Before a CDM project can be registered by the UNFCCC CDM-Executive Board, it must first seek approval from the Designated National Authority (DNA) of the host country. The DNA is required to evaluate and issue a Letter of Approval (LoA) for approved projects, confirming that the project will help the host country to achieve sustainable development (see Figure 2).
Figure 2 CDM project approval procedures
Violation of laws
Participation in the Clean Development Mechanism implies the responsibilities of obeying the laws and regulations as well as the policies of the host country. This means that to ensure the project is being developed in the name of the environment and sustainable development, the Thai government can monitor the operation of a CDM project through existing laws and regulations (such as environmental regulations or codes issued by the Department of Industrial Works). If a CDM project is involved in incidents that violate national laws or regulations, the rights to operate the facility under the CDM scheme can be terminated. This may also result in the withdrawal of the rights to purchase or exchange carbon credits from the project.