Glossary

ADDITIONALITY
Additionality is a principal condition for the eligibility of a project under the CDM.
Additionality is the requirement that the greenhouse gas emissions after implementation of a CDM project activity are lower than those that would have occurred in its absence.
Additionality is a requirement for validation, and will be confirmed by the Designated Operational Entity (DOE) as part of the Validation report.

ANNEX 1
Annex I to the United Nations Framework Convention on Climate Change (UNFCCC) sets out a list of developed country Parties and economies-in-transition Parties that commit themselves under Article 4 to achieve certain quantified emission limitation and reduction objectives.  If they have ratified the Kyoto Protocol, these Parties can authorise the participation of entities in CDM projects, but are not eligible to be host Parties.
The countries are: Australia, Austria, Belarus, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, European Economic Community, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Monaco, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom of Great Britain and Northern Ireland, United States of America

BASELINE
A baseline for a CDM project activity is a hypothetical reference case, representing the volume of greenhouse gases that would have been emitted if the project were not implemented.  Therefore, the baseline can be used to determine whether a CDM project activity is additional, and to calculate the volume of additional greenhouse gas emission reductions achieved by a project activity.

BIOMASS
Biomass means non-fossilized and biodegradable organic material originating from plants, animals and micro-organisms. This also include products, by-products, residues and waste from agriculture, forestry and related industries as well as the non-fossilized and biodegradable organic fractions of industrial and municipal wastes. Biomass also includes gases and liquids recovered from the decomposition of non-fossilized and biodegradable organic material.

BUNDLING
Bundling is the bringing together of several small-scale CDM project activities, to form a single CDM project activity or portfolio without the loss of distinctive characteristics of each project activity.
The advantage of bundling is that bundled projects can obtain a single validation report and a single certification report for the entire bundle, which streamlines these processes for project participants.

CDM REGISTRY
The CDM Registry is an electronic database managed by the secretariat, into which CERs are issued and from which CERs are forwarded, transferred and cancelled.

CERTIFICATION
Certification is the formal written confirmation by an independent auditor (DOE) that the emission reductions which are set out in the verification report were actually achieved.

CER
Certified Emission Reduction (CERs) are the tradable units of the CDM.
A “certified emission reduction” or “CER” is a unit representing one tonne of carbon dioxide-equivalent (CO2-e) that has been sequestered or abated.
CERs can be used by Annex I Parties to meet their emissions targets, and can be added to a Party’s overall quantified emission limitation and reduction commitment.

CDM
The Clean Development Mechanism (CDM) is one of the three mechanisms contained in the Kyoto Protocol. It allows entities from Annex I (developed) Parties to develop emission-reducing projects in non-Annex I (developing) countries, and generate tradable credits corresponding to the volume of emission reductions achieved by that project.

CREDITING PERIOD
The crediting period for a CDM project activity is the period for which reductions from the baseline are verified and certified by a designated operational entity for the purpose of issuance of CERs. Therefore, the crediting period is the duration of time selected by the project participants during which the CDM project activity will be implemented and greenhouse gas emission reductions (and consequently certified emission reductions (CERs)) will be generated.

DNA
Designated National Authority
The designated national authority (DNA) is the body granted responsibility by a Party to authorise and approve participation in CDM projects. Establishment of a DNA is one of the requirements for participation by a Party in the CDM. The role of the DNA is to provide the letter of approval to project participants in CDM projects. In the case of the host Party DNA, this letter of approval must confirm that the project activity contributes to sustainable development in the country.

DOE
Often referred to as ‘Validators’, Designated operational entities (DOEs) are independent auditors that assess whether a potential project meets all the eligibility requirements of the CDM (validation) and whether the project has achieved greenhouse gas emission reductions (verification and certification). They are accredited by the CDM Executive Board and designated by the COP/MOP to perform these functions, according to their expertise.

ERPA
Emission Reduction Purchase Agreements (ERPAs) are the contracts that specify the terms between parties for  the sale and purchase of CERs from CDM projects.

