Transcript TITLE HEADER - Latin American Carbon Forum

Role of the Carbon Markets
in Harnessing Ambition for
Closing the pre-2020 Gap
Hugh Sealy, Chair, CDM Executive Board
Latin American and Caribbean Carbon Forum
Bogota, 4 September 2014
Context
• UNEP’s report estimates the mitigation gap until 2020 to be at least
20 billion tons of CO2.
• Preferred measures currently undertaken by governments and
regions are carbon pricing instruments, including carbon markets.
• The CDM’s infrastructure works, and is the only global tool
currently in use.
• The CDM has done what it was set up to do: mobilize investment in
developing countries, support low-carbon development and
reducing the cost of mitigation.
2
Some CDM numbers
• CDM projects registered: 7538
(+262 PoA)
• Active (issuing) projects: ~2600
• CERs issued: 1.47 billion
• Available supply (snap shot of):
~430 million
• Potential supply from all registered
CDM projects accumulated until
2020: ~8 billion CER
• Pre-2020 ambition gap:
at least 20 billion tonnes CO2 eqv
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The CDM provides ready-made infrastructure
• Proven Monitoring, Verification, and Reporting rules and processes
with Third-party validators / verifiers
• Designated national authorities in over 125 developing countries
• 4 regional collaboration centres: Bogota, Kampala, Lomé, St.
George’s
• Project developers, consultants, experts
• Over 200 project methodologies
• Internal support capacity within the UNFCCC secretariat
• Legacy benefits are in place on the ground (e.g. technology,
capacity, interest in mitigating emissions)
• Seamless tracking and accounting of credits
4
Voluntary cancellation of CERs
• The use of CERs is not limited to compliance markets
• Concept of “voluntary cancellation” = effective removal of a
CER from further use or transfer.
• Voluntary cancellation can be done for a number of
reasons:
 Increase de facto mitigation
 Support to developing countries (finance, technology, capacity building etc)
 Support to specific sectors/countries/projects
 Contribute to closing pre-2020 ambition gap
 Preserve investors’ confidence in UNFCCC mandated mechanisms
 Become climate neutral
 Make good business sense
 Incentivize clean development
5
Towards a 2015 Global Climate Agreement
• Market approaches are prominent in low cost initiatives to
mitigate climate change … and are being pursued in
constituencies around the world. The CDM has over 9 years
of experience “by learning by doing” and is ready to
contribute.
• The 2015 agreement
should include
carbon markets in
its mitigation tool box.
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Final thoughts
• We have the supply: Voluntary cancellation of CERs could reduce
the emissions gap significantly.
• We have the technical systems: Methodologies, established
registration and issuance processes, MRV of effort, registry/tracking
etc.
• We have unrestricted access: all Convention Parties and the
private sector can voluntarily cancel CERs
• We have pledged the money: the necessary levels of financial
support have already been pledged
• What we need is ambition to close the gap!
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Thank you