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Social marginal cost = Private marginal cost + Marginal externality

Cost / benefit

Private marginal cost

Marginal benefit

Q-social

Q-private

Quantity

Non Annex I country, Say India

Annex I country, Say UK

A project activity site in a host country Projected amount of GHG emissions from the site CERs CERs

Baseline scenario

Proposed project scenario

A total emission cap of an Annex I Party

Submission of application

documents
National CDM Authority hosted by Ministry of Environment & Forests See http://envfor.nic.in/cc/cdm.htm

Circulation among National CDM Authority (NCA) Members

Presentation by Project Developers during NCA Meeting

60 days

Then evaluated by CDM Executive Board, UNFCC

Clarification / additional information from Project Developer if required by NCA members

Host Country Approval letter

A baseline for a CDM project activity is a hypothetical reference case, representing the volume of GHGs that would have been emitted if the project were not implemented.

Baseline scenario

Estimated amount of the emissions reduction Projected emission level after a CDM project is introduced Time Crediting period

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