A U.N. scheme designed to cut greenhouse gas emissions and transform the livelihoods of millions of people in developing countries is picking up speed, with dozens of projects being developed or evaluated.

The Kyoto Protocol's Clean Development Mechanism provides for offsets from clean energy projects in developing countries to be sold to governments and companies, such as utilities, that need to meet mandatory emissions targets.

Programmatic CDM aims to dramatically ramp up the CDM's traditional single-project based approach and bring simple emissions reduction technologies to millions of individual households, businesses or villages in poorer countries.

Countries such as India are embracing programmatic CDM as a way to spread cleaner technology to millions of people while helping project developers earn money from carbon credit sales.

Here are some details about programmatic CDM:

HOW DOES IT WORK?

Programmatic CDM, also known as a program of activities or PoA, is a grouping of identical emissions reduction projects, strung together like the links in a chain. Generally, it is a collection of smaller, related CDM projects that share the same methods, or standards, to deploy, monitor and verify them.

Each link is called a CDM program activity (CPA) and each PoA can include several, or even dozens of, CPAs. An entire PoA can run for 28 years and CPAs can be added over time.

Programmatic CDM was created because the traditional single project structure of the CDM is costly and doesn't favor smaller projects that can help the poor get access to clean energy technology.

Once a PoA is formally verified by a U.N.-approved auditor, the idea is that CPAs can be easily and cheaply added.

For example, the world's first approved and registered PoA project, designed to deploy 30 million compact fluorescent bulbs in Mexico, has 30 CPAs, each designed to distribute 1 million bulbs to homes at a time.

WHICH TECHNOLOGIES WORK BEST?

Developers are still working this out since programmatic CDM is still new. But technologies include solar lanterns, more efficient cooking stoves for village homes, biomass gasifiers (using plant waste to generate electricity), solar hot water heaters, solar panels, upgrading regional or even national electricity grids and upgrading citywide street-lighting networks. Switching bus or taxi fleets to cleaner fuels is another possibility.

WHAT ARE THE PROBLEMS?

Project developers are finding that auditing and validation of PoAs is more time-consuming and expensive than they expected. The process of adding CPAs to the parent program of activities might not be as quick and as cheap as initially expected.

The biggest issue is the potentially expensive liability costs the U.N.-approved auditors face for the wrongful inclusion of a CPA into a parent PoA.

Current rules allow a CDM executive board member to seek a review if they feel there is a problem with the addition of a CPA. This can be done within a year of the PoA project being formally registered or six months after carbon credits are issued.
Problems detected after this period mean the auditor is liable for the credits issued for the project, potentially costly for a project than can run 28 years.

(Editing by Clarence Fernandez)

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