Introducing Materiality into the CDM Process
Cop 17 in Durban gave rise to a major development for the Clean Development Mechanism (CDM) -- the decision that the Executive Board must implement the concept of 'materiality' under the CDM.
Cop 17 in Durban gave rise to a major development for the Clean Development Mechanism (CDM) -- the decision that the Executive Board must implement the concept of 'materiality' under the CDM. And to achieve this, that Designated Operational Entities (DOEs) must apply a reasonable level of assurance in their verification activities.
This is a development that is warmly welcomed by project developers and DOEs because materiality and mandatory assurance levels have been present in other regulated schemes around the world for many years, but the UNFCCC's market mechanisms have been slow to recognise these concepts thus far. And it will mean that the MRV of CDM projects is a far more efficient, effective and reasonable process.
The Executive Board has already been consulting on how to include materiality and reasonable assurance into the process and the DOE’s through the DIA have been actively participating, providing draft text to amend the Validation and Verification Standard (VVS) and examples of how materiality could be applied in a CDM context.
To introduce these concepts will take time and a calibration of understandings across parties but we hope to see it formally bottomed out and introduced well before the end of this calendar year.
Madlen King, Global Head of Climate Change & Sustainability Lloyd’s Register Quality Assurance (LRQA)