They receive carbon offsets with Social
benefits). Credits from projects that are equipped with
benefits. Credits from projects that are equipped with
Carbon Standard.
these premium labels are supposed to obtain a higher price these premium labels are supposed to obtain a higher price
than “conventional” ones. In turn, investors receive credits than “conventional” ones. In turn, investors receive credits
of certified high quality with respect to the projects’
contribution to sustainable development
The Thai law includes provisions related to pollution control
as well as environmental regulations. If the CDM project
does not meet these requirements, mitigation measures
shall be proposed.
y
NA
DNA: Thailand Greenhouse Gas Management Organization
(Public Organization); Ministry of Natural Resources and
Environment
national governments, designing their REDD+ strategie
NAMA developers/policy makers
Which of the following positive
impacts are covered?
– Scope
Assessment of Sustainability
impacts
þ
þ
þ
þ
þ
þ
þ
NA
þ
þ
þ
þ
þ
Environment – Water
þ
þ
þ
þ
þ
þ
Environment – Natural
resources
þ
þ
biodiversity
biodiversity
þ
þ
þ
Social – Jobs
þ
þ
þ
þ
þ
þ
þ
Social – Health & Safety
þ
þ
þ
þ
þ
þ
Social – Education
þ
þ
human and institutional capacity
þ
þ
þ
Social – welfare
þ
þ
Livelyhood
þ
þ
þ
Economic – Growth
þ
þ
þ
Economic – Energy
þ
þ
Economic – Technology
Transfer
þ
þ
Economic – Balance of
payments
þ
þ
No coverage of positive impacts because of focus:
Safeguarding standards/ "do no harm"
þ
þ
þ
þ
þ
application of norms of good governance, promote poverty
reduction, further principles with regards to the foresty
sector, p.ex. 'Maintain and enhance multiple functions of
forest including conservation of biodiversity and provision
of ecosystem services'
equality
n
y
y
access to investment
general section: project proponents have to identify
potential natural and human-induced risks to the project
benefits and to describe how these risks are managed.
finance recipients, financial sector intermediaries: "variety
of
financial institutions, investors, insurers, and
owner/operators"
þ
þ
þ
NB: project-specific indicators (e.g. efficient lighting).
Indicators may for instance be: Sale of Credits, Projected
waste quantity
Other
Are negative impacts (co-costs)
covered in approval / monitoring
processes?
– Type of assessment
Environment – Air
Environment – Land
finance recipients, financial sector intermediaries
Performance requirements intended as safeguards
of certified high quality with respect to the projects’
contribution to sustainable development
Tick the box:
y do no harm approach qualitative explanation which risks
exist and how to avoid/address them
both approval and monitoring: Focus of standard. BUT:
Cost/Benefit Analysis!
both approval and monitoring: Focus of standard. BUT:
Cost/Benefit Analysis!
Violation of human
rights
þ
No requirements but reference to Thai law
þ
þ
þ
Labour rights violations
þ
þ
þ
y/n
n
y
Tick the box:
If yes, which of the following aspects
are covered?
– Review and evaluation
þ
No requirements but reference to Thai law
Child labour
þ
No requirements but reference to Thai law
þ
þ
Forced Resettlements
þ
No requirements but reference to Thai law
þ
þ
þ
Distruction of cultural
heritage
þ
No requirements but reference to Thai law
þ
þ
þ
(þ) (Gender)
þ
Discrimination
þ
No requirements but reference to Thai law
þ
Unsafe & unhealthy
work environment
þ
No requirements but reference to Thai law
þ
Corruption
þ
No requirements but reference to Thai law
(þ - see principle of democratic governance)
Damage to environment
or natural habitat
þ
The Thai law includes provisions related to pollution control
as well as environmental regulations. If the CDM project
does not meet these requirements, mitigation measures
shall be proposed.
þ
Other
NB: project-specific regulations (e.g. efficient lighting).
Indicators may be a matter of course
þ
The above mentioned positive effects may also be negative.
