Capacity Development for the Clean Development Mechanism in the PHILIPPINES REVISED WORK PLAN Asian Regional Workshop 16 th January 2003 Phuket, Thailand

Outline of the presentation 1. Overview of the Revised Work Plan 2. Tasks of the Work Plan 3. Issues of Concern

Overview of the Revised Work Plan Five Tasks I. Conduct information campaign and awareness raising II. Strengthen the capacity of policy-makers III. Establish the institutional framework for the CDM IV. Strengthen the capacity of private and public sector players V. Create a pipeline of CDM Projects

Overview of the Revised Work Plan Subtasks of Task II: Strengthen the capacity of policy- makers II.1Generate the interest and support of senior policy-makers II.2Develop the capacity of mid-level policy-makers

Overview of the Revised Work Plan Subtasks of Task III: Establish the institutional framework for the CDM III.1Establish the CDM National Authority III.2 Develop the capacity of the CDM National Authority

Overview of the Revised Work Plan Subtasks of Task IV: Strengthen the capacity of private and public sector players IV.1Develop the capacity of project developers IV.2Develop the capacity of project financiers IV.3Develop the capacity of NGOs, local communities, national research institutions and academe

Overview of the Revised Work Plan Subtasks of Task V: Create a pipeline of CDM projects V.1Establish a CDM promotions office V.2Facilitate the development of CDM-eligible projects

Overview of the Revised Work Plan  For each Task Objective Indicator Expected Outputs  For each Output List of Activities  For each Activity Purpose Beneficiaries Inputs Outputs Timeline

ActivitiesPurposeTargetInputsOutputs Task 1: Conduct Information Campaign and Awareness Raising Beneficiaries 1.1 Identify relevant stakeholders To design specific information materials and consultation forum List of relevant stakeholders 1.2Formulate a strategy for awareness- raising To design a strategy for awareness raising tailor fitted to the different stakeholders in the country Identified stakeholders List of relevant stakeholders; Background information on the stakeholders A tailor –fitted strategy for each of the identified stakeholders 1.3Prepare information materials (e.g. primers, brochures, general guidebooks) according to the target beneficiary To disseminate information regarding CDM; To serve as a guide for stakeholders wanting to participate in CDM Community leaders, project proponents, project developers, investors, general public Information on CDM, applicable government policies and guidelines, financing guidelines Information materials and guidebooks 1.4 Prepare a brief promotional document that outlines and promotes the national values and benefits of participation in the CDM To sensitize senior and mid-level policy makers on the values and benefits of participation in the CDM Senior and mid- level policy makers Research, data gathering on the benefits and values associated with CDM Promotional document that contains relevant information on the national values and benefits of CDM

Task I: Conduct information campaign and awareness raising  Objective: Sensitize relevant stakeholders on the benefits of CDM and encourage their participation  Indicator: Agreement by relevant stakeholders to participate in a CDM capacity building program

Task I: Conduct information campaign and awareness raising Some proposed outputs/activities  Information materials (e.g., primers, brochures, guidebooks)  Public briefings, roundtable discussions  Philippine CDM website

Task II.1: Generate the interest and support of senior policy-makers  Objective: Sensitize senior level policy-makers on the benefits of the CDM and generate their support  Indicator: Emergence of CDM Champions -- senior government officials who support a CDM capacity building program

Task II.1: Generate the interest and support of senior policy-makers Some proposed outputs/activities  Briefing kits on CDM  Executive briefings for senior policy- makers  Action planning with senior policy- makers on CDM capacity building

Task II.2 Develop the capacity of mid- level policy-makers  Objective: Develop the capacity among mid-level policy makers to formulate a regulatory (legal, financial, technical) framework for CDM  Indicator: Existence of a cadre of mid- level government officials to support the CDM operational framework

Task II.2 Develop the capacity of mid- level policy-makers Some proposed outputs/activities  Capacity assessments of key departments and agencies  Training materials on regulatory, technical & legal requirements  Workshops for formulating CDM framework which is transparent, stream- lined, fast-track, cost-effective  Trainer’s training

Task III.1 Establish the CDM National Authority  Specific project on establishing the CDM National Authority in the Philippines  Project conducted by the Inter-Agency Committee on Climate Change  Sponsored by UNDP and funded by the Dutch Government

Task III.1 Establish the CDM National Authority  Need to coordinate closely with UNDP project to establish CDM National Authority  Avoid overlaps  Maximize the synergies between UNEP and UNDP projects  Fill the capacity building gaps in the UNDP project

Task III.2 Develop the capacity of the CDM National Authority  Objective: Support the establishment of a national and institutional framework to assess and validate CDM projects.  Indicator: Existence of a functioning CDM National Authority that validates CDM projects using national and international guidelines

Task III.2 Develop the capacity of the CDM National Authority Some proposed outputs/activities  Technical assistance to NA for defining regulatory, legal, technical and financial guidelines  Technical assistance to NA for setting clearly defined national, sectoral and project baseline parameters  Training workshops for NA staff

Task IV.1 Develop the capacity of project developers  Objective: Strengthen the capabilities of private and public sector, big and small scale project developers to identify, formulate, develop and implement CDM projects  Indicator: Existence of project developers who are active in developing and implementing CDM projects

Task IV.1 Develop the capacity of project developers Some proposed outputs/activities  Seminars and Workshops CDM Operational Framework Project Design Document Baseline formulation GHG accounting Monitoring plan formulation CDM financial packaging

