What is a baseline?
The baseline (or 'baseline scenario') for a CDM project activity is defined in 3/CMP.1, Annex, paragraph 44 as follows:
The baseline for a CDM project activity is the scenario that reasonably represents the anthropogenic emissions by sources of greenhouse gases that would occur in the absence of the proposed project activity (3/CMP.1, Annex, paragraph 44).
In other words, a baseline for a CDM project activity is a hypothetical reference case, representing the volume of greenhouse gases that would have been emitted if the project were not implemented. Therefore, the baseline can be used to determine:
- whether a CDM project activity is additional; and
- the volume of additional greenhouse gas emission reductions achieved by a project activity.
Baselines must cover emissions from all gases, sectors and source categories listed in Annex A to the Kyoto Protocol that occur within the project boundary:
A baseline shall cover emissions from all gases, sectors and source categories listed in Annex A within the project boundary (3/CMP.1, Annex, paragraph 44).
The Executive Board has clarified that the baseline definition set out above, and its role in the determination of additionality, have been satisfactorily developed and require no further work (EB 5, Annex 3, paragraph 5).
A baseline is deemed to be accurate if it is derived using a baseline methodology covered by the modalities and procedures. This is set out in 3/CMP.1, Annex, paragraph 44, which states:
A baseline shall be deemed to reasonably represent the anthropogenic emissions by sources that would occur in the absence of the proposed project activity if it is derived using a baseline methodology referred to in paragraphs 37 and 38 above (3/CMP.1, Annex, paragraph 44).
Paragraph 37(e) provides that baseline and monitoring methodologies must comply with the requirements of:
- Methodologies previously approved by the Executive Board; or
- Modalities and procedures for establishing a new methodology, as set out in paragraph 38 below (3/CMP.1, Annex, paragraph 37(e)).
Paragraph 38 sets out the procedure for creating a new baseline and monitoring methodology.
Therefore, a baseline is deemed to reasonably represent the most likely alternative scenario to project implementation if it is developed using a baseline methodology that is:
- already approved by the Executive Board; or
- developed in accordance with the rules for developing new methodologies and then approved by the Executive Board.