Verification from PPs perspective

1. Verification from PPs perspective Round table on A/R CDM projects Carbon Finance Unit – World Bank August 24&25, 2009 Walter Oyhantçabal A/R WG

2. What should be very clear to PPs? What they have to do before every verification. What DOEs will check. What are the challenges and implications How to meet the requirements

3. First: definition of verification/certification (M&P) (31) Periodic independent review and ex post determination by the DOE of the NAGHG R by S, since the start of the project. Certification = written assurance by a DOE that an A/R project activity under the CDM achieved the NAGHG R by S => CERs • (32). Initial verification and certification may be undertaken at a time selected by the PPs. Thereafter: every five years until the end of the crediting period.

4. What do PPs have to do during the crediting period and before every verification?

5. According to M&P PPs • 27. “PPs shall implement the monitoring plan contained in the registered PDD”. • 28. Revisions, if any, to the monitoring plan to improve the accuracy and/or completeness of information shall be justified by PPs and shall be submitted for validation to a DOE. • 29. Implementation of the registered monitoring plan and its revisions, as applicable, shall be a condition for verification, certification and the issuance of tCERs or lCERs. • 30. PPs shall provide to the DOE a monitoring reportin accordance with the registered monitoring plan

6. What is meant by “implementing the Monitoring Plan? (para. 25) • (a) Collect and archive all relevant data necessary for estimating or measuring the ANGHG R by S during the CP. • (b) Collect and archive all relevant data necessary for determining the BL NGHG R by S during the CP. • (c) Identifyall potential sources of leakage, and collect and archivedata on leakage during the crediting period;

7. (d) Collect and archive information =>planned monitoring and remedial measures =>negative socio-economic or environmental impacts; (e) Collect transparent and verifiable information to demonstrate that selection of C pools does not increase the NAGHG R by S; (f) Changes in circumstances within the project boundary that affect legal title to the land or rights of access to the carbon pools; (g) QA and control procedures for the monitoring process; (h) Procedures for the periodic calculation of the NAGHG R by S and documentation of all steps involved, and for the periodic review of implementation of activities and measures to minimize LK.

8. What DOEs will check at verification?

9. Key issues DOEs verify • 1. Project implementation in accordance with PDD • 2. Compliance of the monitoring plan with the monitoring methodology. • 3. Compliance of monitoring with the monitoring plan. • 4. Assessment of data and calculation (BL, ANGHG, Lk, etc.) • Logic is: Requirement to be validated => Means of verification => Verification

10. What are the implications?

11. Implications • Rules of the game = >Making a project to mitigate climate change requires adoption of protocols that ensure environmental integrity > CDM have trade/offs that should be clear from the beginning. • Independent verification is needed. • Validation of changes to the PDD during the CP is not easy, costly and time consuming. • Any major change to the PDD due to market conditions may face the need to abandon it and go to a BAU scenario. • Best possible PDD design is advisable. • Changes in management plan could affect additionality.

12. What are the requirements for PPs to get CERs certified?

13. Requierements • Organization to undertake the tasks related to monitoring (Monitoring Unit: people encharged and reponsible, infrastructure to process and archive data, including new technical capacities). • Special and NEW capacities have to be created and this may need institutional and finantial support by development (national or international) agencies. • Capacities (human, technical and logistic) to: • collect information on many variables • process it and • properly archive it. • Finantial capacity to cover costs of monitoring before receiving the income from the CERs may be a problem. (e.g. cost of the monitoring unit, laboratory costs, etc.)

14. Some conclusions

15. 1. As CERs are issued only after verification and certification by a DOE => No verification/certification = no CERs. • 2. The essential role of the DOE is to check that the monitoring plan in the PDD has been appropriately implemented. => PPs have to follow strictly the PDD in order not to have troubles during verification. Little room for deviations. • 3. Monitoring = collecting and archiving following a validated Monitoring Methodology.

16. 4. Capacities have to be put in place. This is a particular challenge and opportunity for (many) small landowners projects. • 5. If PPs need to modify the monitoring plan they have to validate the changes before the verification. And they have to justify. • 6. Verification, as national inventories review under UNFCCC, may adopt a TACCC approach => has to be well done, but a “continuous improving” scheme could be adopted to permit the learning by doing process by PPs.

17. Sources: • 1. M&P • 2. CMN Validation and Verification Manual (EB44 Annex 3)

18. Thank you!!

19. Monitoring Plan WB: “The design of A/R projects is likely to at the time of project start date due to the variables associated with land tenure, control, species choice, survival and unforeseen events such as fire etc., the monitoring plan needs to adapt to ex post requirements of the project. As a consequence, there could be deviation from the project details presented in the PDD. As per the current procedure, any changes to project implementation require revisions of monitoring plan, which needs to be approved by the EB. In case of A/R projects, verification of a project is anticipated by year 5. It is not possible to revise the monitoring plan in anticipation of the verification as DOE may raise additional queries at the verification. • Suggestion: There needs to be a simplified procedure for updating and revising a monitoring plan within a short period of time to avoid delays in finalizing the verification report and issuance of credits”.

20. Definition of project boundary • WB: “Definition of project boundary has been a major issue for most A/R projects implemented on community lands and small farm holdings. As decision to enroll the land in the project are contingent on factors that influence land owner and community decisions. Therefore, it is difficult for a project entity to demonstrate control over the area until the time of planting, especially considering the delays in project implementation and regulatory processes. • Suggestion: The rules on project boundary should be made further flexible and allow for the inclusion and exclusion of eligible new areas until first verification”.

21. Example: ACM0001 • 2. Sampling design and stratification • Stratification of the project area into relatively homogeneous units can either increase the measuring precision without increasing the cost unduly, or reduce the cost without reducing measuring precision because of the lower variance within each homogeneous unit. Project participants should present in the AR-CDM-PDD an ex ante stratification of the project area or justify the lack of it. The number and boundaries of the strata defined ex ante may change during the crediting period (ex post). • 2.1 Updating of strata • The ex post stratification shall be updated due to the following reasons: • • Unexpected disturbances occurring during the crediting period (e.g. due to fire, pests or disease outbreaks), affecting differently various parts of an originally homogeneous stratum; • • Forest management activities (cleaning, planting, thinning, harvesting, coppicing, re-replanting)may be implemented in a way that affects the existing stratification.