Task IV.2 Develop the capacity of project financiers  Objective: Strengthen the capabilities of the financial sector to identify and provide financing to CDM projects  Indicator: Existence of financial sector players who are active in identifying, brokering, financing CDM projects

Task IV.2 Develop the capacity of project financiers Some proposed outputs/activities  Seminars on CDM opportunities for the financial sector  Forums on the range of funding sources for CDM projects  Forums on the range of financial schemes and packages for CDM projects

Task IV.3 Develop the capacity of NGOs, local communities, national research institutions and academe  Objective: Strengthen the capabilities of NGOs, local communities, research institutions to assist in the development and implementation of CDM projects  Indicator: Existence of players who can assist and facilitate the development and implementation of CDM projects

Task IV.3 Develop the capacity of NGOs, local communities, national research institutions and academe Some proposed outputs/activities  Consultations with local communities on cleaner technologies  Seminars/Workshops CDM Project Cycle GHG Accounting Monitoring plans  Commission research on analytical issues (e.g. baselines, financial mechanisms, etc)

Task V.1 Establish a CDM promotions office  Objective: Support the establishment of an office that promotes CDM in the Philippines  Indicator: Existence of a CDM promotions office that serves as a link among private, public, financial sectors, domestic and international

Task V.1 Establish a CDM promotions office Some proposed outputs/activities  CDM Investment Guide  CDM Market Forums (National & Asian)  Assistance for feasibility studies  CDM Investment Missions

Task V.2 Facilitate the development of CDM-eligible projects  Objective: Facilitate the development of a pipeline of CDM-eligible projects that are attractive to potential CDM investors and approved by the CDM National Authority  Indicator: Lists of CDM-eligible projects that have been nationally endorsed and validated; of investments made in CDM projects

Task V.2 Facilitate the development of CDM-eligible projects  Developing an actual CDM project as the best way of building capacity Some proposed outputs/activities  Portfolios of validated CDM-eligible projects  Directory of funding sources for CDM-eligible projects

Issues of Concern  CDM National Authority Inter-Agency Committee on Climate Change as an Interim NA? Multi-Agency? or Single Agency? Representation from Private Sector? NGOs? Solely Regulatory? or Regulatory + Promotional? Legal mandate: by Presidential Administrative Order? or by Act of Congress? Board: Overseer? or Executive?

Issues of Concern Plans for CDM National Authority  Officially designate IACCC as NA  Strengthen the IACCC Expansion of membership of Government Agencies (e.g., Department of Finance?) Inclusion of Private Sector representatives

Issues of Concern  How to make Regulatory Framework Transparent Streamlined Fast-track Cost-effective

Issues of Concern  High costs of developing CDM-eligible projects  The PCF Experience -- $265K Preparation and review ($50K) Baseline study ($30K) and Monitoring plan ($25K) Validation process ($55K) Negotiation of project agreements ($105K)

Preparation and review of the Project Baseline Study and Monitoring Plan (MP) Validation process Negotiation of Project Agreements Periodic verification & certification Construction and start up Project completion 3 months 2 months 3 months 1-3 years Up to 21 years Upstream Due Diligence, carbon risk assessment and documentation: $ 50K Baseline : $30 K Monitoring Plan: $25K External consultant: $25K Processing and documentation: $30k Consultation and Appraisal: $75K Negotiations and Legal documentation: $30K Carbon Asset Creation and Maintenance Costs The PCF Experience Total through Negotiations All expenses: $265 K Initial verification at start-up: $25K Verification: $10-25 K Supervision: $10-20K

Issues of Concern  Too high costs of Validation and Certification Because Designated Operational Entities (DOEs) would most likely be external and foreign-based Domestic agencies are severely handicapped in becoming DOEs

Issues of Concern  Small-scale projects severely handicapped E.g., Micro-hydro, Solar-PV, Small energy efficiency projects Too small and Aggregation may be too difficult Too expensive to make them CDM-eligible Unattractive to CER buyers  Conflicts between sustainable development objectives (met by small- scale projects) and generation of CERs

Issues of Concern  ODA-funded renewable energy projects Ineligible for CDM? But most of the small-scale renewable energy projects are ODA-funded  These types of projects are not very attractive in private investors

Issues of Concern  Formal definition of roles and relationships between project implementers of CD4CDM Focal Point Agency: Inter-Agency Committee on Climate Change National Institution: Climate Change Information Center CDM Task Force

UNEP (UCCEE) IACCC (National CC Focal Point and Focal Point Agency) CCIC (National Institution) (MOU) CONTRACT (MOU) AIT (Regional Center) CONTRACT CDM promotions office CDM National Authority (DNA) UNDP- Dutch Relationship between institutions in the project UCCEE = UNEP Collaborating Centre on Energy and Environment AIT = Asian Institute of Technology IACCC = Inter-Agency Committee on Climate Change CCIC = Climate Change Information Center

Issues of Concern: Finalize the Work Plan  Need to prioritize the Five Tasks in this CD4CDM Project Considering the capacity building needs of stakeholders Considering the constraints of the financial and human resources Considering the other programs of capacity building (e.g., UNDP, Japanese agencies, etc.)

Issues of Concern: Finalize the Work Plan  Measurable quantification of activities and outputs for CD4CDM project E.g. Number of Seminars, Trainings, Conferences, Information materials  Streamline and rationalize the Timeline to make the project feasible to implement

Thank You!  Inter-Agency Committee on Climate Change (IACCC) Secretariat, Environmental Management Bureau, Department of Environment and Natural Resources Tel  Climate Change Information Center (CCIC) Manila Observatory, Ateneo de Manila University Tel ; Fax