What is a baseline?
A baseline (or 'baseline scenario') is defined in the CDM Glossary (v.6) as:
The scenario for a CDM project activity or CPA that reasonably represents the anthropogenic emissions by sources of GHG that would occur in the absence of the proposed CDM project activity or CPA.
In other words, a baseline is a hypothetical reference case, representing the volume of greenhouse gases that would have been emitted if a Programme of Activities (PoA) or component project activity (CPA) were not implemented.
Therefore, the baseline can be used to determine:
- whether a CPA is additional; and
- the volume of additional greenhouse gas emission reductions achieved by the CPA.
A baseline must be established for the PoA and all CPAs within the PoA.
The Programme of Activities Design Document (CDM-PoA-DD) must include a justification of the choice of an approved baseline and monitoring methodology (or combination of approved methodologies) and an application of this methodology to determine the baseline (EB 55, Annex 38, paragraph 6(f)).
The CPA Design Document (CDM-CPA-DD) must also include a calculation of the baseline emissions for the particular CPA within the PoA (EB 55, Annex 38, paragraph 7(e)(ii)).
Suppressed Demand Baseline
Suppressed Demand Baselines have particular relevance in Less Economically Developed Countries (LEDCs), where basic energy needs are not being met. In such circumstances, demand for emissions is being artificially suppressed by a lack of economic resources. In the future, it is likely that demand will increase along with development. The idea of crediting future increases in demand, where it is currently being suppressed, has a basis in the original negotiations of the CDM rules during the UNFCCC process. Paragraph 46 of the Marrakech Accord states that:
The Baseline may include a scenario where future anthropogenic emissions by sources are projected to rise above current levels, due to the specific circumstances of the host.
The Guidelines on the Consideration of Suppressed Demand in CDM Methodologies provide the methodological approach for establishing a baseline in circumstances of suppressed demand. Under these Guidelines the concept of a 'minimum service level' was established. The minimum service level is a baseline of emissions where minimum human needs are met. Basic human needs include physical and physiological needs such as basic housing, basic energy services, sanitation and transportation. A supressed demand baseline is appropriate when basic human needs are not being met at the time of the implementation of the PoA.