Programme of Activities (PoA)

Introduction

The programmatic approach was officially established in 2007 by the adoption of guidelines and procedures for Programme of Activities (PoA) by the Clean Development Mechanism Executive Board (CDMEB). Due to high transaction costs small single Clean Development Mechanism (CDM) projects had previously hardly been represented in the CDM portfolio. The PoA approach was designed in order to bring in the possibility for small projects. With the PoA approach the project approval process for many individual activities that are distributed over space and time are brought together.

Definition

A CDM PoA is considered: "a voluntary coordinated action by a private or public entity which coordinates and implements any policy / measure or stated goal (i.e., incentive schemes and voluntary programs), which leads to GHG emission reductions or increase net GHG removals by sinks that are additional to any that would occur in the absence of the PoA, via an unlimited number of CDM program activities (CPAs)".

On the other side, a CPA is more similar to a standard CDM project in the sense that both must comply with procedures and modalities of the CDM and each must include an activity that has a direct, real and measurable impact on emission reductions. By definition, a CPA is: "a single, or set of interrelated measure(s), to reduce GHG emissions or result in net anthropogenic greenhouse gas removals by sinks, applied within a designated area defined in the baseline methodology".

Approach

A CDM PoA occurs at two levels:

• The program level and
• activity level.

Program Level

At the program level, the PoA is the organizational and financial framework that provides structure to the activities, and is managed by a coordinating entity for a period of no longer than 28 years.

Activity Level

At the program activity level, a single measure or a set of measures to reduce greenhouse gases (GHGs) is applied to many plants/ installations of the same type over the life time of the program.

Development

A government or private entity can develop a PoA, which defines broad parameters for project activities (CPAs). Once this PoA has been approved and registered by the CDM Executive Board, individual CPAs can be added without approval by the CDM EB provided they meet the requirements laid out in the registered PoA.

The program is coordinated or managed by one entity, which can be private or public, and does not necessarily achieve the reductions but promotes others to do so. The coordinating entity is responsible for the CERs distribution and communication with the EB.

Advantages

Advantagesof a PoA compared to a set of individual standard CDM projects:

Multiplicity of activities to reduce GHG distributed in time and space	Numerous activities are participating in the program and resulting in GHG emission reduction in multiple sites over lifetime of the program. The sites could be located in one or more countries.
Lower transaction costs	Registration and verification processes for CPAs are greatly streamlined.
Reduced risk of non-registration	Since the time to registration and associated uncertainties are greatly reduced for CPAs compared with standard CDM projects it will become possible to provide pre-payments or other forms of securitization for future CDM revenues.
Duration (PoA and CPA)	The length of the PoA is up to 28 years (60 for afforestation/reforestation projects (A/R)). The crediting period of a CPA is either a maximum of seven years (20 for A/R project acitivities) which may be renewed at most two times, or a maximum of ten years (30 for A/R) with no option for renewal.
Size / Scalability	For Small-scale (SSC) programmatic CDM only the individual CPAs have to be under the SSC threshold, while the overall program can go beyond. This reduces transaction costs and generates economies of scale.
Monitoring and Verification	A combination of several methodologies may be applied within a PoA.
No registration of CPAs	After the registration of the PoA, individual CPAs are not required to request registration. Instead the DOE includes the CPA after a check that the CPA follows the rules for inclusion in the PoA.

Despite these advantages, there is still only a few number of PoAs registered. It took some time until this new CDM instrument became popular and also manageable for the parties involved. However, the pipeline is growing fast with a high demand of PoAs requesting validation at the moment.

Fees

The registration of a PoA is subject to the payment of fees. Yet, the amount of the fees depends on the total expected annual emission reductions of the CPA(s) that will be submitted together with the request for registration of the PoA. For CPAs which are addedd subsequently to validation, no fees incur (so far). The fee structure and regulations are the same as for an individual CDM project.

Technology-Specific Information

Technology-specific information and experiencec on PoA might be found on the following pages:

• Carbon Markets for Photovoltaic (PV) Systems
• Carbon Markets for Small Hydro Power
• Carbon Markets for Biogas Digesters
• Carbon Funding for Cookstoves

Further Information

• KfW PoA Blueprint Book2nd Edition - Excellent overview on PoAs issues for different energy technologies
  
• A Primer on CDM Programme of Activities - A general overview on PoAs
  
• Developing CDM Programmes of Activities: A Guidebook - Southpole Guidebook on PoA, November 2010
  
• UNEP Risoe Centre on Energy, Climate and Sustainable Development (URC) CDM pipeline - including statistics on PoAs