Latin America-Alberta-Canada CDM Conference: Conference Summary

Proposals for joint initiatives put forward by participants at the Clean Development Mechanisms Conference included (1) the development of regional guidelines to assist governments in setting regulatory framework for projects to qualify as CDMs, (2) development of regional baselines and regional performance indicators for social benefit and sustainable development, (3) a specific project in Mexico to test the CDM framework and eligibility criteria, (4) development of bilateral agreements between governments, (5) staff exchanges between associations and governments, (6) government recognition for private sector actions such as a letter affirming that certified emission reductions would be accepted for commitments, (7) sharing of information on websites, and (8) capacity building, training programs and workshops. The Conference also identified common ground and shared interest in CDM initiatives among participants, and readiness to explore joint ventures and technology transfer opportunities. There is wide-spread agreement on the need to resolve uncertainties of CDM, such as baseline and additionality; monitoring, reporting, certification; buyer/seller liability; adaptation levy for international emissions trading, joint implementation and clean development mechanism transactions. Significant consensus exists regarding benefits of 'learning by doing' and the need for minimizing transaction costs and risks. Baseline and Additionality are recognized as the critical issues, with social benefits, sustainable development aspects of projects, and the critical nature of integrity, technical expertise, and track record of both partners as close seconds. The importance of framework arrangements, host country approval, clear designation of responsibility and authority to approve projects, the need for specific guidelines and specific approval procedures, country-to-country agreements and national crediting arrangement are recognized by all participants. With regard to issues related to implementing CDM projects, it is well accepted that additionality, measurement, monitoring and verification of reductions are important criteria for project selection for potential investors, while sustainability is the key objective for developing country host governments. There is substantial agreement about issues in emissions trading that remain to be resolved, namely clear title to reductions being offered, and guarantees related to timing and volume reductions eventually transferred to buyer/investor. With regard to financing CDM projects, the World Bank Prototype Carbon Fund is prepared to provide experience with eligibility criteria as well as kick-start more extensive trading in GHG emission reductions. Also, several financial institutions have declared themselves ready to consider addressing the financial uncertainties and risks associated with CDM projects