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UNIDO-MRI workshop report. UNIDO’s role in the UNFCCC/KP process constructed around Building Capacity to accelerate transfer of energy- efficient and.

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Presentation on theme: "UNIDO-MRI workshop report. UNIDO’s role in the UNFCCC/KP process constructed around Building Capacity to accelerate transfer of energy- efficient and."— Presentation transcript:

1 UNIDO-MRI workshop report

2 UNIDO’s role in the UNFCCC/KP process constructed around Building Capacity to accelerate transfer of energy- efficient and climate-friendly industrial technologies UNIDO engaged in: Methodology development for CDM/JI projects Capacity Building for CDM Technology Transfer Kyoto Protocol and UNIDO’s Energy Branch

3 MRI’s climate activities A Japanese private think tank established in 1970, with a wide variety of activities More than 10 years’ experience in climate-related research,with clients in both government and private sectors.

4 The workshop June 24 – 25, Tokyo, Japan (UN University) 20 speakers, 300 participants The first of its kind as a public-private partnership Focus on Asian CDM from an extensive perspective (policymakers, academia, private sector, finance sector)

5 Sessions Opening and dignitaries Session I: Keynotes Session II: The academia Session III: The financial sector Session IV: Country issues Session V: The private sector Session V: Panel discussion

6 Opening and dignitaries Mr. Carlos Magarinos (UNIDO) –“The industrial revolution requires “the capacity to deliver enough where there is too little”. Mr. Atsushi Oi (METI) –Highlighted Japan’s decision to ratify KP. –Attaining a 6% reduction is not easy for Japan, and requires transfer of technology to developing nations –METI’s recent activities. –The move is on internationally to implement CDM. Mr. Seiji Morimoto (MOFA) –The effort for common rules that include the USA; that CDM entities are not limited to governments; and the hope of using ODA in CDM.

7 Opening and dignitaries (contd.) Mr. Sozaburo Okamatsu (RIETI-CDM EB) –CDM registry planned to come into place in early 2003. –Noted that CDM is based on international equity rule in a highly transparent operation broadcast on the Web. Mr. Yoichi Kaya (Keio University) –CDM will be an indispensable tool in responding to climate change –Outlined Japan’s policy to comply with KP requirements (energy, forestry, commercial), which can turn out to be quite costly.

8 Keynotes Mr. Lu Xuedu (China) –CDM allows AI countries to invest technology and financial resources in other countries, and thereby get emission reductions. –Institutional building in China is under way. Mr. Neil Cohn (IETA) –Lack of harmonized rules may result in illiquid markets. –Trend from pre-compliance market to trading as a compliance tool. –CDM as a first bankable credit after Marrakech –US-generated credits may still have a role.

9 The academia Dr. Jusen Asuka (Tohoku University) –Domestic policy framework based on realistic and not-so- realistic assumptions: dictates no ET/taxes etc., until 2005. –Highlights importance of a trading scheme with Russia Dr. Axel Michaelowa (HWWA) –Noted Asia lagging in CDM, despite potential and the risk of FSUs banking / non-compliance. Political risk play a role. –Incentives: allowing CERs in the domestic system, exemptions from carbon taxes, careful baseline-setting.

10 The academia (contd.) Dr. Ryuji Matsuhashi (Tokyo University) –Proposal of a Japanese CERUPT –Partial securitization of projects could increase IRR Dr. Mitsutsune Yamaguchi (Keio University) –Highlighted Japan’s need to rely on Kyoto Mechanisms (but currently without government resources) –Potential contradiction of current voluntary target (by sector) and profit maximization behaviour in emissions trading (to be carried out by companies) –Case study in China

11 The financial sector Mr. Vikram Widge (IFC) –Carbon finance alone may not start projects, but it helps reduce risk. –Highlights IFC’s financing activities (hydro, methane, biomass) Mr. Ikuo Nishimura (Tepco) –PCF’s activities (23 projects, 10 agreements) –Defines carbon finance as the cost required to reduce GHGs. Dr. Josef Janssen (UNISG) –Unilateral CDM model will be more important than the bilateral CDM model, hence don’t wait for foreign resources

