• CDM Secretariat with the assistance of Panel of Experts and in consultation with the relevant line ministry will evaluate the PCN and shall inform the project proponent (within fifteen days) to prepare the draft PDD as per the prescribed format of the CDM Executive Board or inform the party to revise the PCN as per the recommendation of CDM Clearing House/ Secretariat.
  
• During the evaluation of PCN, CDM Clearing House/ Secretariat shall check whether the proposed project is in conformity with the policies of the relevant line ministry and meets the sustainable development criteria for CDM projects as determined by the National CDM Committee. The Secretariat however shall not have the power to reject a project. If a project proponent is not satisfied by the decisions of the Secretariat, the PCN shall be forwarded to the Committee for evaluation
  
• Once the draft PDD is submitted to the CDM Clearing House/ Secretariat, it shall be evaluated in the same manner as the PCN and a briefing note prepared. For approval, the Secretariat shall prepare all necessary documents and send the project file to the National CDM Committee. Special attention will be given to stakeholders meeting and EIA reports.
  
• The Secretariat shall ensure that the entire process between receiving the draft PDD and CDM Committee review does not take more than 30 days.
  
• Once the PDD is approved by the Committee and endorsed by the Board, the project proponent has to pay to the CDM Secretariat/ Clearing House the necessary fee as fixed by the Board.

Proposed CDM Project Approval Process

Simplified Methodology for Evaluating Sustainable Development Criteria of CDM Projects

In evaluating the Sustainable Development content of projects, it is important to remain focused and not get lost in the maze of the evaluation criteria. The methodology to be applied to evaluate the SD content of CDM projects is depicted in Figure 1. It is suggested that if a project meets with Government plans and policies, it should be treated as a special category and a simple approval process employed. Projects developed by government agencies or under Government sponsorship shall automatically be considered in this category. ALL CDM PROJECTS must pass through the first two screening process of the decision tree of Figure 1. The evaluation process for projects submitted to the DNA should follow the logical sequence shown in Figure 1. The logical steps in the decision tree of Figure 1 are explained below.

1. The first screening of projects is intended to ascertain the environmental integrity of the project. The DNA with full assistance from the Department of Environment (DoE) shall evaluate the project by asking the following two questions – (i) Does it add to the existing stress on major environmental problems in the country? (ii) Does it violate any environmental rules and regulations of the country? The PROJECT SHALL BE REJECTED if the answer to either one of the questions is YES. To accomplish the first task a list of serious environmental problems of the country will need to be compiled.
   
2. If the project survives Step 1, the second screening would be to see if the project violates any development plans of the country. For this a list may be prepared, but more importantly, the relevant line ministry/agency of the Government must accept the project. This step ensures that projects, which violate Government polices and development plans, do not get approval even if those are excellent in reducing GHG emissions
   
3. If the project survives Step 2, then it can at least be stated that the given project is environmentally benign and does not violate the host country’s broad development objectives. However, it says nothing about how good the project is in terms of SD. This step is intended to tackle that. It is suggested that if the project addresses STRONGLY any one environmental or economic/social goals of the country, the project can be accepted. It must be reiterated that the impact of the project must be SIGNIFICANT. All Government and Government sponsored projects shall be deemed to have STRONG country focus, and therefore, shall be approved. Being government projects, it is expected that these have been formulated and developed with extensive consultation with the DNA. It must however be emphasized, that even these projects must cross Step 1 and Step 2 before being accepted
   
4. For private sector projects, where clear and strong SD benefits cannot be identified, an appropriate set of SD criteria shall be used to evaluate projects that have not qualified in Step 3

Projects that cannot be accepted using the simplified screening procedure as detailed above must be evaluated using a procedure, which is able to consider both the negative and positive impacts. This can only be achieved in a reliable, clear and transparent manner by using good sustainable development criteria. It is proposed that SD criteria having the following three pillars be employed to evaluate projects.

1. Economic
2. Social
3. Environmental and Technological

Under each pillar, there exist several indicators. The criteria use pair-wise comparison to first establish the relative importance between the three pillars. After that, a second pair-wise comparison between the indicators under each pillar is performed to establish the relative importance between the indicators. In the third step, the impacts of all the indicators are graded in a scale of –2 to +2. And finally, a composite score for the projects is computed from the data in step 2 and 3.

Decision Tree for Evaluating CDM Projects