þ
þ
inclusion of transboundary impacts; strong reflection of
gender issues; dedicated exclusion list of projects
Resource efficiency, pollution prevention, biodiversity
conservation, natural resources +dedicated exclusion list of
non-fundable projects
Tick the box +
explanation, if applicable
Global stakeholders are
consulted
– Stakeholder consultation framework
þ
þ
NA
Local stakeholders are
involved
þ
þ
þ
Organized public participation forum or seminar according
to specific guideline for stakeholder consultation
þ
NA
þ
þ (depending on project type)
LS are identified in a
structured process
þ
þ
þ
There is a dedicated TGO guideline which is only available
in Thai
þ
NA
þ
þ (depending on project type)
Project doc's available in
local language(s)
þ
þ
þ
There is a dedicated TGO guideline which is only available
in Thai
þ
NA
þ
þ (depending on project type)
þ
þ
þ
There is a dedicated TGO guideline which is only available
in Thai
þ
NA
þ
þ (depending on project type)
þ
þ
There is a dedicated TGO guideline which is only available
in Thai
þ
NA
þ
þ (depending on project type)
þ (depending on project type)
Is a meeting held with LSs?
Is the meeting place within
reach for LS?
How is the stakeholder consultation
A non-technical summary
process set up? Is any of the
was presented
following items covered?
þ (depending on project type)
A meeting report is
produced
þ
þ
þ
þ
þ
NA
þ
Stakeholder feedback
meeting / communication
þ
þ
þ
There is a dedicated TGO guideline which is only available
in Thai
þ
NA
þ
SD monitoring plan
developed
þ
þ
There is a dedicated TGO guideline which is only available
in Thai
þ
NA
þ
principle of free, prior and informed consent (FPIC), and a
few more
NA
There is a dedicated TGO guideline which is only available
in Thai
y, "Impartial, accessible and fair mechanisms for grievance,
conflict resolution and redress must be established and
accessible during the consultation process and throughout
the implementation of REDD+ policies, measures and
activities "
NA
y, requirement to set up local grievance/redress
mechanism at project level, plus general accountability
mechanism of ADB
Performance Standard 1 "supports the use of an effective
grievance mechanism"
n
y, see above
NA
y, see above
y
all documents re stakeholder involvement have to be made
publicly available (Website). Projects have to demonstrate
all documents re stakeholder involvement have to be made
that they have obtained the Free Prior Informed Consent
publicly available
(FPIC) of those whose property rights are affected by the
project
Other
Stakeholder Consultations
Is a grievance mechanism
established?
y/n + narrative
n
n, but grievance is possible in monitoring context.
Is it possible to intervene in
approved projects (corrective action
procedures)?
y/n + narrative
n
y, During the Validation it is allowed, and even encouraged,
that Certifying Entities should ask Authorized Developers
for changes in the approved indicators, either because
some indicators cannot be audited or because collecting
evidence for the indicator is possible, but not feasible.
Seite
Slide 4
Project proponents must establish different methods to
allow for continuous input and grievance expression during
the entire project lifetime. They are required to make
available a comment book to allow stakeholders to provide
y, the CCB Standards ask the project proponent to install a feedback on the project. In addition, projects are to provide
grievance redress procedure for the handling (hearing,
the possibility to make comments by telephone and
responding to and resolving) of stakeholder grievances in
Internet, a method that may be particularly useful in
an adequate time period. All grievances that cannot be
regions where stakeholders are spread over large
resolved by the project proponent must be referred to a
geographical areas. In areas with low rates of literacy,
third party or mediator. For grievances that cannot be
projects may optionally nominate an independent mediator
resolved through mediation, the CCB Standards expect
to allow for the communication of grievances. In all cases,
projects to refer to arbitration or to the courts in the
projects must regularly check the comments received,
relevant jurisdiction.
record responses, designate persons responsible for
responding and monitoring the issue, and state whether or
not the issue raised has been resolved. For any activities
following complaints or for the need of further neutral
information, an independent expert may be hired
no information found. Pre approval procedure: An
independent auditor approved by the CCBA then assesses
the project against each of the CCB Standards’ criteria. The
assessment is made on the basis of the information
contained in the PDD and the evidence gathered during a
project site visit. The auditor prepares a draft validation
report specifying which criteria and indicators the project
does or does not satisfy and raises corrective action or nonconformity requests for any of the deficiencies identified.
