CLEAN DEVELOPMENT MECHANISM TOOL02 Methodological tool Combined tool to identify the baseline scenario and demonstrate additionality Version 07.0 TOOL02 Methodological tool: Combined tool to identify the baseline scenario and demonstrate additionality Version 07.0 TABLE OF CONTENTS Page 1. INTRODUCTION ........................................................................................................ 3 2. SCOPE, APPLICABILITY, AND ENTRY INTO FORCE ........................................... 3 2.1. Scope ................................................................................................................ 3 2.2. Applicability ....................................................................................................... 3 2.3. Entry into force .................................................................................................. 3 3. DEFINITIONS ............................................................................................................. 3 4. METHODOLOGY PROCEDURE ............................................................................... 5 4.1. Step 0: Demonstration whether the proposed project activity is the first-of-its-kind.......................................................................................... 7 Step 1: Identification of alternative scenarios ................................................... 7 4.2.1. Step 1a: Define alternative scenarios to the proposed CDM project activity ....................................................................................... 7 4.2.2. Step 1b: Consistency with mandatory applicable laws and regulations ............................................................................................ 9 Step 2: Barrier analysis..................................................................................... 10 4.3.1. Step 2a: Identify barriers that would prevent the implementation of alternative scenarios ............................................... 10 4.3.2. Step 2b: Eliminate alternative scenarios which are prevented by the identified barriers ...................................................... 11 4.4. Step 3: Investment analysis.............................................................................. 13 4.5. Step 4: Common practice analysis ................................................................... 15 4.5.1. Step 4a: The proposed CDM project activity(s) applies measure(s) that are listed in the definitions section above .................. 16 4.5.2. Step 4b: The proposed CDM project activity(s) does not apply any of the measures that are listed in the definitions section above ....................................................................................... 16 4.2. 4.3. 2 of 18 TOOL02 Methodological tool: Combined tool to identify the baseline scenario and demonstrate additionality Version 07.0 1. Introduction 1. This tool provides a step-wise approach to identify the baseline scenario and simultaneously demonstrate additionality. 2. Scope, applicability, and entry into force 2.1. Scope 2. Project participants shall apply the following four Steps: (a) STEP 0. Demonstration that a proposed project activity is the first-of-its-kind; (b) STEP 1. Identification of alternative scenarios; (c) STEP 2. Barrier analysis; (d) STEP 3. Investment analysis (if applicable); (e) STEP 4. Common practice analysis. 3. The procedure is summarized in Figures 1 and 2. For more specific detail regarding the flowcharts please refer to the text. 2.2. Applicability 4. The tool is applicable to all types of proposed project activities. However, in some cases, methodologies referring to this tool may require adjustments or additional explanations as per the guidance in the respective methodologies. This could include, inter alia, a listing of relevant alternative scenarios that should be considered in Step 1, any relevant types of barriers other than those presented in this tool and guidance on how common practice should be established. 2.3. Entry into force 5. The date of entry into force is the date of the publication of the EB 96 meeting report on 22 September 2017. 3. Definitions 6. The definitions contained in the “Glossary of CDM terms” shall apply. 7. For this tool, the following definitions apply: (a) Applicable geographical area should be the entire host country. If the project participants opt to limit the