Conference June 9 – June 13, 2008

I think that your initiative is thoughtful, and certainly timely, however its important to consider the work already being done in this field and to build an argument as to why you feel this is a necessary next step. In your background materials I don’t seem to see a justification for focusing on what you call “micro-scale” projects. Besides the assumed closer link to on the ground SD, you might wish to consider the implications of this decision. First, as you likely know, the Marrakesh Accords do include a provision for “small scale” CDM projects – laying out simplified rules and procedures (see: http://unfccc.int/resource/docs/2005/cmp1/eng/08a01.pdf). Second, because most buyers in the Kyoto market are in need of large volumes to meet their hard caps for the first commitment period, small scale projects are less appealing to many buyers because of the higher transaction costs and (sometimes perceived) higher risk. These projects often tend to be more expensive as it is, so adding an additional premium to account for your full cost accounting idea would drive these projects right out of the market for the majority of purchasers.

In general, you could be well served by building rationale for why there is a need for your concept, and how it differs or builds on what has been done previously. There are ways to build development benefits into CDM initiatives, and much work has been done in this area over the past 5 years or so. Just two examples are IISD’s Development Dividend project (http://www.iisd.org/climate/markets/dividend.asp) as well as the Gold Standard initiative (http://www.cdmgoldstandard.org/). The trick really is striving for benefits without pricing your projects out of the market, as the percentage of buyers willing to pay more just for a “green” label is slim (particularly as the price of carbon goes up). You could also strengthen your work by doing an assessment of who is buying carbon credits, and where your potential market for enhanced credits exists. This may help you to tailor your idea toward a possible market.