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Context for CDM and philosophy behind CDM
Some definitions
How CDM works
Basic eligibility criteria
Types of CDM projects
Disqualifications
Additionality and baseline assessment

How CDM works - Some definitions

“AAU” or “Assigned Amount Units” are the units used to define emission allowances assigned under the Kyoto Protocol. These allowances are for man-made emissions of greenhouse gases which an industrialized country is permitted to emit over a certain commitment period. One assigned amount unit is the equivalent of a metric tonne of Carbon Dioxide (“CO2e”).

“Additionality” is a criterium that is used to establish whether a reduction is additional to what would occur in the normal course of events.

“Baseline/baselining” means establishing what emissions would occur in the normal course of events, that is in the absence of the proposed project. This measure is used to establish how many credits, if any, should be allocated to the project.

“CDM” is the Clean Development Mechanism, a flexibility mechanism as created by article 12 of the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which signifies a project undertaken in a developing country with a view to reducing greenhouse gas emissions. Credits are awarded for these reductions – Certified Emissions Reductions;

“CER” means Certified Emissions Reduction as defined by article 12 of the Kyoto Protocol. One CER is awarded for a reduction in greenhouse gas emissions equivalent in impact to one tonne of carbon dioxide. While the exact legal nature of a CER remains uncertain it is probably akin to a negotiable instrument

“Conference of parties (COP)” is the supreme body of the United Nations Framework Convention on Climate Change

“Environmental additionality” is demonstrated if a project results in reductions in the emissions of greenhouse gases, compared to a “business as ususal” case

“Executive Board” means the CDM Executive Board, a supervisory body of the CDM accountable to the COP that approves CDM projects, certifies operational entities and issues carbon credits.

“Financial additionality” is demonstrated if a project calls upon additional funds rather than diverting funds already destined for the host country in the form of official development assistance

"Designated Operational Entity" or DOE is an independent legal entity desinated to validate CDM activities and emissions reductions, accredited by the Executive Board and accountable to it.

“Project” means a CDM proposal.

“Registration” means the process by which the Executive Board is formally informed of a project

"Stakeholder" is any member of the public that is effected or likely to be affected by a proposed CDM project

For detailed information on how CDM works, use the menu on the bottom left of the page and click on "How CDM works".

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