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TENTH PLENARY MEETING OF THE LEADING GROUP ON INNOVATIVE FINANCING FOR DEVELOPMENT MADRID, FEBRUARY 27, 2012 The Yasuni ITT Initiative and Net Avoided.

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Presentation on theme: "TENTH PLENARY MEETING OF THE LEADING GROUP ON INNOVATIVE FINANCING FOR DEVELOPMENT MADRID, FEBRUARY 27, 2012 The Yasuni ITT Initiative and Net Avoided."— Presentation transcript:

1 TENTH PLENARY MEETING OF THE LEADING GROUP ON INNOVATIVE FINANCING FOR DEVELOPMENT MADRID, FEBRUARY 27, 2012 The Yasuni ITT Initiative and Net Avoided Emissions 1

2 2 Yasuni National Park Biodiversity Non-contacted Indigenous Communities Reserves of crude oil

3 3 Management Alternatives for Yasuni National Park: Multicriteria Analysis Results Análisis Multicriterio de la Iniciativa Yasuní ITT. María Cristina Vallejo et Al. (Programa Yasuní) DOWNLOAD PDF : http://www.ambiente.gob.ec/sites/default/files/users/dvelalcazar/ANALISIS_MULTICRITERIO_YITT.pdf Ranking of Alternatives: A= Yasuni ITT B TT = Exploitation Scenario 1 B ITT = Exploitation Scenario 2

4 4 Management Alternatives for Yasuni National Park: Multicriteria Analysis Results Análisis Multicriterio de la Iniciativa Yasuní ITT. María Cristina Vallejo et Al. (Programa Yasuní) http://www.ambiente.gob.ec/sites/default/files/users/dvelalcazar/ANALISIS_MULTICRITERIO_YITT.pdf Opportunity Cost:

5 5 The Yasuni – ITT Initiative International Compensation: $3,600 million dollars in 13 years Barrels of oil underground: 840 million Net Avoided Emissions: 407 million tons CO 2 eq Biodiversity protection Respect of the Rights of Indigenous Peoples Transition to «good- living» (buen vivir) and Rights of Nature Support Yasuni (UNDP Fund): mdtf.undp.org/yasuni

6 6 What is Net Avoided Emissions (NAE)? Mechanism of Synergies for the fullfilment of Multiple Objectives in the framework of sustainable development New climate change market and non-market (bilateral) mitigation mechanism, sectorial crediting mechanism (compliance with ex ante baseline setting) Avoidance of Green House Gas Emissions (GHG) considering all possible economic activities that a developing country can be undertaking at the moment when the country decides to apply the mechanism. Economic value associated to the environmental service of avoiding emissions, equivalente to the market price of total tons of CO2eq avoided. Supplementary to domestic actions undertaken by developed countries to fulfull their mitigation commitments. Presented at the Conference of the Parties N° 16 of Climate Change by the Ecuadorian President (December 2010)

7 7 «Net Avoided Emissions» (NAE) Objectives: Establishment of Synergies Synergies for the fulfilment of Multiple Objectives in the framework of Sustainable Development Climate Change Mitigation Development Financing Climate Change Biodiversity Desertification Indigenous peoples Incentives and fulfilment of mitigation commitments Real net reduction of total global net GHG emissions Compensation for developing countries (Mitigation and Adaptation) Technology Transfer

8 8 NAE at the United Nations Framework Convention on Climate Change (UNFCCC) 80. Decides to consider the establishment, at the seventeenth session of the Conference of the Parties, of one or more market-based mechanisms to enhance the cost-effectiveness of, and to promote, mitigation actions, taking into account the following: (e) Ensuring a net decrease and/or avoidance of global greenhouse gas emissions» (1/CP.16) UNFCCC Conference of the Parties N° 16 (Cancun, 2010) «79. Emphasizes that various approaches, including opportunities for using markets, to enhance the cost-effectiveness of, and to promote, mitigation actions, bearing in mind different circumstances of developed and developing countries, must meet standards that deliver real, permanent, additional and verified mitigation outcomes, avoid double counting of effort, and achieve a net decrease and/or avoidance of greenhouse gas emissions (Draft decision [- /CP.17] AWG-LCA) UNFCCC Conference of the Parties N° 17 (Durban, 2011)

