Oxford Energy and Environment Comment October 2008 Implementing the Bali Action Plan : What Role for the CDM ?

The Bali Action Plan (BAP) envisages enhanced “measurable, reportable, and verifiable” (MRV) developing country mitigation actions “supported and enabled by” MRV technology, financing and technology building from developed countries. Finding an acceptable operationalisation of this North/South relation will be key to a success of the BAP. The authors suggest that one way of doing so could involve using the Clean Development Mechanism (CDM) as an instrument for establishing direct ‘enabling links’ between MRV mitigation activities in developing countries and MRV finance from developed countries. In order to adapt the CDM for this purpose – and for this purpose alone (i.e. not for its traditional offsetting use) – the authors propose that developed countries take on obligations to obtain a certain number of CDM credits (CERs) to be retired (and not used as offsets against developed country mitigation commitments). As such, these Retirement-CER Obligations would, in essence, constitute an obligation to enable, through provision of finance, MRV mitigation actions in developing countries in conformity with the BAP. As such they would be separate from the mitigation commitments concerning developed country emissions. They would also be separate from MRV commitments in respect of technology transfer and capacity building, also required under the BAP.