Marina Ploutakhina, UNIDO, outlined her organization's activities relating to climate change and provided background information on UNIDO's baseline determination methodology. She noted that UNIDO seeks to enhance capacity building through a learning-by-doing approach and noted its activities in Brazil and South Africa, including capacity building for the design and development of CDM projects, preparation of CDM project portfolios, and promotion of project portfolios to attract investors.
Ploutakhina reviewed the baseline guidance document concept, which is based on: the relationship between corporate accounting of emissions and the accounting of project-based emission reductions; the attribution of changes in emissions to emission accounting factors; the correlation of emission accounting factors to project typology; the definition of boundaries; and the identification of baseline methods. Ploutakhina said the methodology helps to isolate emission accounting factors and aims to act as a tool for technical training for project developers.
Michael Klein, 500 PPM, discussed the methodologies set out in the Baseline Guidance document, outlining the project context and the applications. He said the document focuses on the accounting of emission changes, primary emission impacts by project type, selecting a baseline, and calculation of specific (output-based) emission reductions.
In terms of the accounting of emission changes, Klein reviewed the methodologies for defining system boundaries and explaining the occurrence of emission changes. He also summarized the framework to account for project-based emission changes. Regarding baseline selection, he reviewed the step-wise approach for selection of project-specific baselines and the application of the project-specific baseline selection procedure. In this context, Klein reviewed the procedure and case study applications regarding: the identification of possible baseline options; option elimination screening; barrier testing; investment ranking testing; the choice of conservative baseline or definition of baseline shifting parameters; and baseline eligibility period and baseline switching parameters.
In his review of the application of the project-specific baseline selection procedure, Klein elaborated on the steps involved, stating, inter alia, that barrier testing may consider financial, legal, technological, operational, maintenance, supply chain, market structure, and informational elements, and that the investment ranking test is based on the internal return rate in equity or net present value, or long run marginal unit production costs. He also described the final step of calculating output-based emission reductions.
Discussion: Participants raised questions regarding, inter alia, guidelines for acquiring accurate data regarding the barrier test, use of the methodology as a test for additionality, and cooperation with the World Business Council for Sustainable Development.