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Clean Development MechanismImplementation by the NetherlandsLex de JongeMinistry of Housing, SpatialPlanning and the Environment(VROM)

Netherlands’ interest in CDM• Dutch Kyoto target: reduce 200 Mton CO2• 50% international (= 100 Mton CO2):– Clean Development Mechanism (CDM)– Joint Implementation (annex 1 countries)• Government finances CDM and JI•2 Objectives CDM:– Contribute to sustainable development– Purchase CO2 at reasonable price andacceptable risk

4 tracks for implementing CDM1. International multilateral financialinstitutions: IFC, World Bank, IDB, ADB,CAF and other development banks2. Procurement tender by Dutch agencySenter: CERUPT (closed 31 January 2002)3. Private financial institutions (underdiscussion)4. Bilateral between countries (underconsideration)

Balancing interests / reducing risks• Apply Marrakech (CoP7) rules andprocedures• Most policy risks are on VROM• Dutch CDM financing is additional to ODA• PricebetweenUS$2andUS$5/tonCO2CO2,depending on level of sustainability• Guaranteed payment, on delivery• Criteria for reliable project financing• Dtildif Detailed information www.cdminfo.nl

Commitment of all parties• National Focal Points for CDM (obligatory)• Documents:– Letter of No Objection (LoNO)Host Country Intermediary– Letter of Endorsement (LoE)Host Country Project Sponsor– Memorandum of Understanding (MoU)Host Country Netherlands– Letter of Approval (LoA), obligatoryHost Country all parties involved– Declaration of fApproval l(DoA), obligatoryNetherlands Host Country

Capacity Building• Budgets and responsibilities of VROM andDevelopment Cooperation are separated• VROM budget: purchase CO2 credits andinevitable project related preparation costs(= Project Related Capacity Building)• No separate activity (unless no CDM interest)• Development Cooperation: Institutional CapacityBuilding• Coordination i Development Cooperation - VROM,but no obligations to sell CDM credits exclusivelyto VROM