1. Spanish Policy on flexible mechanisms
Rebeca Sainz
Spanish Climate Change Bureau
Ministry of Environment
JI WS, Bonn February 2007

2. INDEX
1. Spain – Basic compliance scenario & strategy.
2. Spanish Instruments.
3. Views on JI.
4. Other Initiatives.
5. Conclusions.

3. Basic COMPLIANCE SCENARIO AND STRATEGY
+ 24% of 1990 emissions RD 1866/2004, NAP
+ 15% Kyoto Protocol objective
+ 2% LULUCF activities
+ 7% International credits = 100Mt
+ 37 % 1990 emissions
NAP 2 ( )
+20 % International credits =
289 Mt CO2

4. The Kyoto target would be reached jointly.
Overall strategy
The Kyoto target would be reached jointly.
Overall strategy to use the Kyoto Protocol Flexible mechanisms:
Establishment of the institutional framework.
Design of a multilateral and bilateral approach
with NAI and AI countries.
Evaluation of the existing financial tools for
the acquisition of credits.
Enhancement of cooperation with private sector and financial institutions.

5. INSTITUTIONAL ARRANGEMENTS
SPANISH INSTRUMENTS
INSTITUTIONAL ARRANGEMENTS
Law 1/2005, 9 march, transpose Directive 2003/87/EC and Linking Directive
Establishment of the DNA (CDM & JI)
Procedure
Def. and recognition of international credits
INTERNATIONAL COOPERATION AND PUBLIC SECTOR PARTICIPATION
Establishment “Iberoamerican Climate Change Network (RIOCC).” 21 countries
Signature of MOUs with 19 host countries : Argentina, Brasil, Colombia, Morocco, Mexico, Panama, Uruguay, Dominican Republic, Bolivia, Ecuador, Chile, Costa Rica, Paraguay, Guatemala, Peru, Honduras, El Salvador, Nicaragua and China.
Some more under negotiation

6. FINANCIAL INSTRUMENTS
Agreement for 40 Mt (205 M €)
Spanish Carbon Fund (34 MT)
+ 50 M € Open to private sector (installations under the Law 1/2005)
BioCarbon Fund (2MT)
Participation CDCF (4MT)
CF Assist (5M€).
Priorities: Renewables, energy efficiency, waste management.
Agreement for 9 Mt CO2 :
Iberoamerican Initiative for Carbon
Purchase will be held in credits through CDM projects exclusively in the Latin America and Caribbean region.

7. FINANCIAL INSTRUMENTS
Multilateral Carbon Credit Fund
35 mill. € (~ 42% sovereign window)
What? ERUs, CERs, EUAs
Where? Countries in transition
GIS window: under consideration
Asia Pacific Carbon Fund
30 mill. USD
CERs
Asia- Pacific Region

8. Views on JI Room for the 3 market based mechanisms!!  JI
- Incredible Take off!! ( Thank you, JISC!)Institutional framework settle down
- Technology transfer
- ERU market has a lot of potential (Russia, Ukraine)
- A lot of potential in non EU ETS sectors
but,
- higher delivery risks.
- higher transaction costs (Vs ETS).
- until now, higher uncertainty (Vs CDM)
There is a future for JI!:
non-CO2 gases, LULUCF

9. JI Eligibility requirements:
Views on JI
JI Eligibility requirements:
Focal point designated - Interministerial Committee.
National guidelines: under development (RD).
Investing in JI
Through multilateral financial institutions (WB, MCCF)
Priority projects: Renewable energy, energy efficiency, waste management.
Bilaterally: Several MOUs in progress

10. Other initiatives Supporting initiatives under JI.
(through contributions to JISC).
Technical cooperation programmes.
Cross-cutting instruments to promote investments in JI & CDM:
- Viability Study funds
- Consultancy funds.
- Financing lines, Credit lines
Other multilateral Funds.
Increasing bilateral relationships with host countries (through bilateral agreements)
Debt conversion agreements: new clause related to Kyoto Protocol (Ecuador and Uruguay).
GIS, also a good complement.

11. Room for 3 market based mechanisms: make the best of each of them.
Final thoughts
Room for 3 market based mechanisms: make the best of each of them.
Project-based transactions are essential for the evolution to low-carbon economies
JI should evolve applying the lessons learnt from CDM.
Rules are now there: time to make JI “practically” happen.

12. Thank you for your attention !
For additional information
 Spanish Climate Change Bureau
 Rebeca Sainz