UNFCCC Type of Audit Standard and Context
Overview
The Clean Development Mechanism (CDM) is a project-based GHG offset mechanism under the Kyoto Protocol. The scheme aims to assist Annex-I parties (industrialized countries with binding emission reduction targets) to cut global GHG emissions in a more cost-effective manner by allowing them to invest in offset projects in non-Annex I parties (developing countries without binding targets). The CDM also aims to assist non-Annex I parties achieve sustainable development, to contribute to the ultimate objective of the treaty, to stabilize GHG concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system within a time-frame that allows ecosystems to adapt naturally, and to ensure that food production is not threatened and that economic development proceeds in a sustainable manner.
he parties to the United Nations Framework Convention on Climate Change (UNFCCC) negotiated and adopted the Kyoto Protocol in 1997. Initially, they only sketched out the basic features of the offset mechanism. In 2001, following a series of negotiations, the rules governing the operation of the mechanism were fleshed out in what are now known as the Marrakech Accords. The first CDM project was registered in 2004, and in the following year, after Russia’s ratification of the Protocol saw it enter into force, the first emission reduction credit was issued to a project. Since then, the scheme has grown rapidly and now dominates the offset market. Since September 2007, the CDM has self-financed its regulatory functions through fees charged to projects and no longer relies on grants from Annex-I countries.
Standard Authority and Administrative Bodies
The CDM Executive Board (EB) consists of 10 members and 10 alternate members representing different UN regions and interest groups under the Kyoto Protocol. The EB oversees the functioning of the CDM. The EB is ultimately accountable to the governing body of the Kyoto Protocol (COP-MOP), which includes representatives of all the countries that have ratified the treaty. The EB is supported by expert panels, which focuses on specific tasks:
§ The Accreditation Panel oversees the accreditation of designated operational entities or auditors.
§ The Methodologies Panel (Meth Panel) reviews the methodologies for setting the baseline for projects and monitoring them. The Meth Panel also considers revisions and improvement to the over 100 approved methodologies.
§ The Registration and Issuance Team (RIT) is responsible for reviewing requests for project registration and issuance.
Within each member country, a Designated National Authority (DNA) is required to issue letters of approval to projects confirming their voluntary participation in the CDM, and host countries must confirm that the activity assists the country to achieve sustainable development.
In Australia the DNA is:
National Authority for the CDM and JI
Department of Climate Change and Energy Efficiency
GPO Box 854
CANBERRA ACT 2601
AUSTRALIA
See http://cdm.unfccc.int/DNA/index.html
Assistant Secretary – Carbon Market Linkages and Electricity Branch
Phone: +61 2 6159 7055
Fax: +61 2 6159 7015
Who can apply for approval to participate in CDM and JI projects?
Any entity that holds an account in the Australian National Registry of Emissions Units is eligible to apply for a CDM or JI Letter of Approval from Australia’s National Authority. For information on how to apply for an account in the National Registry, please refer to https://nationalregistry.climatechange.gov.au.
A CDM or JI project has, however, to be validated by a Designated Operational Entitiy (DOE) (see below). There are no Australian firms that are DOEs.
