National CDM criteria, baseline methodologies and case studies for Uzbekistan

The Clean Development Mechanism of the Kyoto Protocol could create a great chance for developing countries to profit from projects that reduce greenhouse gas emissions and improve the economic and environmental situation in the host country. The project cycle for the CDM differs from a usual investment project due to the need to develop a baseline for the calculation of emission reductions, registration by a national CDM body and monitoring and verification of the emission reduction by an independent entity. Before a project can be registered, its eligibility has to be checked. This means that it has to fulfil the international and national CDM criteria. We suggest national criteria concerning the CDM component, adherence to national policy goals, technological aspects, attractiveness for investor and host enterprise as well as avoidance of negative externalities. A set of sustainable development indicators is proposed for Uzbekistan. We then look at each step of project preparation and concentrate on baseline determination, using small hydropower stations in the Uzbek irrigation system as case studies. Determination of system boundaries, leakage and the lifetime of the projects are assessed. Different benchmarks for the Uzbek electricity sector are calculated. We calculate the economic attractiveness of three hydro power stations to determine whether the investment is really additional, using different discount rates and electricity price scenarios. In all scenarios we find positive costs, making the projects additional.