Exploring stages/phases and gates as a project management approach for South African clean development mechanism projects

Abstract

Climate change is a global problem that is at least partially caused by human induced greenhouse gas emissions. Various initiatives were developed in the 1990’s to incentivise greenhouse gas emission reductions below legal limits. One of these systems is the Kyoto Protocol’s Clean Development Mechanism (CDM). In these incentive schemes parties can sell (the Seller) their greenhouse gas emission reductions to other parties (the Buyer) who need to offset their emissions. Emission reduction incentivised projects have technical aspects, financial aspects and regulatory requirements. The complexity of emission reduction schemes are further increased due to the levels of scrutiny and diverse sources of scrutiny that a project undergoes. As a developing country South Africa (SA) has a lot to gain by the successful implementation of CDM projects. Unfortunately very few successful CDM projects exist in South Africa. It was then the aim of this research to explore why there are so few projects and what are the current CDM project management approaches followed for CDM projects in SA? During the investigation aspects of the project management landscape of SA CDM projects were structured by means of a stage/phase and gate approach. This was done to aid in addressing the specific requirements of CDM projects and to combine this with the limited real world experience of successful CDM projects in SA. A stage/phase-gate model was developed because of the model’s ability to manage risk per stage/phase and overall risks, as well as the ability of these models to assist in portfolio management. Various research methods were used to develop the final proposed stage/phase and gate project management model (Model β). These methods included over and above literature reviews: <ul><li> Two rounds of questionnaires to develop the model; </li><li> Interviews with individual experts through identified cases to validate the first version of the model; and </li><li> Interaction with the South African Clean Development Industry Association to validate the second version of the model. </li></ul> Model β should not be seen as a stationary model. The model should rather be adapted by each emission reduction project developer to suit the developer’s company specific requirements. Furthermore the evolving regulatory environment of emission reduction systems will lead to the continued adapting and updating of Model β. The model could then be useful for: <ul><li> Project developers to plan and execute their projects; and </li><li> Buyers or Investors in projects as to quickly ascertain current project status and progression. </li></ul> It is envisaged that applying Model β, or a derivative, will: <ul><li> Manage risk due to increased project management through a stage/phase and gate approach; </li><li> Decrease project development time and ensure all required outputs are achieved quicker; and </li><li> Due to decreasing development time, costs could be managed better. </li></ul>