LEGAL ISSUES FOR HOST COUNTRY CONSIDERATION CDM Workshop Kampala, June 6 to 8, 2001.
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Transcript of LEGAL ISSUES FOR HOST COUNTRY CONSIDERATION CDM Workshop Kampala, June 6 to 8, 2001.
LEGAL ISSUES FOR HOST COUNTRY
CONSIDERATION
CDM Workshop
Kampala, June 6 to 8, 2001
Basic Approach
Emission Reductions
(Host Country + Project Entity)
Payments (PCF)
CDM Projects – Art. 12 KP12 (2) The purpose of the clean development mechanism shall be to assist developing countries•In achieving sustainable development•In contributing
– to the ultimate objective to the UNFCCC– to assists developed countries in achieving compliance
with their quantified emission reduction commitments.
12 (9) Participation under the clean development mechanism, including in activities resulting in certified emission reductions and in the acquisition of certified emission reductions may involve private and/or public entities.
World Bank /PCF
UNFCCC rules
Host government (transferring
country)
Project entity
PCF : Actors involvedPCF : Actors involved
Annex 1 Government (acquiring country) –
PCF Participants (Gov. + Priv.)
PCF Governance Structure• World Bank
– Fund Management Unit– Fund Management Committee
• Participants– Participants’ Meeting– Participants’ Committee
• Hosts– Host Country Committee
Host Country Role– Host Country Committee
• Composed of those countries either signing a letter of endorsement for a PCF project or a Memorandum of Understanding
• Provide advice and strategic guidance to the Fund Management
• Annual meetings, prior to Participants’ Meeting to provide effective input
– Observer status in Participants committee and Participants’ meetings
16
Project Endorsement Letter Host Country endorses further development of
the project for the purposes of the UNFCCC/KP
Host Country:
• Signals Commitment to render aid and assistance (e.g. registration of the ERs in any international or national regulatory regime)
• Approves projects for KP purposes
• Allows access to information
PCF KEY LEGAL AGREEMENTS
• Letter of Endorsement
• Host Country Agreement
• Emission Reductions Purchase Agreement
Host Country
PCF Trustee
Project Entity
1. Letter of Project Endorsement
3. National Legislative Framework / Agreement / Authorization
2. Host Country Agreement
2. Emission Reductions Purchase Agreement
Legal Agreements for PCF Projects
Host Country
PCF Trustee
Project Entity1. Letter of
Project Endorsement
2. Host Country Agreement and Emission Reductions Purchase Agreement
Legal Agreements for PCF Projects
Host Country Agreement
PCF Trustee Host Country
Obligation to buy ERs
Obligation to transfer ERs
Main Elements of Host Country Agreement (HCA)
PCF commits to
– buy ERs
Host Country commits to
– authorize the transfer of ERs by the Project Entity to the PCF
or
– transfer ERs to the PCF
Emission Reductions Purchase Agreement
PCF Trustee Project Entity
Purchase Price (net of costs)
Exclusive Right of Certification and Verification of purchased ERs (ERs)
Transfer of ERs
Main Elements of Emission Reductions Purchase Agreement
(ERPA)
• Purchase of ERs from the Project Entity / Payment for achieving ERs
• PCF commits to arrange for initial and periodical verification, validation and certification.
• Transfer of ERs