Transcript Christiana Figueres

Is the CDM delivering?
Experiences in LAC
Christiana Figueres
for the
Annex I Expert Group on the UNFCCC
Paris March 21, 2005
Presentation
1. The good news
- LAC has concrete CDM achievements
2. The tough question
- What should the CDM catalyze?
3. The bad news
- What cannot occur under current circumstances
4. Moving forward
- 2005-12
- Post 2012
Figueres, 3-2005
LAC Achievements:
Institutional
• All countries have ratified UNFCC and KP
• Most countries have DNA or are forming
• Operational funding
– Public and international cooperation
• Canada, Dutch, Finland, Germany, Japan, CAF, UNEP/Riso,
UNDP, WB
• MOUs
– Austria, Canada, Finland, France, Italy, Spain,
Netherlands, others
Figueres, 3-2005
LAC Achievements:
Capacity Building
• Major investment
– $18 million over past 3 years (Canada, WB,
CAF, UNDP, UNEP, etc)
– Intra-regional capacity building
• Consulting
• Lesson sharing
• Exchange of views on UNFCCC negotiation
Figueres, 3-2005
LAC Achievements:
Project Pipeline
• 184 projects in some stage of preparation
and under review on the part of DNA’s
• 39 have received some degree of national
approval
– 15 Letter of Endorsement
– 24 Letter of Approval
Source: IDB, 2004
Figueres, 3-2005
LAC Achievements:
Project Advance
Projects under validation or registry
Latin America
Asia
Africa
Other
33
18
1
1
62.3%
34.0%
1.9%
1.9%
Total
53
100%
Source: www.unfccc.int updated Dec 1, 2004
Figueres, 3-2005
LAC Achievements:
Market Share
2003-2004
2002-2003
OECD
19%
OECD
10%
Latin
America
27%
Latin
America
40%
Transition
Economies
8%
Africa
4%
Transition
Economies
15%
Africa
5%
Asia
21%
Source: World Bank, State & Trends of Carbon Market, June 2004
Asia
51%
Figueres, 3-2005
LAC Achievements:
Diversity in Size
• 17 Small-scale
– Smallest (by CERs)
Zacapa/Honduras,
small-hydro; 1 kTonCO2/year; 10 years
• 16 Conventional
– Largest (by CERs)
Salvador de Bahia/Brazil;
landfill gas; 800 kTonCO2eq/year; 7x3=21 years
Source: unfccc.int updated Dec 2004
Figueres, 3-2005
LAC Achievements:
Diversity of Sectors
(Validation & Registration stages)
Biomass
3%
Fossil fuel
switch 3%
Landfill gas
27%
Renewable
energy 52%
Source for project information: CDM EB web page, Nov.2004
Other
methane
recovery
15%
Figueres, 3-2005
LAC Achievements:
Diversity of Participants
(Validation & Registration stages)
n.a.
public-private 6%
3%
state-owned;
local
government
16%
private
company
52%
subsidiary of
transnational
23%
Source: CDM EB web page,Nov.2004
Figueres, 3-2005
LAC Achievements:
Methodological Expertise
New methodologies proposed by
Multilateral
funds: staff
13%
Annex 1
experts
19%
LAC based
experts
68%
Source for project information: CDM EB web page, Nov.2004
Figueres, 3-2005
LAC Achievements:
Technical Expertise
PDD Development
n.d. 9%
Multilateral
funds: staff
18%
LAC based
experts 49%
Annex 1
experts 24%
Source for project information: CDM EB web page, Nov.2004
Figueres, 3-2005
LAC Achievements:
Private Sector Engagement
• PDDs validated,
methodologies submitted:
–
–
–
–
–
–
–
Econergy
Ecoinvest
Ecosecurities Brazil
ICF Consulting do Brazil
MGM International
Poch Ambiental
Urquidi, Riesco, y
Compania
• PDDs in pipeline:
–
–
–
–
CAEMA
CC&D
Servicios Ambientales
Others
Source for project information: CDM EB web page, November 2004; National CDM Offices
Figueres, 3-2005
LAC Achievements:
Reduction of Transaction Costs
• DNAs
– Evaluate and approve projects
– CDM promotion
– Market enabling
• Applicant Entities
– ICONTEC in Colombia
– TECPAR in Brazil
– 4 provisionally Designated Operational Entities have local
offices/representations in LAC
Figueres, 3-2005
LAC Achievements:
Reduction of Transaction Costs
• CAF (Andean Development Corporation)
– 17 member countries, regional presence
– Both public and private lending
– Infrastructure focus
• Energy, transportation and industry
–
–
–
–
Carbon finance program (PLAC) since 1999
ER intermediary since 2002
Mitigates risk
