Interpreting the Additionality of CDM Projects: Changes in Additionality Definitions and Regulatory Practices over Time

Abstract The concept of the ‘additionality’ of the emission reduction achieved by a Clean Development Mechanism (CDM) project lies at the heart of the CDM rules. The essential idea underlying the concept of additionality is that the emissions reductions of a CDM project would not have happened under ‘business-as-usual’. This chapter considers how the concept of additionality has evolved over time both in its theoretical definition and its actual implementation regarding registration of CDM projects. It starts with a discussion of the inability of the negotiators of the Kyoto Protocol and the Marrakech Accords to agree on an operational definition of additionality. The unexpected effort of the CDM Executive Board to introduce principles of additionality testing and the development of the consolidated additionality tool are discussed in section 3. Recent developments that allow the use of benchmarks and default discount factors to take into account non-additional projects, instead of using the additionality tool, are assessed in section 4. Section 5 describes how projects have been reviewed and rejected over time, with the CDM Executive Board (EB) developing ‘fashions’ of rejecting certain project types without prior warning. The fate of cement blending and waste heat recovery projects is assessed in detail. Given this situation, several proposals for reform of additionality testing have been made, which are dealt with in section 6. Section 7 discusses what would happen if additionality testing was scrapped. Section 8 summarizes the lessons of five years of additionality determination of CDM projects.