Clean development mechanism
Option 1 (paragraphs 15-17):
15. [The CDM as defined by Article 12 of the Kyoto Protocol shall continue to assist developed country Parties in achieving compliance with part of their QELRCs and assist developing country Parties in achieving sustainable development.]
16. The [supreme body] shall make decisions necessary to enable the applicability of the clean development mechanism hereunder.
17. [The Parties shall, by [20xx], revise the modalities and procedures for the CDM in order to ensure a more equal geographical distribution of projects, sustainable development and environmental integrity, including by establishing:
(a) Benchmarks for baseline setting and determination of additionality for specific project types;
(b) Discount factors for application to issuance of CERs for specific project types as an alternative in situations where it is not feasible to establish baselines on the basis of benchmarks;
(c) Criteria on the primary technology employed in the relevant sector;
(d) A rules-based approach to decision-making.]
Option 2 (paragraphs 18-26):
18. A CDM is hereby defined.
19. The purpose of the CDM shall be to promote nationally appropriate mitigation actions by Parties included in Annex [C] in achieving sustainable development and in contributing to the ultimate objective of the Convention, and to assist developed country Parties in meeting their QELRCs.
20. Under the CDM:
(a) Parties included in Annex [C] will benefit from project activities resulting in CERs;
(b) Developed country Parties may use the CERs accruing from such project activities to meet part of their QELRCs.
21. The CDM shall be subject to the authority and guidance of the [supreme body] and shall be supervised by an executive board of the CDM.
22. Emission reductions resulting from each project activity shall be certified by operational entities to be designated by the [supreme body], on the basis of:
(a) Voluntary participation approved by each Party involved;
(b) Real, measurable and long-term benefits related to the mitigation of climate change;
(c) Reductions in emissions that are additional to any that would occur in the absence of the certified project activity, while adopting methodologies widely and efficiently applied to project activities.
23. The CDM shall assist in arranging funding of certified project activities as necessary.
24. [[The [supreme body] shall ensure that a share of the proceeds from certified project activities is used to cover administrative expenses as well as to assist developing country Parties that are particularly vulnerable to the adverse effects of climate change to meet the costs of adaptation.] [The [supreme body] shall ensure that, subject to an agreement on viability and cost-effectiveness of the market-based approaches, [50] percent of profits from all market-based activities, programmes and projects shall be made available to meet the costs of adaptation in developing country Parties, under the financial architecture of the Convention and its Protocol.]]
25. Participation under the CDM, including in activities mentioned in paragraph 22 (a) above and in the acquisition of CERs, may involve private and/or public entities, and is to be subject to whatever guidance may be provided by the executive board of the CDM.
26. The [supreme body] shall, at its first session or as soon as is practicable thereafter, decide upon guidelines for the implementation of paragraphs 1825 above, including for verification and reporting, taking into account the characteristics of the scheme.
