SouthSouthNorth CDM Toolkit

Introducing SouthSouthNorth and our approach to projects

The SouthSouthNorth experience of learning to develop CDM projects

In 1999, the rules for CDM had not been decided yet. The Kyoto Protocol gave only a vague outline of the structure of these projects in Article 12. One basic point had been decided, however, being that countries where projects occur, so-called ‘host’ countries, would themselves be the judge of whether projects contribute to their sustainable development – a key element for all CDM projects. But how to evaluate such a contribution was left an open question. In response to this vacuum, our Technical Co-ordinators, Steve Thorne and Emilio La Rovere presented a paper at the fifth Conference of the Parties of the United Nations Convention on Climate Change that described a set of criteria and indicators for assessing future CDM projects, not only for their contribution to sustainable development, but for their feasibility and eligibility in general. This included what they called the “Matrix Tool” for appraising and evaluating the contribution that projects would make to sustainable development, a subject which will be discussed in considerable detail in Modules 19, 34, 52 and 58.
The Matrix Tool was not based on actual CDM project experience. SouthSouthNorth was thus conceived to find and design CDM projects that would use and test the Matrix Tool. Actual implementation would determine whether the Matrix Tool required refining.

SouthSouthNorth was the brainchild of:

Steve Thorne, a consultant engineer operating in South Africa for Energy Transformations CC. His interests ranged across issues such as housing problems, energy solutions, in particular, and developmental problems and inequity in general.
Emilio La Rovere, with a background in systems engineering and economics, professor of the energy planning programme of the Institute for Research and Postgraduate Studies of Engineering at the Federal University of Rio de Janeiro (UFRJ/COPPE).
Hélène Connor-Lajambe, head of Sustainable Energy Watch (SEW) and director of HELIO International
Paul Hassing, from the Department of Foreign Affairs of the government of The Netherlands.
Stefan Raubenheimer, a lawyer from South Africa, with an interest in mediation, equity and facilitation services.

On behalf of the government of The Netherlands, Paul agreed to fund a new organization made up of Steve and Stef from South Africa, Emilio from Brazil, and with Hélène agreeing to manage the monitoring of the organization’s activities. Stef agreed to be the CEO of the new organization. This group decided to include two more individuals who had distinguished themselves in the field of sustainable developmental work:

Agus Sari has an advanced degree from the University of California at Berkeley. He is the Executive Director of Pelangi, an Indonesian NGO that serves the interests of sustainable development.
Atiq Rahman heads the Bangladesh Centre for Advanced Studies (BCAS). He is a lead negotiator in the international climate change regime with interests in the environment and in development.

Each member of the above group would form a team to manage the activities of the new organization, which was to be called SouthSouthNorth. CDM projects were to be developed in Brazil, South Africa, Indonesia and Bangladesh.

Why the name SouthSouthNorth?

In the world of climate negotiations, the terms ‘North’ and ‘South’ are used as shorthand for the developed countries mostly situated in the northern hemisphere and so-called developing countries mostly situated in the southern, respectively. SouthSouthNorth would find and develop CDM projects in Brazil, South Africa, Indonesia and Bangladesh – all countries of the South. The goal of SouthSouthNorth was to create links that would build capacity and expertise in order to facilitate the development of CDM project activities from the South. CDM projects are supposed to help Southern countries to develop in a sustainable way, but they also help countries in the North meet their obligations to reduce greenhouse gas emissions. Thus the name SouthSouthNorth was borne out of the need to help Southern countries benefit from sustainable development and from the CDM, and from the opportunity for Southern countries to assist Northern countries to reduce greenhouse gas emissions through the development of Southern-based CDM projects.

Our partners

Our project developer partners were crucial to the SouthSouthNorth experiment: they agreed to dispense with confidentiality, and to expose their project to public scrutiny and as a learning tool: it is to them that this Toolkit is truly dedicated.

What SouthSouthNorth set out to do

SouthSouthNorth was born within a vacuum. No CDM projects existed yet. This vacuum included the absence of CDM rules for projects, an absence of skills to develop CDM projects, an absence of local and international institutions to approve and administer these projects, and an absence of any market where these projects could find investors and purchasers. SouthSouthNorth would thus be learning while doing, as the expression goes.
We took on the goals of finding partners and developing projects with them, testing the project ideas for sustainable development and feasibility, submitting them to local institutions, thereby building institutional capacity, and most importantly, to publish our experiences in the form of this Toolkit to help you find and develop your own projects.
One of our experiences was that there is a huge attrition rate between conceiving a CDM project idea and taking it to completion. Out of the many potential project ideas we considered (over 50), the best 17 were selected to proceed. Of these, barely eight are projected to succeed within the required time-frame. There are various reasons for this, which will become evident throughout this Toolkit. This Toolkit, building on our lessons learned, should help you to reduce the rate of attrition among your projects and improve the project lifecycle because the process is now better defined and tested by SSN. We will alert you to many pitfalls and guide you through the processes and activities in order to succeed with your projects.
In summary, SouthSouthNorth set out to achieve the following goals within three years:

To find at least two pilot CDM projects in each of the countries where SouthSouthNorth operates and to facilitate their development up to the point where they are ‘transacted’ with Northern partners.
To ‘learn-by-doing’ CDM projects through a hands-on approach to our pilot projects. This process includes building the capacity of all involved, including SouthSouthNorth team members themselves, the owners and employees of all the pilot projects involved, all other professionals and advisors who are consulted, all stakeholders who are affected by the projects, and all government officials who play a role in the approval of the projects.
To support and train the relevant government departments who function as the appropriate approving authority of CDM projects in the developing countries concerned.
To publicise and disseminate all our experiences of this hands-on learning process for the purposes of capacity building. This is one of the goals of this Toolkit. Our other publications are: The SouthSouthNorth Development Facilitation Training Course Manual for CDM Projects (Cape Town: SouthSouthNorth), our website, www.southsouthnorth.org and Climate Change and the CDM: SouthSouthNorth: Stories from the Developing World (Orford, M., S. Raubenheimer and B. Kantor. 2004. Cape Town: Double Story).

Approaching projects without experience

SouthSouthNorth began with one important tool – the “Matrix Tool” for appraising the projects, mentioned above. Working with just the “Matrix Tool” and a set of values we were able to develop many screens and further tools for processing a wide variety of project ideas. We, in the first place, were motivated by sustainable development, and further by the prospect that the CDM could be used to direct flows of capital towards project owners in the South. From this as starting point have emerged our basic three values:

a high return for developers in the South; and
a stringent approach to environmental integrity;
a high contribution towards sustainable development of Southern countries.

We thus approached one of our goals, that of building capacity, from a uniquely Southern perspective. While other efforts were underway to build capacity within the CDM vacuum, this was all being done by agencies from the North. As Southerners, we wanted to build capacity and support developers in the South as well as to encourage the sustainable development of the South. At first no-one else was doing this kind of work so we were learning by doing in the strict sense of that expression. It meant getting closely involved with projects and learning both from our successes and our mistakes.
Our values disallow us from pursuing projects simply because they offer easy pickings – the so-called ‘low-hanging fruit’. Our projects thus all involve a high degree of both sustainable development and capacity building. We have been involved in institution building at local as well as at national level, incidental to our development of projects but also directly through assistance with the rules and methodology required for processing projects.

SouthSouthNorth methodology

Proceeding from our values, we have been able to develop a series of screens and tools that are generic for CDM project development. We have always approached these tools through the process of iteration, or repetition, so as to continually refine both the projects and the tools themselves. This process of bottom-up tools generation and capacity building has enabled us to work within a vacuum to promote Southern interests. Apart from rigorous repetition, all SouthSouthNorth activities undergo constant peer review and benefit from external independent monitoring.

How this approach works in practice

1 Scoping

Generally speaking, all our new activities begin with a scoping process. By scoping we mean an exploratory overview of the situation in a given area. Thus we began by examining all the countries within which we operate for evidence of CDM potential and willingness from owners. This involved an exploration of the general economic and energy situations in each country. That process led to a list of owners and owner associations that might be helpful. From this list, owners were scoped to find sources for potential projects. In consultation with owners a short- list of potential projects was then selected. These were rated for an initial assessment of project feasibility and for compliance with CDM requirements and for their potential contribution to sustainable development. These assessments were simply preliminary and were based upon our Matrix Tool for appraising projects. Out of this process a shorter list of pilot projects were selected for commencement in each country.

2 Raising capacity

For each project, the project owners selected a facilitator to be trained by SouthSouthNorth on aspects of sustainable development, CDM project development and CDM finance. These facilitators set up a project development team or core group of interested parties, which included the facilitator, representatives of the owner and of SouthSouthNorth, stakeholder representatives wherever this was thought to be necessary, and any other consultant or assistants that seemed to be required by the nature of the project.

3 Pre-feasibility

The next step involved identifying and describing the project with sufficient accuracy to begin the task of, first, selecting the appropriate technology that would ensure greenhouse gas emissions reductions by that project, and, secondly, for calculating the saving of these emissions as a result of that technology.

4 Feasibility

On the basis of the pre-feasibility, it was then decided to dedicate funds towards the projects being developed through to full feasibility, which included the development of the necessary project documentation.

5 Transaction and Financing

The feasible project was then presented for financing, and to the market for the transaction of the carbon credits.

Our project selection was also aimed at the development of projects across sectors, technologies and sizes. As it turned out, most of our projects were of the small-scale variety, and this Toolkit may reflect that most of our experience lies with this format.

The process generally

At regular local meetings of the project development teams and again in regular international meetings of SouthSouthNorth, the process of project selection, definition and calculation has been revised and improved. Further refinement and improvement has taken place through the help of local monitors at monthly project development team meetings and through monitoring reports from the independent Helio monitors, given at the SSN international meetings.

Throughout all of this, projects changed their nature. Sometimes this was designed to improve the contribution of the projects to sustainable development, other times to improve the technology to be applied or to improve the emissions reduction potential of the project. Sometimes projects were abandoned along the way because reassessment showed that they were in fact not feasible. Only through repeated hands-on involvement of the project design team and SouthSouthNorth, and through continual peer reappraisal of SouthSouthNorth teams and monitors, were projects allowed to proceed.

This iterative approach is encouraged in this Toolkit.

Client login

About SSN