After receiving the draft validation report, the project
project esign phase: Depending on the outcome of the
stakeholder consultations, the project design may have to
be modified..
þ (depending on project type)
þ
In case of potentially significant adverse effect, stakeholder
processes are to be intensified
Wuppertal
WuppertalInstitute
Institut
Findings of first working step
 Scope
 Assessment types
 Monitoring and evaluation
 Stakeholder processes
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Slide 5
Wuppertal
WuppertalInstitute
Institut
Scope
 Project-based approaches assess sustainability in narrow boundaries
(logic of carbon offset projects)
 Safeguards of the MBS: very wide assessment boundaries due to
need to assess positive and negative effects of high variety of
intervention types
 Focus on limited number of projects types facilitates development of
stringent methodologies and indicators
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Slide 6
Wuppertal
WuppertalInstitute
Institut
Assessment Types
 All except SD tool: assessment of co-benefits as well as co-costs
 Scoring approaches are a common method to gauge the degree of
positive/negative contributions of an activity
 Exclusion criteria (e.g. negative/positive lists) also common
 Assessment of effects on SD frequently through check lists pre-defining
parameters and criteria (SD tool approach especially noteworthy)
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Slide 7
Wuppertal
WuppertalInstitute
Institut
Measuring & Evaluation, Stakeholder Processes
 Common: ex-ante assessment of expected impacts, monitoring of activities over
project duration
 Some approaches, e.g. GS, require independent validation
 MDBs: continuous monitoring, environmental and social management systems
(risk category 1)
 Others: larger gaps between monitoring activities
e.g. NAMA SD tool: three-year intervals
 Stakehoder processes integral part of most analyzed approaches – local but also
global
 Grievance mechanisms mandatory in MDB safeguards (individual appeals possible in
certain cases)
 CCB and GS require independent mediators for arbitration processes
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Slide 8
Wuppertal
WuppertalInstitute
Institut
Summary
 highly differentiated requirements for SD assessment
 SD Tool in its current form quite limited
 Shortcomings:
 no coverage of negative impacts, missing safeguards
 no monitoring & evaluation
 no stakeholder requirements, grievance mechanism
 Inclusion of these elements could strengthen CDM as a whole
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Slide 9
Wuppertal
WuppertalInstitute
Institut
Step 2
Usefulness of the CDM EB SD tool
Outline:
 Objective, methods and data
 Synopsis of literature reviewed
 Interview findings
 Usability of the CDM EB SD tool - Synthesis
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Slide 11
Wuppertal
WuppertalInstitute
Institut
Objective, methods & data
Objective: To assess the appropriateness of the EB’s voluntary SD tool against
host country needs for sustainability assessments of CDM projects and other user
perspectives incl. how the SD tool may assist DNAs, project proponents and buyers
in broadening consideration for SD
Methods: The work package comprises three steps: 1) Literature review of DNA
and SD tool user practices for SD assessment of CDM projects, 2) Interviews with
selected host country and project proponent’s experiences and needs for using the
EB’s SD tool and for sustainability assessment of other mitigation actions, 3)
Assessment and analysis of survey results and literature with regard to host country
needs and difficulties
Data: Out of 377 peer-reviewed articles on the topic of ‘CDM and sustainable
development’ found in the Web of Science by January 2015, the review covers 18
studies incl. technical and policy papers focusing on the subset of articles on
governance of the CDM’s contribution to SD and particularly the role of host country
DNAs. Eight in-depth interviews were conducted in the period December 2014 and
January 2015 with four DNAs (Brazil, China, Uganda and Cambodia), three project
developers (Norway, Chile, Switzerland) and one buyer (Government of Sweden)
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Slide 12
Wuppertal
WuppertalInstitute
Institut
Synopsis of literature reviewed
Three issues:
1)State of knowledge on the CDM’s contribution to SD:
•
•
Key challenges are: 1) The lack of a common definition of what sustainable development means,
which makes it hard to measure and compare SD impacts across countries in an objective manner; 2)
The trade-off between the two objectives of the CDM known as a ‘race-to the-bottom’ where
competition among host countries for CDM investment creates an incentive to lower the SD standards
to attract investment
The High-Level Panel of the CDM Policy Dialogue in 2012 concluded that ‘it is not possible to reach a
definitive conclusion on the sustainable development impacts of the CDM to date, given the
insufficiency of objective data’ (Dialogue 2012)
2)Governance of the CDM’s contribution to sustainable development
•
•
A project-by-project approval of SD in CDM projects is the most widely used approach. Overall, three
types of approaches exist: 1) Assessment based on checklists and SD criteria; 2) A fund for
sustainable development based on taxes and levies differentiated by project types and 3) Certification
of projects according to an international or national standard for SD assessment (Koakutsu, Tamura
et. al., 2012)
The market demand for labelled credits is directly related to evidence suggesting ‘that host countries
are failing to ensure SD benefits of CDM projects’ (Parnphumeesup and Kerr 2011).
