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FOCUS: MITIGATION A glance at post-kyoto Louis Perroy, ClimatEkos 1 September 2011, Vientiane, Lao PDR.

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Presentation on theme: "FOCUS: MITIGATION A glance at post-kyoto Louis Perroy, ClimatEkos 1 September 2011, Vientiane, Lao PDR."— Presentation transcript:

1 FOCUS: MITIGATION A glance at post-kyoto Louis Perroy, ClimatEkos 1 September 2011, Vientiane, Lao PDR

2 MITIGATION A glance at post-kyoto Programmatic CDM (Programme Of Activities-POA) Nationally Appropriate Mitigation Actions (NAMAs) Programmatic CDM to NAMAs Green Fund

3 Programmatic CDM Traditional CDM: A project by project approach Emission reductions –from single project activities –in single locations –in certain sectors –in star countries Many sectors + countries have significant potential untapped Little or no effect on the carbon intensity of the economy Little or no sustainable benefits for many projects How to make the CDM incentivise GHG emissions reductions throughout entire sectors or large areas? What is pCDM?

4 Programmatic CDM pCDM: One programme + numerous project activities Traditional CDM: One CDM project activity What is pCDM? Framework/ programme GHG reducing actions

5 Programmatic CDM pCDM examples PoA >voluntary coordinated action by a private or public entity which coordinates and implements any policy/measure or stated goal (i.e. incentive schemes and voluntary programmes) CPA > unlimited number of CDM Programme Activities EB47 An 29 (version 3) Obvious and typical examples: Efficient lighting programme Fuel switching programme in industrial facilities Solar water heaters in businesses / households Landfill programme Greenfield electrification programme And a lot more… Installation of (compact fluorescent light) CFLs in a group of households Fuel switch in one facility Installation of a group of solar water heaters Landfill gas flaring in one landfill New biomass generator

6 Programmatic CDM pCDM terminology pCDM = Programmatic CDM PoA = Programme of Activities (most commonly used term for the whole concept) CPA = CDM Programme Activity (a project activities implemented under the Programme) CDM-PoA-DD = Programme of Activities Design Document CDM-CPA-DD = CDM Programme Activity Design Document

7 Programmatic CDM Single ProjectBundle of ProjectsProgrammatic Single locationMultiple locationsMultiple locations, across countries Single project participant (PP) Multiple PPs possible 1 project activity (PA) at a time A number of activities submitted as 1 PA at a time A number of activities (CDM PA = CPA) submitted as a coherent groups Project does not change over time Composition does not change over time An unlimited number of CPAs can be added to the PoA within 28 years PP known prior to registration of project At least one PP is known prior to registration, rest join later 1 crediting periodUniform crediting period for all activities Each CPA has its own crediting period

8 Programmatic CDM Why is pCDM so exciting? Flexibility –Validation + registration of the PoA, along with one sample CPA –Addition of CPAs over time, without validation or new LoAs (“consistency check”)  No need to know the composition + magnitude of the project ex-ante  Decreased registration time + transaction costs – see next slides New opportunities –In underrepresented sectors (esp. where ERs are dispersed in space and time + low ERs/unit  small projects can make big PoAs ) – see next slides –In underrepresented countries – see next slides Allows for replication of successful projects Step towards NAMAs and sectoral mechanisms

9 Programmatic CDM Opportunity 1: Extend CDM to micro-activities PoAs are ideal for CFLs, solar water heaters, cook stoves, household biogas, distributed energy, etc. Registered PoAs can generate recurring revenues to reduce need for working capital  Over 50% of PoAs in validation cover household sector (<<1% for stand-alone CDM projects)  To date only modest private sector activity in this segment

10 Opportunity 2: Bankable CERs under a PoA Stand-alone RE projects >2.5 ys until CDM revenues Perceived high registration risk  CERs are not bankable at financial closure Under registered RE PoA ~15 months until CDM revenues Low inclusion risk  CERs become bankable at financial closure Project Developer Forum | UNFCCC Technical Workshop, Kiev ??Programmatic CDM

11 REDUCING EMISSIONS - VER TRANSACTION Programmatic CDM in the region Project nameLocationStatus Installing Solar Water Heating SystemsSouthern VietnamAt Validation Small Scale Livestock Waste Management Program ThailandAt Validation Sustainable Small HydropowerVietnamAt Validation Renewable Energy Development Program (REDP), hydro, wind, biomass VietnamAt Validation National Biogas ProgrammeVietnamAt Validation Green Brick Development INTRACOVietnamAt Validation Biomass Power Development ProgrammeThailandAt Validation small scale biomass power generation at Mae Lee Forest Plantation ThailandAt Validation energy efficiency improvement for street lightings ThailandAt Validation

12 Nationally Appropriate Mitigation Actions (NAMAs) Voluntary activities for emission mitigation in countries not subject to reduction commitments and another step towards increased mitigation efforts from the developing nations. Twofold objective: –Developed countries promise technical and financial support for related programmes, whereas –developing countries are requested to develop and implement mitigation actions, usually for a whole sector. This can also be seen as. NAMAs can supplement or incorporate carbon finance activities such as CDM projects, with the practical implications of how to do monitoring, reporting and verification (MRV). )

13 Nationally Appropriate Mitigation Actions (NAMAs) NAMAs distinguish between three different types: 1- Unilateral NAMAs: mitigation actions independently funded and carried out by developing countries. 2- Supported NAMAs: climate protection measures in developing countries are supported by technical assistance and / or direct funding from Annex I countries. 3- Credited NAMAs: climate protection measures in developing countries that generate certified emission reduction credits to be sold on the international market. This type is similar to sectoral mechanism. There is a need to consider which category would suit a given country, and whether a gradual and stepwise approach could be applied progressing from supported to credited to unilateral NAMAs. Advanced developing countries or economies in transition could potentially directly start with credited NAMAs.

14 Step towards NAMAs & sect. mechanisms PoAs establish operational features of NAMA, e.g. –Project identification & inclusion –Program finance –Carbon incentives for individual sites –Monitoring, reporting verification (MRV) Implications for Governments:  Identify national development / GHG mitigation priorities that can be implemented through PoAs  Promote PoAs to learn how to address NAMA challenges  Experiment with implementation models (public, private or PPPs) Programmatic CDM to NAMAs

15 Thank You! Louis Perroy Senior Partner and CFO ClimatEkos


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