1. CLEAN DEVELOPMENT MECHANISM: OPPORTUNITIES FOR THE PHILIPPINES Climate Change Information Center Manila Observatory Ateneo de Manila University

2. OUTLINE Introduction to Climate Change
The UNFCCC and the Kyoto Protocol
The Clean Development Mechanism

3. MODULE 1 Introduction to Climate Change

4. Rising temperatures results in changing weather patterns
Melting polar caps, glaciers
Shifts in weather patterns
Increased occurrence of dramatic weather such as hurricanes
Historic Temperature Data

5. Slide: taken from the web and modified

6. Philippine Rice Production. Arrows indicate El Niño events
Philippine Rice Production. Arrows indicate El Niño events. (source: Food and Agricultural Organization)

7. Vulnerability information systems
El Nino and La Nina are extreme phases of naturally occuring climate cycle referred to as the El Nino Southern Oscillation (ENSO). Both terms refer to large-scale changes in sea-surface temperature across the eastern tropical Pacific. Usually, sea-surface readings off South America's west coast range from deg F (16-21 deg C), while they exceed 80 deg F (27 deg C) in the "warm pool" located in the central and western Pacific. This warm pool expands to cover the tropics during El Nino, but during La Nina, the easterly trade winds strengthen and the cold upwelling along the equator and the West coast of South America intensifies. Sea-surface temperatures along the equator can fall as much as 7 deg F (-14 dg C) below normal.
El Nino and La Nina conditions recur every few years and can persist for as long as two years.
(source:
Sources:
- Base Map with Administrative Boundaries (UTM Projection), NAMRIA
- Field Information Manual on El Nino July 1997, BSWM
Philippine Statistical Yearbook, NSO
- El Nino and La Nina Definition, NOAA
Methodology:
Degree of Vulnerability of El Nino and La Nina based on PAGASA's Climate Map, slope, flooding and elevation.
Note to Users:
This map is version 1.0 and is under development. The Manila Observatory would
appreciate feedback on the veracity of spatial data.
Manila Observatory
Support for Greenhouse Gas Inventory
Philippine Climate Change Program Development, 1999
El Niño - La Niña Vulnerability Map
Support for Greenhouse Gas Inventory

8. Sea level rise 3D modeling and visualization tools are used for
vulnerability assessment, exact location and quantification of areas which are susceptible to floods due to rise in sea level.
Study area: Northern part of Navotas, Metro Manila

9. Climate Change
Climate change is caused by both natural events (like volcanic eruptions) and human activities

10. Temperature change (oC)
Atmospheric CO2 Concentration and Temperature Change
Thousands of Years ago
Temperature change (oC)
Carbon dioxide (ppmv)
Slide modified from Whitehouse webpage

11. Human Sources of GHGs Transportation Land Use: Agriculture & Forestry
Carbon Dioxide (CO2) – Most prevalent GHG
Methane (CH4) – Second most common, 21x the potency of CO2
Nitrous Oxide (N2O) – 310x the potency of CO2
Other Gases – HFCs, PFCs, and SF6 = range 600 – 23900x potency of CO2
Transportation
Land Use:
Agriculture & Forestry
Energy Generation
Industrial Processes

12. GHG and Environmental Impacts
Changes in temperature, weather patterns and sea level rise
Human Health:
Weather related mortality
Infectious disease
Air quality - respiratory illness
Coastal Areas:
Erosion and flooding
Inundation
Change in wetlands
Water Resources:
Changes in water supply
and water quality
Competition/Trans-border Issues
Agriculture:
Changes in crop yields
Irrigation demands,
Productivity
Forests:
Change in Ecologies,
Geographic range of species, and
Health and productivity
Industry and Energy:
Changes in Energy demand
Product demand & Supply

13. Philippine GHG Inventory

14. Philippine LUCF GHG Emissions

15. MODULE 2 THE UNFCCC and the KYOTO PROTOCOL

16. United Nations Framework Convention on Climate Change
Objective of the Convention
“Stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved within a time frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened, and to enable economic development to proceed in a sustainable manner.”

17. Division of Parties by Annex
Annex I
Annex II
Australia / Austria / