亚开行-京都到巴黎过渡清洁发展机制（英）-2021.10-69页_1mb

Summary: From Kyoto to Paris—Transitioning the Clean Development Mechanism

Core Content

The document discusses the transition of the Clean Development Mechanism (CDM) activities and Certified Emission Reductions (CERs) under the Paris Agreement, particularly focusing on the implications for the Asia and Pacific region. It outlines the political and technical challenges associated with this transition and provides insights into the potential impacts and considerations for host countries.

Main Objectives

• To analyze the transition of CDM activities and CERs under Article 6 of the Paris Agreement.
• To assess the implications of different transition criteria and cutoff dates.
• To provide a framework for understanding the transition process and its effects on host countries and the carbon market.

Key Points

The Clean Development Mechanism (CDM)

• The CDM was a key mechanism under the Kyoto Protocol, enabling developing countries to earn CERs through greenhouse gas (GHG) mitigation projects.
• The Asia and Pacific region hosts approximately 80% of all registered CDM activities, indicating a significant stake in the transition process.

Transition to Article 6 of the Paris Agreement

• Article 6 of the Paris Agreement introduces new mechanisms for international carbon markets, including the New Market-based Mechanism (NMM) and the Joint Crediting Mechanism (JCM).
• The transition involves three main components: methodologies, activities (projects and Program of Activities [POAs]), and CERs.
• The transition of CDM methodologies is expected to be less controversial, but the transition of CERs is highly politicized.

Transition Criteria and Cutoff Dates

• Cutoff dates are proposed as eligibility criteria for the transition of CDM activities.
• A cutoff date of 1 January 2013 would allow a significant portion of CDM activities to transition.
• A cutoff date of 1 January 2016 would drastically reduce the number of eligible activities.
• Late cutoff dates seem to favor Least Developed Countries (LDCs) and Small Island Developing States (SIDS).

CER Transition

• CER transition is particularly controversial, as it affects the use of Kyoto Protocol units in the Paris Agreement period.
• Some countries want to prevent the bilateral use of CERs under Article 6.2 or the use of CERs generated in their jurisdiction for their own NDCs.
• A significant portion of issued CERs in the Asia and Pacific region remain unused, with 42% of issued CERs (over 700 million) not yet used, compared to a global average of 55%.
• The transition of unused CERs is difficult to estimate due to varying assumptions about activity continuation and monitoring.

Host Country Considerations

• Host countries need to prepare for the transition, including understanding the implications for their existing CDM portfolios.
• There are differing views on whether certain activity types should be excluded from transition.
• The transition process requires coordination and alignment with international rules and guidelines, which are still under negotiation.

Implications and Challenges

• The transition of CDM activities and CERs will impact the financial viability of existing projects and the environmental integrity of the carbon market.
• The use of CERs for NDC compliance could undermine the ambition of the Paris Agreement if not carefully managed.
• Host countries, especially developing ones, need to ensure they have the capacity and readiness to participate in the new Article 6 mechanisms.
• The transition process will involve both technical and political negotiations, with the final outcome yet to be determined.

Key Tables and Figures

Key Boxes

• Box 1: The CDM in a Nutshell – Overview of the CDM's purpose and function.
• Box 2: Extending the Mandate of the CDM Executive Board – Discussion on the potential expansion of the CDM Executive Board's role.
• Box 3: Factors Affecting Estimates of Potential Activity and CER Transition Volumes – Key variables influencing transition volumes.
• Box 4: CDM Transition Challenges – Example from Nepal highlighting the difficulties faced during the transition.
• Box 5: Preliminary Responsibilities of the Host Country Under Article 6.4 – Outline of the host country's role in the new mechanism.

Conclusion

The transition of the CDM to the Paris Agreement framework is a complex and politically sensitive process. The document emphasizes the need for clear and consistent rules, the importance of host country readiness, and the potential impact of different transition criteria on the volume and type of activities that can be transitioned. It also highlights the role of ADB in supporting this transition and the importance of understanding the implications for the Asia and Pacific region. The outcome of the COP26 negotiations will be critical in shaping the future of international carbon markets and the transition of CDM activities and CERs.