9 9 Mechanism design: Governance Independent Mechanisms (Bilateral, Regional) Mechanisms under the United Nations Framework Convention on Climate Change «NAE» Hybrid Mechanism: Under UN supervision, with higher host country participation

10 10 Mechanism design: Cost-effectiveness The Yasuni-ITT Initiative: enhancing cost-effectiveness of, and promoting, mitigation actions, Document for UNFCCC: -Views on the evaluation of various approaches in enhancing the cost-effectiveness of, and promoting, mitigation actions Submissions from Parties (7 April 2011) - Submission from Ecuador Mitigation actions in Ecuador (Land-use sector) Region/ Country Cost (USD/CO 2 eq ton) Source Yasuni-ITTEcuador$0,015 – $0,02 Submissions Form Parties (07/April/11) Yasuni ITT Cost-Effectiveness (Ecuador), UNFCCC Socio Bosque (sim. REDD)Ecuador$0,24Ortega-Pacheco et al. (2010) PROFAFOR (sim. MDL)Ecuador$1,42Wunder and Alban (2008) Offsets ForestsEcuador$1,22Antinori and Sathaye (2007) Offsets ForestsGlobal$0,38Antinori and Sathaye (2007) 1,4% cost/CDM ton CO2eq

11 11 Mechanism design: Safeguards Use of funds for Mitigation and Adaptation Activities Compensation for the environmental service provided (not for the opportunity cost) Implementation in developing countries

12 12 Mechanism design: Advantages with regards to existing mechanisms Real reduction of the global level of emissions in the long term Use of existing institucionality Greater host country participation Development of methodologies for baselines per sector, etc. based on existing experiences Bilateral or Market compensation Equity and sovereignty in benefit distribution Net Avoided Emissions

13 13 Mechanism design: Environmental Integrity (efficacy) Perma- nence and Leakage Reflected in the long term (Guarantee certificates, limited resource stock) Leakages control Additio- nality Baselines per sector Clear definition of scope Host country participation Verifica- tion -International standards -Institutional arrangements (UN board, national committee)

14 14 Expected Outcomes for 2012 2012-2015 CoP Climate Change (UNFCCC) Discussion on Modalities and Procedures (2012) Pilot schemes (post-2012) Mechanism operationalization (post- 2012)

15 15 THANK YOU Analiz Vergara Environment and Climate Change Division Ministry of Foreign Affairs, Trade and Integration Quito, Ecuador t-avergara@mmrree.gob.ec medioambiente@mmrree.gob.ec Ecuadorian Embassy in Spain embajada@mecuador.es Min. Germán Espinoza: ministro@mecuador.esministro@mecuador.es

16 16 Annex 1: The Yasuni ITT Initiative - Deforestation Component The Yasuni-ITT Initiative: enhancing cost-effectiveness of, and promoting, mitigation actions, Document for UNFCCC: -Views on the evaluation of various approaches in enhancing the cost-effectiveness of, and promoting, mitigation actions Submissions from Parties (7 April 2011) - Submission from Ecuador

17 17 Anex 2: Cost-effectiveness of mitigation actions in Ecuador (Land-use sector) NPV (desc. Rate 6%) NPV (desc. Rate 12%) TypeActivity Emissions (millon ton CO2eq) Cost (million USD) Cost (USD/ton CO2eq) Cost (million USD) Cost (USD/ton CO2eq) Yasuni-ITT Programmatic/ avoidance Oil extration40720,780,01718,380,015 Deforestation (máx.) 82024,530,0221,850,018 Socio-Bosque Proyects/ secuestration Deforestation26,97,90,247,90,24 PROFAFORCDM-likeReforestation2,236,540,586,540,58 The Yasuni-ITT Initiative: enhancing cost-effectiveness of, and promoting, mitigation actions, Document for UNFCCC: -Views on the evaluation of various approaches in enhancing the cost-effectiveness of, and promoting, mitigation actions Submissions from Parties (7 April 2011) - Submission from Ecuador


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