Transcript Points of departure for CDM • SD and CDM: CDM is the first trading mechanism insisting on SD article 12 of KP “…assist.

Points of departure
for CDM
• SD and CDM: CDM is the first trading mechanism
insisting on SD article 12 of KP “…assist Parties not
included in Annex 1 in achieving SD and contributing
to the ultimate objective of the Convention….”
• SD Race to the bottom?: Parties have by-and-large
raced to the bottom in applying SD requirements
through DNA (stringent SD should not be a barrier to
FDI)?
• Low hanging fruit: large quantities of low-cost
emissions reductions from industrial chemicals and
methane reduction crowding out high SD CO2
projects.
Doing GEF in the South
• SSN used maximum SD benefits as the starting
point to maximise benefits to the South.
• The GEF mitigation projects in Africa by-and-large
are renewable energy with some efficiency projects
• The projects with which we have experience all
utilise solar energy for electricity or heat
• Providing small quantities of electricity changes
QOL enormously
• Small amounts of electricity can be used to provide
draft control in tobacco barns reducing impact on
indigenous forest
Experience limited to the
front end of the cycle
First project participant
Bellville South Reduced
landfill gas to industry
replacing LSO/HFO
•
124000 CO2 e
tonnes/year
Lessons from a landfill
• Public sector is slow to respond to opportunities,
enable new institutions and procure services
• Public sector is not the right institution to trade
credits
• Public waste management dept. is not used to
receiving income
• People who live near landfills hate them and
distrust any attempt to prolong their life
• Project architecture can increase SD benefits
through designing local benefits into projects
Institutional arrangements
to max SD
Socio-economic cobenefits of Bellville
• Landfills are low hanging fruit with large emissions
reductions but few SD benefits
• Few jobs created
• Reduction in particulate emissions if replacing other
fuels
• Odour reduction and leachate management
• With income from CDM plus gas sales city can comply
with licensing requirements
• Could mean modernisation of landfills: capping and gas
management
• Using private funds saves on public funding of
infrastructure that would otherwise tend to crowd out
social spending
•
Kuyasa low cost
housing upgrades
Insulated ceilings, solar
water heaters and CFLs
reduce electricity for
services
2.8 tonnes
CO2/house/year
• 2.8 tonnes CO2e/house/year
• Total 6558 tonnes CO2e/year
A community learns
Lwandle installed 300+ SWHs in hostels to homes project upgrade in 2001
Facilitators learned
• Projects with many beneficiaries are process heavy
but this capacity has security and ownership cobenefits
• CDM can be used to leverage funds for new energy
services, new classes of energy service and
poverty reduction (while it is a novelty) (high
hanging fruit)
• CDM can avoid future emissions (current
suppressed demand for energy services)
Accounting for
Suppressed Demand
An example of space heating in low income housing
Outdoor ambient
winter’s day
temperature profile
Thermal power required to reach 21oC
Thermal energy
required without
insulated
ceilings
Suppressed
demand for
thermal energy
Thermal energy
required in
houses with
insulated ceiling
Current level of
space heating
Morning
Evening
co-benefits of Kuyasa low
cost housing upgrade
• Poverty reduction: New services and energy
savings
• Employment creation: demand management
increases employment prospects (500 plus person
years for 2309 upstream and installation) - more for
maintenance
• Prices and risk: use of renewable energy stabilises
future fuel price and availability uncertainties
• Spill over: large-scale procurement can drive
economies-of-scale in price of technologies
co-benefits of Kuyasa low
cost housing upgrade
• Building on good practice: The poor are efficient
managers of energy services within the
constraints of the fuel and appliances they have
access to. The projects builds on this
• Replicability: 1million new low-cost houses since
1994 in SA – most built without insulated ceilings
or water heaters
Mondi Richards Bay
biomass project
Biomass replaces coal and
methane avoided
122000 tonnes CO2e /year
Socio-economic cobenefits of Mondi projects
• Prices and risk: use of renewable energy stabilises
future fuel price and availability uncertainties
• Cleaner practices: CDM is leveraging cleaner
practices
• Branding: Mondi leads in SA and sees possibility to
re-brand itself as linked to cleaner production
practices
• Job creation: SMME entrepreneurs jobs created in
sourcing and delivery of biomass to plant
• Landfill longevity: Landfill space freed up extending
its life
• Replication: Champion created within Mondi
Doing CDM in
the South
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CDM is not easy – it requires specialists…
It results in no net emissions reductions
It can result in a short term net increase of emissions
CDM has very little to do with SD – sadly… unless…
Attracting FDI appears to be higher priority that SD
CDM can leverage technology leapfrogging
CDM can address poverty: by improving affordability of energy
services and creating employment on the demand side
• The uncertain lifespan already slowing interest, but is a good
stick for speeding project development
• Possibilities exist for combined mitigation-adaptation projects
in future
Conclusions of
experiences
• CDM and GEF GHG mitigation gives value to
GHG mitigation
• TREC monetizes value of renewables
• Until SD given value in the market, benefits
will remain incidental rather than sought after
• SD benefits could be granted monetized
value through Gold Standard if a premium is
paid
• CO2 projects may increase SD benefits in
general – perhaps argument for a premium
for CO2 or decreased GWP of other GHGs
Conclusions of
experiences (cont.)
• SD remains merely a gate that may be shut
if undesirable projects are promoted under
CDM
• So can socio-economic benefits really be
driven in the CDM? Yes, but there is a need
for a mechanism that enables a sustainable
development dividend…