Suggested Model for Implementing the Clean Development Mechanism

This paper presents a proposal for a major collaborative effort by the United States and China to reduce CO2 emissions in the Chinese electric power sector within the framework of the recent Kyoto Protocol (KP) to the United Nations Framework Convention on Climate Change (FCCC). The proposal is conceived as a possible approach to implementing the Clean Development Mechanism (CDM) established by Article 12 of the Protocol. The CDM is a new and untested mechanism for encouraging cooperative multinational efforts to reduce atmospheric levels of greenhouse gases. To prompt further discussion and refinement of the CDM, and to encourage the United States and other developed countries to begin investment in clean development projects, this paper proposes a model for initial implementation of the CDM. The proposed implementation strategy is designed to produce:

• large emission reductions in the relatively near term;
  significant transfers of technology and financial resources from developed to developing countries; and
  increased understanding of the CDM''s potential benefits and possible problems.
  We use a notional U.S.-China project to illustrate the practical steps necessary for successful operation of the CDM. The proposal focuses on the Chinese electric power sector because it is growing rapidly and affords ample opportunities for technological improvements that would reduce greenhouse gas emissions. At the same time, measuring CO2 emissions from central station power generation facilities is comparatively straightforward, so monitoring and verification problems are minimized.