Designated Operational Entities (DOE) are UNFCCC-approved auditors who validate and verify CDM/JI projects. The current list of DOEs is provided below:
| Ref. Number | Entity | Sectoral scopes for validation | Sectoral scopes for verification and certification |
| E-0001 | Japan Quality Assurance Organisation (JQA) | 1-15 | 1-15 |
| E-0002 | JACO CDM., LTD (JACO) | 1-15 | 1-15 |
| E-0003 | Det Norske Veritas Certification AS (DNV) | 1-15 | 1-15 |
| E-0005 | TÜV SÜD Industrie Service GmbH (TÜV SÜD) (Suspended) | 1-15 | 1-15 |
| E-0006 | Deloitte Tohmatsu Evaluation and Certification Organization Co., Ltd. (TECO) (Deloitte-TECO) | 1-3 | 1 |
| E-0007 | Japan Consulting Institute (JCI) | 1, 2, 4, 5, 10, 13 | 1, 2, 13 |
| E-0008 | KPMG AZSA Sustainability Co. Ltd. (KPMG-AZSA) | 1-3, 10 | 1-3, 10 |
| E-0009 | Bureau Veritas Certification Holding SAS (BVCH) | 1-15 | 1-15 |
| E-0010 | SGS United Kingdom Limited (SGS) | 1-15 | 1-15 |
| E-0011 | Korea Energy Management Corporation (KEMCO) (KEMCO ) (Partially suspended in scopes 2, 4, 6-15) | 1-15 | 1-15 |
| E-0013 | TÜV Rheinland Japan Ltd. (Formerly TUV Industrie Service GmbH – TUV Rheinland Group) (TUEV Rheinland) | 1-15 | 1-15 |
| E-0016 | ERM Certification and Verification Services Ltd. (ERM CVS) | 1-5, 8-10, 13 | 1-5, 8-10, 13 |
| E-0020 | Conestoga Rovers & Associates Limited (CRA) | 1, 4, 5, 10, 12, 13 | 1, 4, 5, 10, 12, 13 |
| E-0021 | Spanish Association for Standardisation and Certification (AENOR) | 1-15 | 1-15 |
| E-0022 | TÜV NORD CERT GmbH (Former RWTÜV Systems GmbH) (TÜV Nord) | 1-15 | 1-15 |
| E-0023 | Lloyd’s Register Quality Assurance Ltd. (LRQA) | 1-13 | 1-13 |
| E-0024 | Colombian Institute for Technical Standards and Certification (ICONTEC) | 1-5, 8, 13-15 | 1-5, 8, 13-15 |
| E-0025 | Korean Foundation for Quality (KFQ) | 1-5, 9-11, 13 | 1-5, 9-11, 13 |
| E-0027 | Swiss Association for Quality and Management Systems (SQS) | 1-15 | 1-15 |
| E-0028 | Ernst & Young Shin Nihon (Shin Nihon) | 1-3 | 1-3 |
| E-0030 | Nippon Kaiji Kentei Quality Assurance Ltd. (NKKKQA) (NKKKQA) | 1, 3-5, 7, 12, 13 | 1, 3-5, 7, 12, 13 |
| E-0031 | Perry Johnson Registrars Clean Development Mechanism, Inc. (PJR CDM) (PJR CDM) | 1-3, 7, 9, 12, 13, 15 | 1-3, 7, 9, 12, 13, 15 |
| E-0034 | China Environmental United Certification Center Co., Ltd. (CEC) | 1-3, 8, 10 | 1-3, 8, 10 |
| E-0037 | RINA Services S.p.A. (RINA) | 1-8, 10, 11, 13-15 | 1-8, 10, 11, 13-15 |
| E-0038 | SIRIM QAS INTERNATIONAL SDN.BHD (SIRIM) | 1-4, 13 | 1-4, 13 |
| E-0039 | Korean Standards Association (KSA) | 1-5, 13 | 1-5, 13 |
| E-0040 | Environmental Management Corp. (EMC ) | 1-8, 13-15 | 1-8, 13-15 |
| E-0041 | Japan Management Association (JMA) | 1-4, 6, 8, 9, 14 | 1-4, 6, 8, 9, 14 |
| E-0042 | Germanischer Lloyd Certification GmbH (GLC) | 1-3, 7, 10, 13 | 1-3, 7, 10, 13 |
| E-0044 | China Quality Certification Center (CQC) | 1-13 | 1-13 |
| E-0045 | Ernst & Young Associés (France) (EYG) | 14 | 14 |
Regional Scope
The scope of the CDM is international, involving all countries that have ratified the Kyoto Protocol.
Recognition of Other Standards/ Linkage with Other Trading Systems.
Although the tradable units of other schemes cannot be used as CDM credits, several other compliance programs and voluntary standards either already recognize and accept Certified Emission Reduction (CERs) or plan to do so in the near future. Such schemes or standards include the EU ETS, the Regional Greenhouse Gas Initiative (RGGI), Canada’s Offset System for Greenhouse Gases, the Voluntary Carbon Standard (VCS), the Voluntary Offset Standard (VOS) and Green-e. The Gold Standard certifies projects that use CDM methodologies and also comply with additional Gold Standard criteria.