Transcript Overview of the Development in CD4CDM Milan, Italy December 8, 2003

UNEP RISØ Centre on Energy, Climate and SD
Overview of the Development
in CD4CDM
Milan, Italy
December 8, 2003
Myung-Kyoon Lee
UNEP RISØ Centre
[email protected]
UNEP RISØ Centre on Energy, Climate and SD
Overview of CD4CDM
– Donor: the Netherlands Ministry of Foreign Affairs
– Implementing Agency: UNEP RISØ Centre on
Energy, Climte & Sustainable Development
– Phase I: Feb. 2002 – 2nd quarter of 2003,
preparation of national work plans
– Phase II: 3rd quarter of 2003 – end of 2005,
implementation of national work plans
UNEP RISØ Centre on Energy, Climate and SD
Main goals
– generating a broad understanding of the CDM
in the developing countries
– developing institutional capability and human
capacity of the developing countries to fully
participate as equal partners with developed
countries in the formulation and implementation
of the Clean Development Mechanism (CDM).
UNEP RISØ Centre on Energy, Climate and SD
Participating Countries
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three countries each from four regions
Asia: Cambodia, the Philippines, Viet Nam
Latin America: Bolivia, Ecuador, Guatemala
Middle East & North Africa: Egypt, Jordan, Morocco
Sub-Saharan Africa: Côte d’Ivoire, Mozambique,
Uganda
UNEP RISØ Centre on Energy, Climate and SD
Main Tasks
– sensitizing government supports for the CDM
– developing capacity of policy makers
– establishing institutional framework for the
CDM projects
– strengthening capabilities of the public and
private sectors
– creating a pipeline of the CDM projects
UNEP RISØ Centre on Energy, Climate and SD
Implementation Strategy
URC
RCs
CTs
studies, surveys, training courses, workshops, seminars,
consultations, information sharing and dissemination
UNEP RISØ Centre on Energy, Climate and SD
Main Activities in Phase I
• Completing national work plans
– National teams were set up and working on national work
plans.
– All 12 countries finished work plans and getting into phase II.
• “Introduction to the CDM”
– Translation into local languages: French, Arabic, Spanish,
Vietnamese, Cambodian, Portuguese, Chinese, Japanese,
Korean
UNEP RISØ Centre on Energy, Climate and SD
Main Activities in Phase II
– Establishing institutional and legal framework: first
half of 2004
– Training DNA staff and the private sector
participants (project developers, financial sector,
academia and research institutions, NGOs)
– Regional and national workshops: training,
reviewing, planning, implementing, sharing
– Identifying potential projects: 2004 - 2005
– Creating a pipeline
UNEP RISØ Centre on Energy, Climate and SD
Current Progress
Asia
Phase I
completed
Cambodia,
KP
Philippines,
ratification
Viet Nam
DNA
Viet Nam,
Cambodia
Nov. 2003
Regional
workshops Mar. 2004
Latin
America
ME & NA
completed
completed
completed
Bolivia,
Ecuador,
Guatemala
Morocco, R
Jordan, A
Egypt, S
Uganda, A
Bolivia,
Ecuador
Morocco,
Egypt
none
Sep. 2003
Dec. 2003
Sep. 2003
Oct. 2003
SSA
UNEP RISØ Centre on Energy, Climate and SD
Information Sharing and Collaboration
– Advisory body invited: NL, UNFCCC, WB, UNF,
UNIDO, UNDP, ADB, WBCSD
– New members to AB: IGES, e7
– Information sharing with private sector
UNEP RISØ Centre on Energy, Climate and SD
Development of Background Materials
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Introduction to the CDM: 2002
CDM Information and Guidebook: Dec. 2003
Institutional strategy to promote the CDM in Peru: Feb. 2004
CDM legal issues Guidebook: May 2004
Institutional issues in CDM implementation: May 2004
CDM and Sustainable Development: Feb. 2004
Guidebook on developing baselines for CDM projects: June
2004
– Bundling of small-scale CDM projects: May 2004
– Case studies on the contribution of the CDM to SD in
selected LA countries (Bolivia, Ecuador, Colombia,
Uruguay): May 2004
– Financial issues in the CDM
UNEP RISØ Centre on Energy, Climate and SD
Introduction to the CDM
– A popular guidebook to introduce the CDM to the
general public.
– It summarizes the essence of the CDM including
: a historical overview
: a brief overview of the CDM project cycle
: the national values and benefits of participation in the
CDM
: a national strategy to promote the CDM.
– It illustrates several examples of possible CDM projects
based on previous AIJ, ALGAS, and PCF projects
– Published and distributed in 2002 and translated into 9
languages.
UNEP RISØ Centre on Energy, Climate and SD
CDM Information and Guidebook (1)
– Focusing on the project cycle and PDD as well as
touching various aspects of the CDM
– Ch. 2 overviews the CDM drawn upon ”Introduction to
the CDM” by URC summarizing brief project cycle and
the national values and benefits of participation in the
CDM.
– Ch. 3 visits the issue of SD from the perspective of a
CDM project. This chapter presents an example of SD
indicators and major steps of an SD evaluation of CDM
projects.
