Program of Activities

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Program of Activities (PoA) is a modality of project development under the Clean Development Mechanism (CDM) of the United Nations Framework Convention on Climate Change (UNFCCC). [1]

Contents

The rationale

The aim of PoAs was to allow replicable projects with low and physically spread greenhouse gas reductions into the CDM. This type of project is often linked to higher sustainability benefits, but are too small to pay back the transaction cost involved in the CDM process. It was expected to allow African countries a higher participation in the CDM in particular. [2]

Historical background

The PoA idea originated from a decision made at the December 2005 Conference of the Parties/Meeting of the Parties in Bonn, Germany where it was decided that local/regional and national policies or standards cannot be considered as CDM project activities, but project activities under a PoA can be registered as a single CDM project activity. By its thirty-sixth meeting (November 2007), the CDM Executive Board approved the official templates for Project Design Documents suitable for Programme of Activities (titled PoA-DD), its constituent activities (CPA-DD), and issued procedures to register PoAs and issue CERs. [3] It also amended small-scale CDM methodologies to make them suitable for programmatic activities. By its forty-seventh meeting (May 2009), [4] an improved version of PoAs guidance was published. The new guidance, along with a grace period that allowed retroactive PoAs to be submitted before 31 December 2009, had allowed more submission of PoAs to the EB, which rose to around 40 by the end of 2009. As of November 2010, after the 57th meeting of the CDM Executive Board, a total of 54 PoAs were under validation and 5 were registered.

Current structure

The classical structure of CDM uses a project-by-project process for registering and verifying projects. This approach involves very high transaction costs, a long time to market, and a high risk of non-registration. It is also very difficult to implement such a process in least developed countries and small island states where average project sizes and the scale of national markets tend to be smaller, so relative transaction costs are higher. In order to reduce transaction costs in CDM and expand the mechanism's applicability to micro project activities, the CDM Executive Board launched the Programme of Activities modality. Under this modality, a PoA Coordinating/Managing Entity (CME), which can be (for examples) a government agency, NGO or business, develops a PoA which defines broad parameters for project activities (referred to as CDM Programme Activities or CPAs) that are eligible for inclusion in the PoA. Whereas stand-alone CDM projects must be approved individually by the CDM Executive Board, a PoA needs to be registered only once by the CDM Executive Board. After that, it can include an unlimited and unspecified number of individual CPAs without recourse to the CDM Executive Board. [5]

Examples

Projects that distribute compact fluorescent lamps, efficient cook-stoves, Building refurbishment or solar water heaters, are some examples where PoAs, as defined by CDM, can be used. The modality is also applicable for larger scale activities such as small hydro power plants or composting. [6] [7] [8]

Advantages, criticism

Projects conducted using PoA offer several advantages over alternative prevailing project-based approaches:

Projects utilizing PoA may also have several disadvantages over projects utilizing the prevailing, project-based approaches:

DOE liability

In a PoA, the DOE is given the ability to decide whether or not to include a CPA within the PoA. This responsibility transfer from the CDM Executive Board to the DOE has not been conceded without any guarantees taken by the executive board. To avoid wrong inclusion of CPAs within the PoA, the Board has prepared a set of rules [10] that allows the DNA (Designated National Authority) or the executive board itself to challenge the decisions from the DOE. Other characteristics are:

The DOE liability as currently framed is considered inoperable for the following reasons:

Many PoAs that are currently in validation have been launched in anticipation that the issue of DOE liability would be resolved, as also requested by CMP5. If the corresponding rules are not reformed then many of these PoAs will not be viable since DOEs will either be unable to include CPAs or the DOE fees charged will be too high. As a consequence, DOE liability has not contributed to make PoAs popular among DOEs. Many DOEs are unwilling to validate PoAs and reluctant to include new CPAs. To date, only one PoA has managed to perform CPA inclusion (PoA 2767). [11]

PoA pipeline

Out of 59 PoAs, 9 are located in Africa (15%), 1 in the Middle-East (2%), 38 in Asia (64%) and 9 in Latin America (19%). If at first sight the centre of gravity of PoAs activity remains in Asia, the unevenness between Asia and the rest of the world is not as strong as it is for CDM. [12]

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References

  1. ↑ Beaurain, François; Schmidt-Traub, Guido (November 2010). Developing CDM Programmes of Activities: A Guidebook (PDF). South Pole Carbon Asset Management Ltd.
  2. ↑ "Archived copy" (PDF). Archived from the original (PDF) on 2011-07-25. Retrieved 2010-12-29.{{cite web}}: CS1 maint: archived copy as title (link)
  3. ↑ "Meeting Report of the 36th Meeting of the UNFCCC - CDM Executive Board".
  4. ↑ "Meeting Report of the 47th Meeting of the UNFCCC - CDM Executive Board".
  5. ↑ "PoA - Developing CDM Programmes of Activities: A Guidebook by South Pole Carbon Asset Management," (PDF). Archived from the original (PDF) on 2016-03-04.
  6. ↑ "UNFCCC Registry, list of validated PoAs".
  7. ↑ "UNFCCC Registry, list of registered PoAs".
  8. ↑ "German Development Bank (KfW) Blue Book on PoAs" (PDF).
  9. ↑ "PoA - Developing CDM Programmes of Activities: A Guidebook by South Pole Carbon Asset Management," (PDF). Archived from the original (PDF) on 2016-03-04.
  10. ↑ "Annex 37 of the 55th Meeting of the UNFCCC - CDM Executive Board".
  11. ↑ "PoA - Developing CDM Programmes of Activities: A Guidebook by South Pole Carbon Asset Management" (PDF). Archived from the original (PDF) on 2016-03-04.
  12. ↑ "iges_cdm_poa_db_e.zip".
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