Why don't I get a guaranteed amount of CERs?
There are a number of uncertainties that cannot be designed out of a CDM project. In the very worst case, the project might receive no CERs at all. At carbonpositive, we make every effort to ensure the expected number of CERs is delivered, but we will not be able to influence all factors.
Here is a table describing the major risks to our delivery of CERs, what we do to reduce the risks, and why we believe the overall risks are manageable:
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Risk
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Comment
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CERs have a low value because negotiations fail on subsequent commitment periods.
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It is generally accepted that achieving the targets in the first
commitment period will not be enough to prevent climate change, and
that further efforts will be necessary in subsequent commitment
periods.
Negotiations on the second commitment period are expected over 2006-09 after the 2005 Montreal UNFCCC meeting showed political will for a new agreement to be reached.
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Project is not validated or registered under the CDM.
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If a project is to receive CERs, the project plans must first be
"validated" by a designated third party company, and then "registered"
by the CDM Executive Board.
To date very few projects have been registered, so
no-one has a strong track record in successful registration. However,
carbonpositive is building expertise in this area and will use service providers recognised as having expert knowledge and experience in the validation and registration process.
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Project does not generate the expected emission reductions. |
The service providers we select for each project are all experts in
their field. They are best qualified to make emission reduction
estimates and to execute the project so that it delivers against those
estimates.
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| Project fails
due to geopolitical instability. Non-industrialised countries are often less
politically stable than industrialised countries, and projects can be
at risk under a changing political environment. |
The CDM recognises this risk, so the CDM requires that:
- Host country approval is needed for validation and registration; and
- In addition to delivering emission reductions, projects must be beneficial to the host country. This builds local goodwill towards projects
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Also in this section:What do I get as a carbonpositive customer?
More: Latest CER market outlook CERs explained