3)Evaluation of the EB’s SD tool
•
An evaluation of the use of the tool was carried out in July 2014 with a survey being sent to 4,626
stakeholders (UNFCCC, 2014). The SD tool is found to meet its objective as a voluntary measure to
highlight the co-benefits of CDM activities, while maintaining the prerogative of Parties to define their
national sustainable development criteria.
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Slide 13
Wuppertal
WuppertalInstitute
Institut
Interview findings (1)
Uganda (DNA)
China (DNA)
Cambodia
Brazil (DNA)
Sweden (buyer)
(DNA)
Experience with SD assessment of CDM projects
What SD criteria Checklist
No SD criteria
are used?
Checklist
Checklist
Prioritisation of
EE, RE & biogas/
methane
projects. No SD
criteria
Due diligence
based on draft
EB CDM SD tool
incl. safeguards
and LSC
procedures
Yes, SD tool is
sent to PPs and
SDC report for
site visits &
follow-up
Green
Development,
Norway (PP)
Enaex, Chile
(PP)
DNV-GL Global
Carbon
Development
Benefits
Standard
(draft)
Methodologies
are developed
for quantifying
development
benefits
SD criteria
defined by the
company
Host country
SD criteria
Use of EB SD
Tool and LoA
obtained from
DNA
PoA-DD the
basis of LoA
Yes, SD
benefits to be
certified and
sold in their
own value or
internalized in
the CER price
No, too costly.
LSC do not add
value
Yes, the
company will
follow up on
SD impacts
The company
is client driven,
so only if
clients
demand
follow-up and
will pay it
N/D
How is the LoA
decision/SD
assessment
made?
Ranking of SD
criteria/Interministerial
committee
Compliance
with eligibility
criteria/Interministerial
committee
Scoring/Inte
r-ministerial
committee
Assessment/I
nterministerial
committee
Is there interest
and capacity to
monitor and
verify SD claims?
Yes, but little
capacity
No interest
N/D
Yes, sector
ministries
follow up, not
DNA
Is there a need
for safeguards
against negative
impacts?
Guidance
needed
Yes, other
agencies take
care of this
N/D
No,
safeguards
and LSC are
part of EIA
Yes, focus is to
avoid negative
impacts
Are there
additional
requirements for
approval?
EIA is required
except for
clean
technologies
EIA, oral
presentation,
tax, 49/51
rule, licences,
ERPA
EIA is
required for
some
projects
EIA, validation
report, LSC
procedures.
Example of
LoA
Draft SD tool is
DNAs should
used to structure not be
the due diligence involved due
to 14
low capacity
/SD assessmentSeite
Slide
& risks of
South Pole,
Switzerland
(PP)
No, we use
ISO
certification
1909 for
quality
assurance
DNA Chile
LSC were
does not have important to
SD criteria and DNA
do not follow
Wuppertal
WuppertalInstitute
Institut
up after LoA
Interview findings (2)
Uganda (DNA)
Experience with use of the SD tool
Has the SD tool
No
been used?
