Clean Development Mechanism Methodology Guidebook

Ministry of the Environment Chapter I: Theoretical Basis for CDM Methodologies Chapter II: How to Describe NMB/NMM/PDD Chapter III: Displacement Effect of Grid Electricity November, 2004 Table of Contents C DM M E T H O D O L O G I E S G U I D E B O O K Table of Contents 3 Foreword and Acknowledgments 5 Chapter 0 Introduction, Aim, Outline of this Manual7 Introduction 7 Baseline and Standardization 7 Position of Methodology in the Project Cycle 8 Details of the Methodology Approval Process 11 Current Issues 13 Aim of the Guidebook Outline of this Guidebook 14 16 Chapter 1 Theoretical Basis for CDM Methodologies 18 What is Baseline? The Role of Methodology and its Relation with PDD Main Elements Constituting the Baseline Methodology Applicability Conditions 18 19 20 20 Baseline Scenario and Additionality 22 Baseline Emissions and Emission Reductions 28 Theoretical Construction of Methodology Other Extraneous Elements 36 37 Selection of Approach 37 Boundary and Leakage 37 Uncertainties 39 Conservativeness and Transparency 40 Explanation and its Application of “Additionality Tool” Viewpoint of Monitoring Methodology 42 46 What is the Monitoring Methodology? 46 How to Fill the Monitoring Parameter Table 47 QA / QC 48 Chapter 2 How to Describe NMB/NMM/PDD 51 New Methodology for Baseline (NMB) 51 SECTION A. Identification of methodology: 51 SECTION B. Overall summary description: 52 SECTION C. Choice of and justification as to why one of the baseline approaches listed in paragraph 48 of CDM modalities and procedures is considered to be the most appropriate: 52 SECTION D. Explanation and justification of the proposed new baseline methodology: 53 SECTION E. Data sources and assumptions: 55 SECTION F. Assessment of uncertainties (sensitivity to key factors and assumptions): 56 SECTION G. Explanation of how the baseline methodology allows for the development of baselines in a transparent and conservative manner: 56 New Methodology for Monitoring (NMM) 57 SECTION A. Identification of methodology: 57 SECTION B. Proposed new monitoring methodology: 57 Project Design Document (PDD) 61 SECTION A. General description of project activity 61 SECTION B. Application of a baseline methodology: 63 SECTION C. Duration of the project activity /Crediting period:64 SECTION D. Application of a monitoring methodology and plan: 66 SECTION E. Estimation of GHG emissions by sources: 68 SECTION F. Environmental impacts: 69 SECTION G. Stakeholders’ comments: 70 ANNEX 1: Contact Information on Participants in the Project Activity 70 ANNEX 2: Information Regarding Pubic Funding 70 ANNEX 3: Baseline Information 71 ANNEX 4: Monitoring Plan 71 Chapter 3 Theory on Grid Electricity Displacement Effect 72 Needs for the Theory Operating Margin and Build Margin Methodology for Small-Scale CDM Consolidated Methodology Development of Consolidation — Master Methodology Theoretical Basis Practical Exercise [Internal Grid Connected to External Grid] Terminology 72 72 73 74 78 83 86 95 FOREWORD AND A CKNOWLEDGMENTS Background and the aim of this manual CDM [Clean Development Mec