The Parties to the Kyoto Protocol will define and review the CDM rules that must be followed. Once the Kyoto Protocol enters into force national delegates from each country will meet to make decisions relating to the CDM and the Protocol generally. This meeting is the “Conference of the Parties serving as the Meeting of the Parties to the Protocol” (1.6.1) (COP/MOP) which normally takes place annually.

The day-to day operation of the CDM will be carried out by the CDM Executive Board (1.6.2), which is a board of representatives elected from a cross-section of the Parties. The Executive Board maintains the CDM registry (1.6.4) in which all certified emission reductions that are issued will be held.

Each country will establish a national CDM authority (1.3.2) which will govern national processes for CDM projects.

The CDM Executive Board will accredit independent third party entities around the world that are qualified to validate CDM projects, verify emissions and certify emission reductions. These entities are called “designated operational entities” (1.6.3).

1.6.1 COP/MOP

The Conference of the Parties serving as the Meeting of Parties to the Protocol (COP/MOP) has ultimate authority over the CDM. The COP/MOP will provide guidance to the CDM Executive Board (1.6.2) on its rules of procedure, the rules of the CDM, and the accreditation of designated operational entities (1.6.3).

It will review the annual reports written by the Executive Board, assess the regional and sub-regional distribution of designated operational entities, promote accreditation of entities from developing country parties, oversee the regional and sub-regional distribution of CDM project activities to identify barriers to their equitable distribution, and where necessary, it will assist in arranging funding of CDM project activities.

1.6.2 CDM Executive Board

The CDM Executive Board administers and supervises the operation of the CDM subject to the authority and guidance of the COP/MOP (1.6.1). The Executive Board is comprised of representatives of both developing and industrialized country parties including a representative from the SIDS. The UN pays for the costs of participation of members and of alternate members from many developing country Parties. The initial members of the executive board were elected at COP7 in Marrakech in November 2001.

The duties of the Executive Board include the formulation of new policies such as on how small scale CDM activities function, reviewing validation and certification decisions of designated operational entities, reviewing and adjudicating over the conduct of questionable actions taken by designated operational entities, and addressing practical questions as they may arise in the CDM process. The Executive Board has a wide range of functions including the power to reject the registration of a project in the CDM and to deny project participants CDM credits. It makes decisions on whether projects meet the rules governing the CDM and decides how projects are supervised and regulated.

A key responsibility of the Executive Board is to develop guidelines on baseline methodologies (1.5.1.1). The Executive Board also advises the COP/MOP (1.6.1) on recommendations for new guidelines and policies governing the CDM and is responsible for accrediting designated operational entities (1.6.3) and supervising them in their role as auditors of CDM projects. The Executive Board can suspend or withdraw accreditation of designated operational entities that cease to meet the accreditation standards or CDM’s rules.

The Executive Board is required to ensure access to information on CDM projects. It maintains a publicly available list of all designated operational entities, a database of all CDM project activities, and a repository of its approved rules, procedures, methodologies and standards. The CDM registry (1.6.4) showing the certified emission reductions that have been issued is also publicly accessible.

The Executive Board makes recommendations to the COP/MOP (1.6.1) on modalities and procedures for the CDM, approves new methodologies (such as for baselines, monitoring plans, and project boundaries), and recommends provisions for simplified modalities, procedures and the definitions of small scale project activities.

The Executive Board is supervised and controlled by the COP/MOP and may receive administrative supporting its activities by the UNFCCC Secretariat (xxxi) and subsidiary bodies that support the COP/MOP (1.6.1).

Link to CDM Executive Board home page: http://cdm.unfccc.int/EB

1.6.3 Designated Operational Entities

A designated operational entity must validate (1.5.2) a project as meeting CDM requirements before the project is registered with the CDM Executive Board.

A different designated operational entity must later verify (1.5.4) the emission estimates made for the project once it is in operation. For small projects (1.5.6.4), the operational entity that validates a project may also verify it. During the verification process the operational entity will determine whether the project’s documentation is in accordance with the requirements of its registered project design document and the CDM’s rules, conduct on-site inspections, review monitoring results, verify that the monitoring methodologies have properly been applied and draft a verification report.

The designated operational entity that carries out the verification also carries out certification (1.5.4) for the project. Certification is written assurance that the project achieved the stated level of emission reductions.

Links to further information: http://cdm.unfccc.int/DOE/
http://cdm.unfccc.int/DOE/AccPro

1.6.4 CDM Registry

A registry of the investments and emissions reductions generated under the CDM is maintained by the CDM Executive Board (1.6.2) The CDM registry records and ensures the accurate accounting of the issuance, holding, transfer and acquisition of CDM credits by developing country Parties. Industrialized country parties have their own national registries under the Protocol that are governed by separate accounting mechanisms.

The CDM registry is a standardized electronic database and will include common data elements relevant to the issuance, holding, transfer and acquisition of credits. Its structure and data formats will provide accurate, transparent and efficient exchange of data between national registries, the CDM registry, and an independent transaction log. Non-confidential information relating to the contents of the registry will be made publicly available.

The registry will hold separate accounts for different types of project participants, for administrative fees, and for different stages in the CDM process. Each CDM credit will be held in only one account in one registry at a given time and each CDM project will be given its own account in the registry. To ensure accurate accountability, each credit will have its own serial number. Upon being instructed by the Executive Board to issue credits for a CDM project activity, the registry administrator will issue the specified quantity of credits into a pending account, forward a percentage of credits to cover administrative expenses and to assist in meeting costs of adaptation to the appropriate accounts in the CDM registry, and forward the remaining credits to the registry accounts of project participants and parties involved.