Deduction of the Adaptation Share of Proceeds
The Adaptation Share of Proceeds is a deduction of 2% of the certified emission reductions (CERs) generated by the project each year used to fund measures in developing country Parties to the Protocol that will assist them in adapting to the adverse effects of climate change. It is deducted by the Executive Board prior to issuance, such that only 98% of generated CERs are delivered to the accounts of project participants.
The amount of the Adaptation Share of Proceeds was set by the COP in 17/CP.7:
The Conference of the Parties: ... Decides :
That the share of proceeds to assist developing country Parties that are particularly vulnerable to the adverse effects of climate change to meet the costs of adaptation, as referred to in Article 12, paragraph 8, of the Kyoto Protocol, shall be two per cent of the certified emission reductions issued for a clean development mechanism project activity (17/CP.7, paragraph 15(a)).
This decision was subsequently confirmed by the COP/MOP in 3/CMP.1:
The Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol: ...
Decides to confirm, and give full effect to any actions taken pursuant to, decision 17/CP.7 and to any other relevant decisions by the Conference of the Parties, as appropriate (3/CMP.1, paragraph 1).
Exemption for projects in least developed countries
CDM project activities taking place in least developed country Parties are exempt from paying the Adaptation Share of Proceeds :
... clean development mechanism project activities in least developed country Parties shall be exempt from the share of proceeds to assist with the costs of adaptation (17/CP.7, paragraph 15(b), confirmed at 3/CMP.1, paragraph 1).