– Ch. 4 explains each step of the project cycle with
informative tables and numbers.
– Ch. 5 shows how to fill out the PDD.
UNEP RISØ Centre on Energy, Climate and SD
CDM Information and Guidebook (2)
– Chapter 6 provides an overview on impact of CERs on
project viability, sources of funds and risk management.
– The last chapter, Chapter 7, reviews recent CER
market transactions and price trends.
– Appendices present frequently asked questions and
answers, a short overview of existing guidelines, and a
possible future list of eligible CDM projects categories.
UNEP RISØ Centre on Energy, Climate and SD
Institutional strategy to promote the CDM in Peru
– It shows the way in which Peru has designed an institutional
strategy to promote the projects eligible for the CDM.
– The description of this process might be useful to other countries
interested in establishing DNA to participate in the CDM.
– Peru’s activities in the CC negotiation and Peruvian legal and
instutional context for the CDM
– In Operationalization of DNA, it describes problems encountered
and how Peru has solved them including composition and
structure of DNA and how to finance it.
UNEP RISØ Centre on Energy, Climate and SD
CDM and Sustainable Development
– Providing an overview of how CDM projects can be evaluated in the
context of SD.
– Following a general introduction on the linkage of CDM to SD,
presented is the national development context of evaluating SD
impacts of CDM projects.
– Introduction of SD in relation to CDM projects
– Short overview of what will be involved in an SD evaluation of CDM
projects
– How to select and evaluate indicators
– How to use the SD evaluation in decision making
– Case studies illustrating different indicators and approaches
– Short overview of how other CDM capacity building projects or
guidelines address SD aspects of CDM
UNEP RISØ Centre on Energy, Climate and SD
Case studies on the contribution of the CDM
to SD in selected LA countries
– Two CD4CDM project countries (Bolivia and Ecuador) and two
other countries in LA (Colombia and Uruguay)
– Each country will undertake a few specific case studies to
describe the way the country is to assess the contribution of the
CDM projects to national SD: one EE, one RE + one sink project,
but different project types from different countries
– Case studies include how the criteria and SD indicators are
applied in existing CDM project proposals
UNEP RISØ Centre on Energy, Climate and SD
CDM Legal Issues Guidebook
– The main objective is to provide developing country stakeholders
with advice on legal and regulatory pitfalls host country CDM
stakeholders need to watch for during the various stages of CDM
project development.
– The Guidebook is intended to give as much examples and hints
as possible on what could go legally wrong in a CDM project and
the type of risks that may face both the CDM investor and the
host country, while presenting logical and simple legal,
contractual, and/or regulatory solutions.
– Want to show how developing countries can take care of their
own interests and at the same time develop efficient CDM
projects through alternative legal framework and CDM
contractual agreements.
UNEP RISØ Centre on Energy, Climate and SD
Guidebook on developing baselines
for CDM Projects (1)
– Baseline is a key component for a CDM project to be validated
and to generate CERs.
– Baseline guidebook aims to provide project developers and other
stakeholders of the CDM with a clear definition of baseline and
calculation methodologies for different types of CDM projects.
UNEP RISØ Centre on Energy, Climate and SD
Guidebook on developing baselines
for CDM Projects (2)
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key components of developing baseline methodology
the steps to use baseline methodologies for small scale projects
the step wise approach to the selection of project specific baselines
application of baseline methodology for selected projects
the issues in developing baseline for A&R projects
Annex will present some of the econometric and optimization models,
such as LEAP, MARKAL, ENPEP used for analysis of baseline
emissions. Presented will be the model structure, data requirements,
underlying assumptions and limitations of these models.
UNEP RISØ Centre on Energy, Climate and SD
Financial Issues in the CDM
– The main objective of the guideline is to present the implications of CERs as
an additional CDM project benefit and to present approaches in dealing with
several financial issues associated with CER generation.
– Chapter 1 will analyze the impact of CERs on project viability and will discuss
issues related to carbon revenues, transaction costs, etc.
– Chapter 2 will analyze CER implications on project finance. This will review the
emerging arrangement in CER procurement and the new sources of project
funds. This part will also present how the CERs could improve the debt
carrying capacity of the project.
– Chapter 3 will present new risks associated with CER generation and the
approaches in mitigating these risks.
– Chapter 4 will present the emerging CER market development and the
implications of the proposed linkage with the EU-ETS, CER buyers and
transactions, and emissions reductions price trends.
UNEP RISØ Centre on Energy, Climate and SD
Bundling of Samll Scale CDM Projects
– Criteria: small-scale CDM projects
– Rationale
- high transaction costs
- a large number of EE and RE projects meeting SD and host priority criteria
are small-scale
– Advantages
- simplified baseline and monitoring methodology can be used
- small-scale project developers can also benefit from the CDM
– Issues to be covered: approaches and procedures
- how to bundle and what type of projects?
- how to address issue of differing baselines and monitoring requirements?
- who should bundle?
- what kind of arrangements are possible between stakeholders?
- what kind of capacity and infrastructure are needed?