Transcript Klimawandel

Greenhouse Gas Emission Monitoring of
Development Projects: Issues and Options
Meeting “EU Practioners Network”
Paris
4 March 2009
Presented by:
Jochen Harnisch
Coordinator Climate Change Policy
KfW Development Bank
Disclaimer
This presentation reports on work in progress.
It represents the views of the author and not
necessarily those of KFW.
It is intended to stimulate an expert discussion
among the members of the EU Practitoners
Network.
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Outline
1. GHG Footprint Project at KFW
2. Monitoring Emission Reductions from Energy Efficiency
Credit Lines
3. Monitoring of Reduced Emissions from Forest
Protection
4. Outlook
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Outline
1. GHG Footprint Project at KFW
2. Monitoring Emission Reductions from Energy Efficiency
Credit Lines
3. Monitoring of Reduced Emissions from Forest
Protection
4. Outlook
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From KFW Annual Report:Energy
Portfolio – GHG Impacts in 2006
Sector
Indicator
Results
Access/ Heating
directly supplied
greenhouse gases avoided
825,000 people
160,000 t CO2/ y
Generation
Indirectly supplied
greenhouse gases avoided
2,500,000 people
1,240,000 t CO2/ y
Credit schemes
greenhouse gases avoided
150,000 t CO2/ y
Transmission/ Distribution
greenhouse gases avoided
30,000 t CO2/ y
FC-Energy projects help to avoid 1.5 m tons of CO2 per year.
Our projects secure energy supply for more than 3.3 million people per year.
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GHG Monitoring @ KfW:
What do we want to achieve?
 Be able to quantify impacts of our projects and
programmes for funding ministries, their
stakeholders and general public
 Be able to prioritise and refine our project portfolio
in respect to climate impacts
 Get ready to fund projects and programmes under
the new UNFCCC climate finance mechanisms
 Apply consistent and internationally accepted, cost-
effective monitoring approaches
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Design Options for the UN Climate
Finance Architecture
Option 1: Conventional
Multilateral Funds
Sources
Trustees
Option 3: Climate
Finance Clearing House
National Budgets & International Sources of Finance
MDB
Implementing Bodies
Option 2: Global
Climate Bank
Miti- Adap- Technol.
gation tation Transf.
MFIs
RFIs
BFIs
Global
Climate Bank
(direct access)
UNFCCC
Clearing
House

MFIs
RFIs
BFIs
Developing Countries: National Budgets, Programmes, Projects, Companies, Civil Society
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Greenhouse Gas
Emissions Monitoring
Objectives:
 Have quantitative greenhouse gas emission monitoring
in place for internal and external evaluation
 Get ready for use of CDM as source of finance where
appropriate
Principles:
 Cost-effectiveness, accuracy, transparency
 Consistency (with IPCC/UNFCCC-Reporting, ISO
14064, GRI, WBCSD/WRI GHG Protocol)
 Make use of CDM methodologies where available and
approriate
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Relevant Project Types (I)
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Type
Priority
Methodology
Power supply: Renewables projects
+++
simple
Power supply: Renewables credit lines
+++
moderate
Power supply: Power plant modernisation
++
moderate
Energy efficiency: CHP / district heat
+
moderate
Energy efficiency: Eletricity T&D
++
complex
Energy efficiency: Demand side projects
+++
moderate
Energy efficiency: Demand side credit lines
+++
complex
Miscellaneous transport projects
+
complex
Miscellaneous waste projects
+
complex
Miscellaneous green projects (e.g. REDD)
++
complex
Relevant Project Types (II)
Type
Approach
Power supply: Renewables projects
Electricity grid factor
Power supply: Renewables credit lines
Basic programme statistics
and grid factor
Power supply: Power plant modernisation
CDM baseline data
Energy efficiency: CHP / district heat
Alternative heat generation
Energy efficiency: Eletricity T&D
Loss reduction & grid factor
Energy efficiency: Demand side projects
Energy audits
Energy efficiency: Demand side credit lines
Basic programme statistics
and typical sector data
Miscellaneous transport projects
???
