Ministry of Agriculture, Livestock and Food Supply - Embrapa

Characteristics of the CDM
In order to be approved, a project must fulfill the additionality requisite,
which assumes, among other factors, that the project has not been selected
only because it was the most economically feasible alternative, but that it
requires other investments, such as purchasing carbon credits, in order to be
viable. Since the emphasis of the CDM is based on sustainable development
premises, the more economically attractive actions, by themselves, do not
require supplementary contributions (such as carbon credits) most of the
time and occur naturally on account of the rules of the market or the private
interests of the candidates. Very often the projects preferred showed that
they would only be feasible if they received resources from the CDM.
In addition to the significant net emission avoidance there are other
requirements for the project to be considered "additional", namely, a preliminary
classification referring to the initial date of operations; the identification of
alternatives consistent with the effective legislation and local regulations;
analyses of investments, obstacles, common practices; and an analysis of
the impact of registration as a CDM project.
In the case of Brazil and from the point of view of sustainable
development, Resolution nº 1 of the Interministerial Commission on Climate
Change determines that the projects submitted bring about substantial
environmental and social benefits and generate income and jobs.
The development, monitoring and verification methodology must be have
been previously evaluated, approved and registered by the CDM Executive
Committee. The purpose of this prior processing is to guarantee that the
projects are developed following a given methodology, which was previously
recognized by the UN Methodology Panel.
On the basis of trend scenarios, the project must show that the entire
reality would change if the project were not implemented, which is also called
the "base line". In other words, this means that in order to evaluate the
contribution that could be brought about by the implementation of a given
project it is necessary to establish what would be the situation throughout the
years in the absence of said project. One of the main difficulties is the lack of
research to provide technical input for said base lines and to assist in obtaining
approval of the methodologies required to develop the project.
Another major limitation is the transaction cost of the project, whose
minimum value is approximately US$ 150,000. With a view to enabling access to
low-income candidates, or even encouraging projects of lower CER (Certified
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