China (DNA)
Cambodia
(DNA)
Brazil (DNA)
Sweden (buyer)
Green
Development,
Norway (PP)
Enaex, Chile
(PP)
South Pole,
Switzerland
(PP)
No, there is no
dialogue
between PPs
using the tool
and DNA China
No
No
Yes, the draft EB
SD tool is used
incl. safeguards
and LSC guidance
Yes, SDC report
submitted to
UNFCCC
Yes, SDC
report
submitted to
UNFCCC
Yes, SDC report
submitted to
UNFCCC
What is the
general view of
the tool?
Very useful
Not useful to
China
Useful to PPs
Not useful to
Brazil, only to
PPs
Very useful, but
strong
weaknesses
Very useful,
but too simple.
Quantification
is needed
Very useful
and clear
Useful, it goes
into a lot of
detail without
quantification
Is the tool a
simplification or
additional effort?
Options to
expand use of
the tool
Simplification
N/D
N/D
Simplification
Simplification
Simplification
Simplification
Simplification
SDC report
useful for local
stakeholder
consultations
Could be
useful in
China’s
national
carbon trading
system
Strengthen
LSC
procedures
No role for the
tool in relation
to national SD
criteria
Address risks of
negative impacts,
LSC & safeguards
for HRs. SDC
report to be
published with
validation and
verification
reports
Extend use of
the tool for
standardization
across
countries
SD tool useful
for other
projects in the
company, not
only CDM
Quantification
based on
UNFCCC
guidance,
requirements
for validation
and
verification of
SD claims
Should the tool
be mandatory for
PPs to use?
Yes, this is
being
considered for
issuance of LoA
No, voluntary
only
N/D
No, voluntary
only
Yes, it gives
transparency to
the market
No, not all
projects need it
Yes, it makes
sense to MRV
SD benefits
No, we only
responded to a
client request
Seite
Slide 15
Wuppertal
WuppertalInstitute
Institut
Interview findings (3)
Uganda (DNA)
Relevance of the SD tool beyond CDM
Is there a need for
Yes
quantification and
monetization of SD
co-benefits?
China (DNA)
Cambodia
(DNA)
Brazil (DNA)
Sweden (buyer)
Green
Development,
Norway (PP)
Enaex, Chile (PP)
South Pole,
Switzerland
(PP)
No, PPs should
not do more work
Maybe, but it
requires more
effort
Yes, this is tough.
Countries must
do it, a study is
ongoing
No, qualitative
assessment is
sufficient, so far
Yes!
Yes, it would be
useful to get a
holistic
perspective on
the project
Yes
Can the tool enhance
domestic dialogues
on SD?
Yes, SD criteria
reflect macroeconomic
priorities
No
N/D
N/D
Yes, the tool can
enhance the
credibility of CDM
projects
Yes, the tool can
strengthen
domestic SD
assessment
Yes, it would be
useful for DNA if
they gave us a
uniform report
format
Yes, it could
greatly enhance
the value of
mitigation actions
Can the tool assist to
harmonize SD efforts
across mitigation
mechanisms?
Yes, expanded to
a NMM/FVA and
NAMAs for
harmonized
reporting
Yes
Yes, SD
assessment
across
mechanisms
should be
similar
N/D
Yes, the tool could
harmonize SD
assessment across
countries for
transparency
Yes, we need a
common standard
across mitigation
mechanisms
Yes, any tool to
harmonize across
mechanisms
would be useful
Yes, the SD tool
framework is
broad enough to
compare across
mechanisms
Is there an interest in
certification of SD cobenefits?
Yes, Gov. of
Uganda should do
certificates based
on an
international
standard
No
Yes, a national
standard would
be best
N/D
Yes, if good enough.
The Gold Standard is
a commercial tool to
enhance price
Yes, a global
standard incl.
quantification of
development
benefits
Yes, third party
validation and
verification can
show SD efforts to
the world in a
valid way
Yes, interest is
there from the
market (buyers)
and from
government
(NAMAs)
Can human rights be
strengthened
through the SD tool?
