Validation of Scenario Analysis andControl Group Baselines
World Bank/PCF Workshop
Delhi, Oct. 22, 2002
Trygve Roed-Larsen
Det Norske Veritas (DNV)
DNV’s International Network
The DNV organisation comprises 300 offices in 100 countries, with a total of 5,500 employees
DNV is an autonomous, self-owning foundation established in 1864
Introduction
Key issues for scenario analysis
Key issues for control group projects
DNV experiences
Project design
Validation
Registration
Project implementation/
monitoring/reporting
The CDM project stages
Verification
Certification
Project owners
Independent party
Registration Body
Involved parties:
Stakeholders
Report made public, hearing
Stakeholder
CDM project validation
Validation
Validation
Project Design
Baseline Study
Monitoring Plan
Stakeholder Views
CDM validation - work flow
Tasks considered by the audit team for a validationexercise
Validation task set-up
•Phase 1: Risk-based approach to reviewingreceived material
•Verification of the assumptions and methodology
•Technical review of the documentation
•Assessment of how sensitivities and data uncertainties areaddressed
•Assessment of the monitoring/verification protocol
•Review of GHG data management, control & reporting
•Review of the concept sustaining projects “additionality”
•Review of local stakeholders’ comments
Validation task set-up
•Phase 2: Tasks during site visit
•Confirm local & national monitoring capability
•Verify sustainable development indicators conform tolocal and national priorities
•Confirm project scenarios
•Assessment of the monitoring/verification protocol (to amore detailed level)
•Assessment of comments from public review process
•Preliminary conclusions of validation audit/ draft reportand validation protocol for review
Validation task set-up
•Phase 3:
•Disclosure of any outstanding issues
•Finalisation of validation report in publishable formatand issuance of final validation opinion. Forwardrequest for registration.
Baseline validity - crediting period
• Two possibilities for crediting period. Project participantsshall select one of the following:
• (49a): 7 years + max two renewals of 7 years each,using original or updated baseline (Operational entitydetermines and informs CDM Exec. Board)
• (49b): Maximum 10 years with no option of renewal
•The “with project” and “without project”scenarios are useful for illustration ofbaselines
•Key issues:
–Equality of services
–Ascertain the same project boundaries
–Supply and demand changes
Scenario analysis
•Key areas to assess:
–Existing policies e.g. on renewable energy
–Energy supply infrastructure development, e.ggas pipeline extensions
–Technology present and not present in HostCountry
–Consequences of political aspirations, e.g. EUaccession
–The balance between supply and demand
•If supply < demand, the baseline may change!
Scenario analysis
•Chacabuquito Hydropower Project
–Supply > demand: Marginal plant baselineapproach selected and monitored (Coal-firedplants)
–Demand > supply: Least cost option (gas-firedCHP) of capacity expansion falls in as defaultbaseline.
Scenario analysis example
Barrier analysis
•Barrier analysis are useful for validators inorder to understand present and futurescenarios
–“Tangible” barriers, can be quantified:
•Financial/investment
•Technology
•Market penetration
•Legislation
–“Intangible” barriers, only qualitative:
•Competitive disadvantage
•Capacity/management resources
•Institutional
Control group baselines
•Requires significant work from the Project Proponent’sside!
•Validator must ensure that:
–Monitoring capacity in place, inclusive of data processingcapacity
–Control group data addresses the key issues (“must have!”, not“can have” data)
–The data to be collected reflects the complete picture of necessaryinformation
–Action points are clearly described when thresholds are exceeded
Control group baselines & verification
•Control group baselines are likely to create more workduring project verification.
•Not only emission records and project performance data,but also control group data need to be verified
•Likely to require specialized skills to a greater extentthan a “normal” GHG verification, as control groups lieoutside project boundaries
Baseline and Credit
Year
GHG emissions [t CO2-eq]
BAU baseline emissions
Emission baseline
allowing for existing
measures for abatement
With project emissions
Additional emission
reductions
Abatement project
Experiences
•Standardization may help on the way, but noproject is identical to another!
•Need for specialized skills among validatorsdespite standardization
•Projects using control groups are usuallymore labor demanding than others
GHG emission reduction projects
DNV experiences
With GHG emissions reduction projects
•Principles of ISO 14000 series for management systems
•Additional principles of: allocation, materiality andcompleteness
•Industry standards, including risk-based approach
DNV’s basis for GHG auditing:
Robust system ensuring transparency,efficiency and accountability and maintainingpublic trust