12 The financial sector (contd.) Mr. Junji Hatano (Mitsubishi Securities) –Demonstration of “financial additionality”most visible in difference in ROEs: thus, limiting equity can help enhance the effect of CERs on ROE. Mr. Naoki Mori (JBIC) –Pollution control and climate-related projects which account for 30 percent of the ODA loans. Loans to small-scale business, two-step loans are available. –ODA “diversion criteria” still uncertain

13 Country perspectives and TT Mr. Vute Wangwacharakul, (Thailand, EGTT member) –TT is both in KP and UNFCCC. Technological additionality. Thai CDM priorities. Transparency for full private participation, from Business counterpart to Business partner. Mr. Guillermo Balce (ACE, Indonesia) –ACE-planned power and gas interconnection of its 10 ASEAN countries by 2020 a big CDM candidate. METI and EU $ 18M fund (Energy Efficiency and Renewable Energy). More projects than investors. Ms. Jyoti Parikh (IGIDE, India) –CDM inextricably associated with TT and CB thereto. TT is both hard- and software, must include the what, which, how and why. Replicability and continuity beyond the CDM project itself. Indian criteria for SD in CDM.

14 Country perspectives(contd.) Dr. Morihiro Kurushima (NEDO, Japan) –NEDO seeks to be a pioneer for Japan in the CDM field, channeling japanese investment to CDM/JI, standardizing and diffusing technologies, perhaps with a Fund approach (A world technology bank for the environment). Cooperation sought with Multilateral and Financial institutions. Examples in Mexico & Thailand Mr. Robert Williams (UNIDO) –Elaborated on UNIDO’s activities on Methodologies, TT and Capacity Building for CDM/JI. Some examples of big projects in the energy field (Coalbed methane recovery in India, TVE, motor systems efficiency and cogeneration in China, etc).

15 The private sector Mr. Mark Trexler (Trexler and Associates) –Companies need a CC strategy. Uncertainty in the market. Clear upwards trend in prices. Sinks and additionality will be key. Acting early an advantage. Mr. Anthony DiNicola (UNOCAL) –Indonesian CDM priority of RE struggles with unsolved CDM project technicalities. Need to quickly institutionalize CDM. New geothermal projects to be CDM

16 The private sector (contd.) Mr. John Kessels (CRL Energy Ltd.) –CDM projects are inextricably associated with technology transfer and capacity building thereto. NZ attitude, consortia. IET vs. JI. CDM and the WEC crossborder projects Mr. Yuzuru Nonaka (J-Power) – Success of KP and the after-KP system depends much on the U.S. joining it. A macro analysis model shows the global target could only be achieved if there is world involvement, which makes CDM and emissions trading essential. Mr. Kuniyuki Nishimura (MRI) – JEMS simulation, MRI consulting services with private cos. ET should be actively used, measures other than least-cost.

17 Panel discussion There will be plenty of opportunities in the ASEAN region Asia is called to be much more significant for the market and the viability of CDM Asian commitment is clear to a CDM based on private transactions with limited government involvement More clarification by the EB of procedures is necessary. Criticism was voiced about the unresolved definition of additionality. Major barrier for a higher japanese private sector involvement in the CDM is lack of clarity of the rules. Carbon credits’ price and CDM “depth” would be heavily influenced by host government policy. Private/public partnership could minimize government regulation Private companies can implement CDM on their own if clear feasible procedures are set by the EB Russia flooding the market with “hot air” would be unlikely

18 Panel discussion (contd.) Need for a paradigm shift: “We have to look at the public of others” CDM’s approach in Japan is by now a restrained practical enthusiasm CDM’s degree of regulation will balance market efficiency & integrity Main actors are looking forward to a fully integrated market in the near future A lot can be learned about the complexities of CDM by doing small transactions Academic institutions and international organizations can help business sectors understand how to operate the CDM with economic rationality Also, partnership between public and private sectors is a good approach to the problem of how to apply the global market mechanism of CDM from one country to another.

19 Full report available from the following URL: Other information can be requested from

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