Yes
N/D
Yes
No, HRs issues
are taken care of
nationally
Yes, but not through
DNAs
Yes, but this is
political. Projects
should not
document
compliance with
HRs
The company
uses the ‘UN
Global Compact’
to document
respect for HRs
Yes, safeguards
for HRs would be
useful but not
demanded by
clients
Seite
Slide 16
Wuppertal
WuppertalInstitute
Institut
Usability of the EB SD tool – a synthesis
 The SD tool is not directly useful to DNAs, as it is meant for PPs to use
 Yet, the UNFCCC evaluation (2014) found that most DNAs plan to refer to the
tool, when conducting SD assessment for approval of CDM projects at national
level (92%)
 The tool is similar to the checklist approach of most host countries. It does not
give an international definition of what SD means but facilitates a structured
comparison that respects Parties’ prerogative to decide on national priorities
 From the interviews and the literature review there is a clear, emerging interest to
follow-up that SD claims are met
 From the perspective of users of the SD tool, all interviewees find it very useful
and simple as a standardized, qualitative approach to SD assessment. However,
a number of weaknesses are identified, particularly avoiding negative impacts
and attracting a premium price for carbon credits with high sustainable
development benefits
 Comparing user needs with host country DNA practices for SD assessment,
national standards fall short of meeting expectations in the premium market
Seite
Slide 17
Wuppertal
WuppertalInstitute
Institut
Relevance of the SD tool beyond CDM
Overall, SD tool experience can be relevant to CDM and other mitigation
actions in three ways:
1)
Strengthened standards for SD assessment at the international level
2)
Enhanced national standards for SD assessment based on the SD tool,
e.g. by making it mandatory at national level for PPs to use the tool for
issuance of LoAs and by including the SDC report as a basis for local
stakeholder consultations, and
3)
Market players could seek certification of SD impacts of mitigation actions
based on the tool being further developed in line with general
requirements for results-based finance applicable beyond CDM
Seite
Slide 18
Wuppertal
WuppertalInstitute
Institut
Step 3
Conclusions and Recommendations
Methodology of Step 3
 Matrix with different ‘offers‘ of SD assessment in different approaches (Step 1)
 SD reporting ‘needs‘ voiced by practitioners in the interviews (Step 2)
 Recommendations in two consecutive levels:
 Level 1: Improvements to the SD tool
 Level 2: Enhancement of the SD tool
Seite
Slide 20
Wuppertal
WuppertalInstitute
Institut
Matrix matching „needs“ & „offers“
Seite
Slide 21
Wuppertal
WuppertalInstitute
Institut
Level 1 Recommendations (Amendments)
 Introduce no-harm safeguards
Assessing negative impacts, p.ex. based MDGs
 Develop monitoring and reporting guidelines
Optional since EB82 – thorough guidance, separate from GHG monitoring
 Introduce 3rd Party validation and verification of SD claims
Enhancing credibility of SDC reports; separate from GHG assessment
 Link enhanced stakeholder requirements to the CDM SD tool
Use SDC reports as basis; combine with option for grievance mechanism
Seite
Slide 22
Wuppertal
WuppertalInstitute
Institut
Level 2 Recommendations (Enhancements)
 Introduce UNFCCC certification of SD co-benefits
- Meet interest in national certification (see Thailand);
- Develop UNFCCC certification framework for DNAs with low capacity
 Create a global standard for quantification
of SD co-benefits
Establish a value as basis for willingness to extra payment
1.
2.
3.
Develop a global approval standard for quantification methodologies,
Allow PPs and others to develop methods for SD co-benefits
quantification compatible with their needs, and
Assign an institution (e.g. Meth Panel) for the approval procedure
of these methods
Seite
Slide 23
Wuppertal
WuppertalInstitute
Institut
Outlook
 Enhanced CDM SD tool can set robust standards beyond CDM
 Linking and harmonization with emerging mechanisms (NMM, NAMAs...)
 Not only Carbon, also development relevance (Sustainable Development
Goals)
 Globally harmonized SD assessment has multiple benefits:




Comparable across mechanisms
Mainstreamed into national development planning
Integrated into national performance measurement
Ensures compliance with international requirements (e.g. GCF)
Seite
Slide 24
Wuppertal
WuppertalInstitute
Institut
Thank you!
For more information, please contact the project team:
Christof Arens
Karen Holm Olsen
Florian Mersmann
Joergen Fenhann
Frederic Rudolph
Miriam Hinostroza
Christiane Beuermann
Fatemeh Bakhtiari