Has transacted 10MT, 18+ under evaluation
Figueres, 3-2005
LAC Achievements:
Projects have Positive Impacts
• Greening energy mix
• Increasing access to energy in rural
areas
• Introduction of new technologies
• Improving air quality
• Conserving natural resources
• Others
Figueres, 3-2005
The Tough Question
Back to Basics
•
Assist industrialized countries in achieving KP
compliance
•
Assist non A-1 in achieving sustainable
development;
Assist non A-1 in contributing to atmospheric
stabilization
•
Figueres, 3-2005
“Achieving SD”
and
“Contributing to stabilization”
require
integrating climate considerations
into domestic policy of non A-1
in order to
decarbonize growth trajectories
Figueres, 3-2005
CDM not helping to integrate
cc into national policies in LAC
1. Institutional weaknesses of DNAs
a. Min Env – except Br, Gua, Jam
b. Low level funding/ scarce staffing
c. Mandate
a. Regulatory: project is congruent with existing policies
b. Promotional
Figueres, 3-2005
CDM not helping to integrate
cc into national policies in LAC
2. Limited impact of capacity building
IMPACT
SYSTEM
LEVEL
INSTITUTIONAL
LEVEL
INDIVIDUAL
LEVEL
Integrate industry
Sectoral policies
Local project finance
Legal framework of DNA
Evaluation criteria
Approval procedures
Project preparation
Baseline methodologies
Additionality
INTEGRATION
Figueres, 3-2005
CDM not helping to integrate
cc into national policies in LAC
3. Design of the CDM
A. Project-based instrument
•
•
Single isolated projects
Congruency with existing national policies
B. Interpretation of additionality/national
circumstances excludes climate friendly
policies.
Figueres, 3-2005
5 Case Studies
Brazil, Colombia, Costa Rica, Ecuador, Mexico
•
•
•
•
History of mitigation activities
Current institutional arrangements
Experience to date with CDM
Other sectoral initiatives with GHG
emissions implications
• Assessment of integration of climate
considerations into national policies
Figueres, 3-2005
5 Case Studies
Brazil, Colombia, Costa Rica, Ecuador, Mexico
• Conclusions:
– DNA does not necessarily lead to CDM
projects
– Country’s mitigation activities cannot be
measured by its involvement in carbon market
– Integration of climate considerations into
national policies can disqualify projects from
CDM
Figueres, 3-2005
Irony
Some countries are integrating climate
considerations and national policies
But they are/will be disqualified by the
CDM
Figueres, 3-2005
Perverse Incentive
• CDM most successful in those countries
with climate damaging policies
• Non-A1 continue on an emission intense
growth path, and implement a few
isolated CDM projects
Figueres, 3-2005
LAC emissions are rising faster
than global emissions
Source: WRI, CAIT
Figueres, 3-2005
Global CO2 intensity is declining;
LAC intensity is rising
Source: WRI, CAIT
Figueres, 3-2005
Moving forward…
2005-12
• Move capacity building to system level
– Initiate more local banks in carbon finance
• Push for methodologies which help integrate cc
into national policies
• Pilot one sector
– Methane recovery from landfills in LAC
Figueres, 3-2005
Moving forward…
post 2012
• Deepening of A -1 commitments
• Market mechanism for non A-1 participation
– Sector wide
• Large scale initiatives which transform sector
– Policy based
• Intentional SD policies
• Market pull for clean technologies
Figueres, 3-2005
Moving forward…
post 2012
• Request WB to launch a “Carbon Adjustment”
(DLP) initiative for larger non A-1
– Energy/transportation policy reforms to reduce
carbon intensity
– Policy pull for clean technologies
– Appropriate financing instruments
– Decarbonization of key sectors
– Greening of the WB lending portfolio
Figueres, 3-2005
“ Institutional Capacity
to Integrate Economic Development
and Climate Change Considerations:
An Assessment of DNAs in LAC ”
Inter American Development Bank, October 2004
www.iadb.org/sds/ENV/publication/publication_183_3901_e.htm
Christiana Figueres
Tel. +1-202-294-4898
[email protected]