Transcript The Global Carbon Initiative

International Climate Change Regime

UNFCCC
–

Kyoto Protocol
–
–

“stabilization of greenhouse gas concentrations at a level
that would prevent dangerous anthropogenic interference
with the climate system”
QELROs for OECD countries and EITs (Annex I) to
reduce emissions of six GHGs on average 5.2% below
1990 levels in 2008 - 2012
Kyoto Mechanisms: JI; CDM; Emissions Trading
Buenos Aires Plan of Action
–
–
–
Strengthen implementation of the Convention
Demonstrate, inter alia, substantial progress on the Kyoto
Mechanisms
Decisions on the operational modalities of the Kyoto
Mechanisms by CoP-6
Purpose of the PCF
To help create a market for carbon offsets
within the framework of the Kyoto
Protocol through
–
–
–
demonstrating how CDM and JI trade can
contribute to sustainable development
providing “learning by doing” experience for
Parties to the Protocol on key policy issues (for
example, defining and validating baselines)
building confidence that the trade can benefit both
sellers and buyers
What is the Prototype Carbon Fund?
OECD governments/
companies
buy offsets
Client countries
WB manages PCF
(EITs/ developing countries)
originate offsets
$
$
CO2
Benefits:
• risk diversification
• reduced transaction costs
Project selection
and validation
From Projects to
Emissions
Reductions
Project
implementation
Periodic independent
verification/ certification
Distribution
emission reductions
Registration Protocol
“PCF Value Chain”
Transfer
Emission
Reductions
Why would the private sector
participate in PCF?
...one or more of the following reasons....
 cost- effective way to meet Kyoto Protocol
obligations (price of $ 20-30$/T)
 reduce entry barriers to carbon market. Learn
from PCF at low cost to do your own Funds and
trades
 increase image of environmental responsibility
as a competitive tool
 profit in the secondary market
PCF will catalyze Market Development through:








Building private sector and host government confidence in
offset trade (Bank will exit market when private sector enters)
demonstrating intermediation and brokerage in mitigating risk
and lowering transaction costs
engaging major private capital in learning from PCF
experience
creating “high quality” uniform sovereign commodity
developing generic contracts, procedures, protocols
helping client countries and companies develop own “funds”
building host government market capacity
demonstrating price contracts that share risk acceptably
between buyers and sellers in uncertain early markets
Examples of Knowledge Generated






“Additionality” and Baseline determination
Validation, Certification and Verification protocols,
procedures and outcomes
sample project-based offset contracts (e.g. with
host government, project sponsor)
emerging market and risk analyses
price formation agreements (e.g methods for risk
and benefit-sharing)
Targeted seminars and workshops on PCF
experience and implications
Option Space for Climate Change Mitigation
$/Tonne
Carbon
Abated
MC
(Mini-) Hydro;
Gas; Geothm’l
Some CCT’s;
CH4 Capture;
Potential
“Win-Win”
Renewables;
DSM; Nuke (?)
200
Lowhanging
fruit
50
Pseudo“Win-Win”
The
IBRD/ $20
IDA Bill
0
Developing
Renewables;
Fuel Cells
40%
20%
80%
100%
% or Volume
Abated
Win-Win
Policy Dialogue
IBRD/IDA/BI-L
Private Cap.
GEF Lubricant
Lo-Cost
J.I./AIJ
Public-Private
Investment
Funds
High-Cost
GEF Buy-Down
OECD R,D&D
Venture Cap.
Curtailment
PCF Project Selection and Portfolio Criteria
Generic: Adhering to UNFCCC, Bank standard,
with emphasis on renewable energy projects





Broad balance between CDM and JI with initial emphasis
on CDM
Not less than 2% and no more than 10% of Fund’s assets in
one project
Not more than 20% of Fund’s assets invested in Projects in
the same host country
Not more than 10% of the Fund’s assets in forest-based
sinks (and only in EITs)
Mostly renewable energy technology - but no more than
25% of the Fund’s assets in any one technology
PCF Indicative Project Pipeline
Endorsed:
 Latvia: Liepaja Solid Waste Management
 Costa Rica: Renewable Energy Small Scale
Power
Under consideration:
 Hungary: Tatabanya Biomass Power
 Kazakhstan: Mini Hydro Power
 Uganda: Renewable Energy
Host Country Committee for the PCF
Joined
Deciding
Latvia
Russia
Discussing
Kazakhstan,
Hungary, Poland
Czech Republic,
Slovakia, Ukraine
Mexico, Costa
Rica, Guatemala
Argentina, El
Salvador, Brazil
Senegal
Togo
Egypt, South Africa Burkina Faso,
Gambia, Uganda,
Zimbabwe
PCF Status and Time Line
PCF Participants:
Governments reviewing participation: 6
Companies signed MoUs: 20
Companies reviewing participation: 30+
Key Dates:

Public Announcement - December 15, 1999

First Closing - February 2000

Organizational Meeting - February/ March 2000
Host Country Role in the PCF
–
Host country committee
•
•
•
–
Composed of those countries either signing a letter of
endorsement for a PCF project or a Memorandum of
Understanding
Provide advice and strategic guidance to the Fund
Management
Annual meetings, prior to Participants’ Meeting to provide
effective input
Observer status in Participants committee and
Participants’ meetings