Miscellaneous waste projects
??? LCA approaches
Miscellaneous green projects (e.g. REDD)
GHG Protocol LULUCF
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Scope 1 to 3 under the GHG Protocol
Source: GHG Protocol Initiative, 2004
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Different Levels of Project Impacts on Emissions
Level 3: Emission changes resulting from
demonstration and multiplication
Level 2: Emission changes resulting
outside of project boundary
Level 1: Emission
changes resulting inside
of project boundary
Process Flow: GHG Monitoring
1. Define Project Boundaries
Planning
2. Establish Baseline
3. Define Monitoring Plan
4. Periodic Reporting
Execution
5. Periodic Verification
6. Final Evaluation
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Evaluation
Relevance of Monitoring Plan
 Frequently relevant quantitative GHG monitoring issues
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are not defined until the project is started
A number of GHG monitoring issues can have costly or
politically undesired consequences
Make all relevant GHG monitoring issues part of the a
priori negotiated project package
Define & document relevant aspects of baseline and
monitoring approach before project is started
Monitoring plan and its annexes provide the central
depository for all information on baseline and monitoring
Drafted by consultant as part of feasibility study based
on guidance , final agreement as part of project appraisal
Outline of
Template for Monitoring Plan
A. Short description of the measure
B. Basic data for reporting
C. Basic data for quality assurance
D. Estimated annual emission reduction
E. Basic data for baseline for decreases of level 1 emissions
as well as levels 2 and 3 emissions, if necessary
F. Corrective measures
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Elements of Template for Monitoring Plan (I)
A. Short description of the measure
1. Description of the project borders
2. Which greenhouse gases are regarded for the project?
3. Description of the emission trend without the project
4. Start/start-up of the project activity
5. Duration of promotional phase of the project activity
6. Estimated physical life span of the activity
Elements of Template for Monitoring Plan (II)
B. Basic data for reporting
7. How often are the emissions to be determined or for the
reduction relevant data within the project borders?
8. How is this determination to take place? Which data are to be
raised in addition regularly?
9. By whom and when are these data collected?
10. By whom and when is the reduction computed and reported?
11. How, where, by whom and how long is the relevant data
become archived?
12 Who bears the cost of the reporting?
Elements of Template for Monitoring Plan (III)
C. Basic data for quality assurance
13. Which measures were taken for quality assurance with the
determination of the baseline?
14. Which measures are to be taken for quality assurance during
the reporting?
D. Estimated annual emission reduction
15. Level 1: Change of emission within the project borders
16. Level 2: Relevant changes of emission outside of the project
borders (only if relevant)
17. Level 3: Changes of emission by demonstration and
multiplication (only if relevant)
Elements of Template for Monitoring Plan (IV)
E. Basic data for baseline for emission reduction on level 1 as
well as levels 2 and 3, if necessary
18. Short description of the baseline to the emission development
level 1 emissions
19. Which emission factors were used for the baseline for level 1
emissions?
20. Which activity data were used for the baseline for level 1
emissions?
21. Which other assumptions were made for the deriving the
baseline for level 1 emissions?
22.-29. Same for level 2 and 3 emissions, where relevant
Elements of Template for Monitoring Plan (V)
F. Corrective measures
30. Under which specific circumstances would the base line
for level 1 have to be if necessary corrected?
31. Under which specific circumstances would reported
emission reductions for level 1 have to be if necessary
corrected?
32. Who examines the necessity for corrective measures?
32. Who bears the costs of corrective measures?
GHG Monitoring Project: Next Steps
 Definition of baseline and monitoring approaches for
selected project types
 Definition of template for monitoring plan
 Road testing of approaches and templates
 Integration of monitoring requirements into new
contracts with partners
Questions:
 When and how to determine level 2 and level 3
emissions and with which cut-off criterion?
 Agreing the monitoring plan during the project cycle
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Outline
1. GHG Footprint Project at KFW
2. Monitoring Emission Reductions from Energy
Efficiency Credit Lines
3. Monitoring of Reduced Emissions from Forest
Protection
4. Outlook
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Energy Efficiciency
and Renewables Loans
KFW
Intermediary Bank
SME 1
Investment 1
SME 2
Investment 2
SME 3
Consultant
Investment 3
Auditor
Reduction 1
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Reduction 2
Reduction 3
Energy Efficiency Credit Lines:
Towards Standard Approaches (I)
Small scale industrial energy efficiency projects
(typical approach):
 Typical criterion for industrial energy efficiency projects:
- 20 % reduction of product specific energy
consumption
- Project boundaries for small loans flexible
 Consultant to establish baseline and to demonstrate
compliance with 20% criterion of given measure ex-ante
 Consultant checks ex-post execution of planned
investment
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Energy Efficiency Credit Lines:
Towards Standard Approaches (II)
Larger scale industrial energy efficiency projects
(typical approach):
 Typical criterion for industrial energy efficiency projects:
- 20 % reduction of product specific energy
consumption
- Project boundaries is production line / site
 Consultant to establish baseline and to demonstrate
compliance with 20% criterion
 Consultant checks ex-post execution of planned
investment and change of energy consumption
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Energy Efficiency Credit Lines:
Towards Standard Approaches (III)
Building energy efficiency (typical approach):
 Typical criterion for building energy efficiency projects:
- 30 % reduction of energy consumption per unit
heated space
- Project boundary: typically a larger apartment or
office building or group thereof
 Consultant to establish baseline based on building
typology and established reduction effect of pre-defined
packages of measures
 Consultant checks ex-post execution of planned
investments
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Use of spotchecks or macroindicators?
