The total number of years for which a multiproject baseline will be considered adequate to reflect “what would occur otherwise” is the key to determining the amount of emission units that could be expected from the CDM project. Deter­mining up-front the crediting associated with a multiproject baseline would also enhance the transparency and consistency of the project, in addition to providing some certainty for the project’s potential CER buyers.

A recent Dutch study on baselines suggests considering the development of a generic list of time horizons based on the type of project (JIRC, 2000). The Brazilian climate change experts have suggested using lifetimes of 15 to 50 years for different types of power plants in Brazil, with 15 years for gas turbines and internal com­bustion engine plants, and 25 years for steam turbines. For this specific project, the lifetime considered is the same as the Santa Elisa’s investment program, which is set at 25 years. Some argue, however, that the carbon project lifetime should be shorter than the typical lifetime of power project investments.

Considering the aforementioned issues, the Santa Elisa Carbon Credit Project is aggregating the carbon credits generated in the expansion cogeneration pro­ject, which will deliver energy to the CPFL grid under a 10-year contract. In a conservative way, the project participants suggested a crediting period of 7 years. According to decisions from COP-7, it will be possible to renew the crediting period up to two times, provided that, for each renewal, a designated operational entity determines and informs the executive board that the original project baseline is still valid or has been updated. This diminishes the possibility of selling a nonexistent emissions reduction due to baseline changes.

Following on requirements of the Brazilian law, Santa Elisa has already received the Previous Environmental License from the Environment State Secretary (Secretaria de Estado do Meio Ambiente) and the Installation License from CETESB (Companhia de Tecnologia de Saneamento Ambiental), and can move ahead with the project.