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There are a number of misunderstandings about the reality and meaning of CDM baseline setting. This paper clarifies them, and provides theoretical bases for setting guidelines on methodologies for the Methodology Panel under the CDM Executive Board. At the same time, it presents concerns over the current procedures, intending to make the future CDM scheme more effective and workable.

The contents of this paper include the reconsideration on what a baseline scenario is all about, the significance of establishing a high-quality baseline in business terms, the approach of adding CDM parts to existing projects under consideration, the position of setting baseline methodology in scenario building and standardization process, and concerns over current baseline-related processes and the template (version 01) of project design document.

As the first round of methodologies approval process started, several problems are getting obvious, especially the lack of proper understanding of the Project Design Document and the baseline/monitoring methodologies, which are to be discussed.