A number of various stakeholders participate in the development, approval and operation of CDM project. Below is the list of key participants with their major roles and responsibilities.
Designated National Authority (DNA)
Approves CDM projects by issuing a letter of approval. Has the responsibility to decide whether the CDM project activity makes a contribution to achieving the country's sustainable development goal, whether the country agrees to participate in the project and whether the country is of the opinion that GHG emission reductions as under the Kyoto Protocol defined will be generated.
Designated Operational Entity (DOE)
Represents a legally independent entity accredited by CDM Executive Board that can validate proposed CDM Projects and verify and certify Greenhouse Gas emission reductions. The DOE prepares a validation report and submits it to the CDM-EB, together with the PDD, approval letter from the host country, and an explanation on how comments are taken into account in order to apply for registration. The DOE is to maintain a publicly available list of all CDM projects for which it has carried out validation, verification and certification.
CDM Executive Board (CDM EB)
Oversees the implementation and administration of the CDM. Among others CDM-EB puts the validation report and PDD of the proposed project activity on the UNFCCC Web site for public comments.
CDM Project Developer
Typically a private entity in a Non-Annex I country (developing country) develops a CDM project and prepares the required documentation (Project Design Document - PDD) to receive host country project approval through the DNA, project validation and GHG emission reduction verification and certification through the DOE. As long as a project developer becomes the projects operating entity, it will also be responsible for project monitoring and sending periodic monitoring reports to the DOE contracted for GHG emission reduction verification and certification. If operating entities will set up for the purpose of monitoring the project, monitoring responsibilities shift to those stakeholders. A project developer may also act as project financier through provision of private equity to the project investment costs and is to submit new baseline and monitoring methodologies to the DOE once no approved methodology can be applied.
Apart from the project developers through equity provision in a CDM project, international banks and foundations provide major capital in CDM project investment. National or regional banks in developing countries could principally also act as financier, however, financing schemes through these entities is rare today. As far a Carbon Financing (CER purchase) is concerned, either Annex I country governments or private entities could take this role.
Annex I Country
Annex I countries could either act as Carbon Purchaser in the CDM. Further, Annex I countries may provide the required technology to the developing country through appropriate private entities. Annex I countries, when recognised as a project participant, have to also issue a letter of approval for the proposed CDM project.
Technical Consultants / CDM Specialists
Technical consultants assist CDM project developers with a number of services that a project developer may not undertake itself due to unfamiliarity with CDM procedures and modalities or due to the CDM not becoming a core business of its activities in the long run. Technical consultants assist in developing the PDD including data collection, could interact with DOEs for the purpose of refining the PDD based on DOEs comments, undertake project monitoring, support development of periodic monitoring reports, develop new baseline and monitoring methodologies if needed and could play a role in commercialising CERs.
Legal experts - once drawn in by project developers - assist with working out Emission Reduction Purchase Agreements (ERPAs) required between the party entitled to hold CERs (it could be a consortium of entitled parties) and the potential CER buyer to formulate general conditions of contract for CER transfers.
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