EXECUTIVE BOARD
The  Kyoto Protocol established an Executive Board to supervise the CDM.
The functions of the Executive Board include; approving new baseline and monitoring methodologies,
overseeing the accreditation of operational entities, maintaining a database of approved rules, procedures and methodologies and maintaining the CDM registry

HOST PARTY
The general eligibility requirements for participation in CDM projects are that the host country is a Party to the Kyoto Protocol, it is participating voluntarily in the project activity and that it has established a Designated National Authority for the CDM.

ISSUANCE
Issuance refers to the creation of certified emission reductions (CERs) equivalent to the number of greenhouse gas emission reductions which have been generated, verified and certified in respect of a CDM project activity. CERs are issued by the CDM registry administrator on behalf of the Executive Board.

LEAKAGE
Leakage refers to the increase in emissions outside the project boundary that occurs as a consequence of the project activity’s implementation.
Leakage emissions must be deducted from the emission reductions generated by the project activity, and certified emission reductions (CERs) are only issued in respect of the net reduction in emissions brought about by the project, once leakage had been taken into account.

LETTER OF APPROVAL
Letter of approval is the authorisation from that country for the participation of a project participant in the proposed project activity. Obtaining a letter of approval is a requirement for registration of a project activity under the CDM:
The Designated Operational Entity (DOE) must receive documentation of the approval from project participants and, if it determines the project activity to be valid, submit the written approval to the Executive Board together with the request for registration

METHODOLOGIES
There are two types of methodologies in the CDM; Baseline Methodologies and Monitoring Methodologies. Baseline methodologies are the means to estimate the emissions that would have been created in the most plausible alternative scenario to the implementation of the project activity (called the baseline scenario).
Monitoring methodologies are the means to calculate the actual emissions reductions from the project, taking into account any emissions from sources within the project boundary. A monitoring methodology sets out how project proponents should develop and implement a monitoring plan for a particular project type, in order to gather the data required to calculate emission reductions from the project.
Both the baseline methodology and the monitoring methodology must be specified in the Project Design Document (PDD).

MONITORING
Monitoring refers to the measurement and analysis of greenhouse gas emissions from a project within its boundary to determine the volume of emission reductions that are attributable to the project.
Monitoring is implemented through the monitoring plan, which is included as part of the Project Design Document (PDD) submitted for Registration.

PDD
The Project Design Document (PDD) is the key document involved in the validation and registration of a CDM project activity. It is one of the three documents required for a CDM project to be registered, along with the validation report from the designated operational entity (DOE) and the letter of approval from the designated national authority (DNA).
The PDD is reviewed by the DOE during the validation process to ensure that a project meets the requirements for validation. The PDD is also used as the basis of consultation with stakeholders, which is conducted by making the PDD and related documentation publicly available on the UNFCCC website.
The project design document is then included in the request for registration which is submitted by the DOE to the Executive Board.

REGISTRATION
Registration is a key stage in the CDM project cycle, representing the point where a project activity is accepted as a CDM project, making it eligible to generate certified emission reductions (CERs).

STAKEHOLDERS
Stakeholders are the public, including individuals, groups or communities affected, or likely to be affected, by the proposed clean development mechanism project activity. Stakeholders must be consulted with during the planning of a CDM project activity.

VALIDATION
Validation is the process of determining that the project is eligible to be registered as a CDM project, by confirming that the project meets the requirements of the CDM.
The process is outsourced to private entities (known as designated operational entities (DOEs), or ‘validators’).

VALIDATION REPORT
The validation report is a summary of the validation findings of the designated operational entity (DOE). It sets out whether, in the opinion of the DOE, the project is eligible to be registered as a CDM project.

VERIFICATION
Verification is the process of confirming the authenticity of reductions in greenhouse gas emissions by a CDM project over a defined period of time (a verification period). In order to do this, a CDM project’s emission reductions are monitored and the monitoring data for a verification period is reviewed and assessed.

VERIFICATION REPORT
The verification report forms the basis for certification of the project’s emission reductions or removals, which is required for issuance of certified emission reductions (CERs). The verification report must ensure the project activity has been correctly implemented, monitoring systems have been complied with and all data is verifiable and stored appropriately. The verification assessment must also involve a review of the relevant project documentation and include an on-site visit.