Who bears
monitoring
costs?
SME 1
Investment 1
Who
reports?
What costs are
acceptable?
Monitoring of
investments or
of reductions?
KFW
Intermediary Bank
SME 2
Investment 2
Third Party
Verification?
SME 3
Consultant
Investment 3
Auditor
Reduction 1
Reduction 2
Reduction 3
Next Steps
 Agreement on mandatory and optional elements of
monitoring approaches
 Determination of maximum threshold for monitoring
costs (e.g. 10% of anticipated energy savings or 1 % of
total investment…?)
 Definition and development of standard TOR for project
consultants
 Integration of quantitative GHG aspects into project
evaluation procedures
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Outline
1. GHG Footprint Project at KFW
2. Monitoring Emission Reductions from Energy Efficiency
Credit Lines
3. Monitoring of Reduced Emissions from Forest
Protection
4. Outlook
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Monitoring the Greenhouse Gas
Emissions from Land Use Changes
?

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Source: Houghton, 1999
Monitoring GHG Emission Savings
From Avoided Land Use Changes

x
Example: Since 1995, KFW has helped to protect 20
million hectars of tropical forest in Brazil with roughly 2
billion tonnes of carbons bound in the vegetation alone.
Additional effect of protection? Potential follow-up land
use? When to report? What to report if protection fails?
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Issues in Relation to Reduced
Emissions From Deforestation (RED)
 C- stock monitoring and accounting needed for
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inclusion of forest protection into carbon markets
Consistency with other reduction projects
Taking into account carbon in plants and soils
Proper characterisation of status quo in relation to
potential vegetation
Estimation of carbon content of alternative land uses
Discounting of savings and emissions
Combination of in-situ inventories and remote sensing
monitoring approaches
Frequency and costs of monitoring efforts
Case Study Brazil:
Carbon Stock in Natural Vegetation
Souce:
PIK, 2009
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Natural Fraction of Vegetation
Source: PIK, 2009
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Elements of a Pragmatic Approach
(for discussion)
 Obtain estimate for carbon stock (plants and soil) for
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existing vegetation, taking into account potential
vegetation and real situation
Compare estimate of status quo with estimate with most
likely status without protection
Report saving as a fraction of difference between status
quo and most likely alternative e.g. 1/100 ?
If land-use change occurs, distribute over period of time
e.g. 10 years to avoid extreme fluctuations?
How to link to IPCC LULUCF Good Practice Guidance
and 2006 IPCC Guidelines?
Outline
1. GHG Footprint Project at KFW
2. Monitoring Emission Reductions from Energy Efficiency
Credit Lines
3. Monitoring of Reduced Emissions from Forest
Protection
4. Outlook
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KFW GHG Monitoring
Outlook 2009
 Integration of carbon footprint approaches into „Climate Check“
mainstreaming initiative of German ministry of development
 Management approval for full-scale application of carbon footprint
methodology
 Internal agreement:
- standard approaches on project boundaries
- acceptable baseline and monitoring methodologies
- sources of standard emission factors
- responsibilities
- acceptable cost thresholds
- cost-sharing provisions
- contents and formats of monitoring plans and reports
- standards provisions for TORs and consultant agreements
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Outlook: Questions for Discussion
 Where do our approaches agree?
 Where and why do we fundamentally diverge?
 What are others planning, declaring & practically doing?
 Which existing procedures, documents and tools could
be shared?
 Where can we share the development of procedures,
documents and tools?
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Thank you!
Further information:
KfW Development Bank
Dr. Jochen Harnisch
Coordinator Climate Change Policy
Palmengartenstr. 5-9
60325 Frankfurt
Germany
Phone: +49 69 7431-9695
E-Mail: [email protected]
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