first sdm joint coordination workshop initial plenary: durban outcomes henry derwent bonn,...
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First SDM Joint Coordination Workshop
Initial Plenary: Durban Outcomes
Henry Derwent
Bonn, 24February 2012
A reminder of how the international carbon market was
supposed to work
K3
K2K1
NA1
Kyoto Land Non-Annex1 (Dev’g Countries)
CDM Projects
Trading SchemebetweenInstallationsetc
AirlandAirlandJIProjects
The way the global carbon market is going
CDM System and
developments
CDM System and
developments
NationalSector orCity
Country 2
Trading Scheme
Country 1
GlobalSector
National/local offset standards
(EPA, California)
National/local offset standards
(EPA, California)
Bilateral systems or
deals
Bilateral systems or
dealsInternational
offset standards(VCS, CCX,
CCBA)
International offset
standards(VCS, CCX,
CCBA)
Domestic Projects
Offset Projects 2012: a Toxic Mixture of objections
• Purchasing indulgences: corporates or individuals• « Anyway » tonnes: Can’t trust foreigners• « Anyway » tonnes: Can’t trust baselines• Contaminated currency (domestic and linking)• Allows putting-off domestic investment • The ghosts of low-hanging fruit• International negotiations: « Supply only » days are over• EUETS over-supply• Objections in principle to some meths• Integrity of land-use meths?• Emerging trading schemes not taking someone else’s rejects« Everybody knows the CDM doesn’t work»« The CDM is evil »
Primary CDM picture looks very bad
• CDM activity declined because:– reduced compliance needs due to slow
economic recovery– uncertainty re: post-2012 rules– less origination activity as buyers seek
predictable credits and fewer projects– competition with AAUs and secondary CERs– Lower demand from EUETS
Durban’s improvements not enough to change this
CDM value(US$ billion
-12%
-59%
-46%
Durban’s Improvements to the Mechanisms
• Doubt about continuation of CDM (and JI?) removed• Materiality regime agreed• Pointers in the right direction on: significant deficiences,
simplification, co-benefits, additionality, first of a kind, faster processing of methodologies, consequences of methodologies being put on hold, standardised baselines, suppressed demand, digitisation, reduced waiting times, support for underrepresented countries, loan scheme, new DOEs
• Better understanding for the users’ experience, better norms of communication, and the rule of law
• CCS• Appeals mechanism not agreed• But EU-ETS close-down (impacts on EU MS too) now
beginning to be understood
Focus for this Workshop
• Large number of issues on the table • Golden thread: effective functioning of the market• Kyoto Project Mechanisms under threat like never
before• Participants leaving while need is rising• Going forward, little compelling reason for private
sector to stay interested• A system that works is the best defence
www.ieta.org
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