Transcript No Slide Title - Carbon Finance at the World Bank

Introduction to
Climate Change and the Clean
Development Mechanism
Training Workshop: Project Formulation for the Clean
Development Mechanism
Hanoi, Vietnam
September 30 – October 2
Important Dates in the History of
Climate Change
• 1988: Toronto Conference – climate change on
policy agenda
• 1990: First International Scientific Assessment
• 1992: Signature of the UNFCCC
• 1994: UNFCCC comes into force
• 1997: Kyoto Protocol (CoP 3)
• 2001: Third International Scientific Assessment
• 2001: Marrakech Accords (CoP 7) – rules of
implementation of Kyoto Protocol adopted
IPPC Third Assessment Report
(2001)
• The Earth’s climate is warming and human
activities are primarily responsible
• Most socio-economic sectors, ecological
systems and human health will be adversely
affected by climate change, with developing
countries being the most vulnerable
• Technologies are available to reduce
greenhouse gas emissions but policies and
measures are needed to realize the
technological potential
United Nations Framework Convention
on Climate Change (UNFCCC)
• Ultimate objective of stabilizing global
greenhouse gas concentrations in the
atmosphere
• Developed countries aim to restore GHG
emissions to 1990 levels
• Support capacity building in, and facilitate
technology transfer to developing countries to
mitigate, and to adapt to climate change
• Meet as a “Conference of Parties” in the future,
consider progress
Contributions to Global Warming
The Kyoto Protocol
39 Developed Countries and Economies in Transition
• agreed to reduce greenhouse gases by 5.2 % below
1990 levels in the commitment period 2008-2012
• Reduction of greenhouse gases by 5.2 % below 1990
levels in the commitment period 2008-2012 (~2800 4800 Mt CO2, including US)
Status: Not yet in force
• Marrakech Accord: Final decision text agreed in Nov
2001
• Coming into force: requires ratification of 55 Parties to
UNFCCC representing 55 % of CO2 emissions (US
constitutes 36 %)
• Developed Countries/ EITs now considering ratification
(except the US)
AVG: 1990-5.2%
2012
GHG Emissions ton/ year for Annex B
countries
Graphical Representation of the Kyoto
Protocol
First Commitment
Period;
Which Policies and Measures can be
Implemented by Annex B Countries?
• Domestic Reductions
• Carbon Sinks
• International Credits (Kyoto Mechanisms):
– International Emissions Trading
– Project –Based: Joint Implementation
– Project – Based: Clean Development Mechanism
Supplementarity: (CoP 6 bis) “..domestic action shall
constitute a significant element of the effort by each
Party..”
The Kyoto Mechanisms: International
Emissions Trading and JI
International Emissions Trading (IET)
• Defined: trading of emission credits among developed
countries
• Russia may have large supply to sell
Joint Implementation
• Defined: credit for emission reduction investments in
Annex B countries
•
•
•
Emission credits can be accrued as of 2000, but can
only be issued/ transferred once country becomes a
Party
Nuclear in JI: Parties are to “refrain from using..”
Sinks: All activities are eligible
The Kyoto Mechanisms II: Clean
Development Mechanism
Defined: credit for emission reduction investments in
developing (non-Annex B) countries
Objectives:
•
To promote sustainable development in developing
countries
•
To assist Annex B countries in meeting their emission
reduction targets in cost-effective manner
•
Emission Reductions (ERs) must:
– Create real, measurable, and long-term benefits related to the
mitigation of climate change. (Art. 12.5b)
– Be additional to any that would occur in the absence of the
certified project activity. (Art. 12.5c)
What is Additionality?
• “Additionality” is the key eligibility criterion for
CDM projects.
– You must do something that you wouldn’t have done
without the CDM
• Interpreted as “environmental additionality”:
Emission Reductions
=
hypothetical baseline emissions
– effective (project) emissions
What are the Eligibility Requirements
for the CDM?
Developing Countries must:
• ratify the Kyoto Protocol >> to promote early
coming into force of the Protocol
• designate national CDM/JI focal point
Developed countries (Annex B) must:
• ratify the Kyoto Protocol
• be in good standing with reporting requirements
• Parties must be subject to compliance
mechanism
What are the Criteria
for CDM Projects?
• Sustainable development
– Host country criteria
– Environmental Impact Assessment
– Stakeholder consultations
• Emission reductions
– Environmental additionality
• Project viability
– Technologically proven
– Financially sound
• Host country approval
• Project validation and registration
The Clean Development Mechanism Other Key Features
•
Prompt Start: projects can already begin to generate
emission reductions
•
Simplified procedures for small projects:
–
–
–
–
Renewable Energy Projects up to 15MW
Energy efficiency with reductions of 15GWh eq./year
Other projects of less than 15,000 t/CO2 per year
To be agreed by CoP8/2003
•
Sinks in CDM: only afforestation and reforestation
•
activities are eligible
Modalities by CoP9/2004 > manage the uncertainty
•
Nuclear in CDM: Parties are to “refrain from using..”
What can the CDM do for you?
• Attract foreign investment to countries
engaged in the trading CERs
• Increase the profitability of cleaner more
efficient technology in energy, industry, and
transport sectors
• Clean up waste management operations
• Improve land-use strategies and practice
• Contribute to sustainable development of
the host country
Who can help you to develop a CDM
project?
•
•
•
•
World Bank Carbon Finance Unit
Dutch CERUPT program
Development NGOs and consultants
UN Organizations (UNDP, UNEP,
UNIDO)
• Bilateral development organizations
• Foreign companies
Questions?
http://www.prototypecarbonfund.org
http://www.ipcc.ch
http://www.unfccc.de
Annex B Countries
2008-2012 GHG Emission targets
(100 = 1990)
Australia 108
Austria
92 (87)
Belgium
92 (92.5)
Bulgaria
92
Canada
94
Croatia
95
Czech Rep. 92
Denmark
92 (79)
Estonia
92
Finland
92 (100)
France
92 (100)
Germany
92 (79)
Greece
92 (125)
Hungary
94
Iceland
110
Ireland
92 (113)
Italy
92 (93.5)
Japan
94
Latvia
92
Liechtenstein 92
Lithuania
92
Luxembourg 92 (72)
Monaco
92
Netherlands 92 (94)
New Zealand 100
Norway
101
Poland
94
Portugal
92 (127)
Romania
92
Russian Federation 100
Slovakia
92
Slovenia
92
Spain
92 (115)
Sweden
92 (104)
Switzerland
92
Ukraine
100
UK
92 (94)
USA
93
Hot Air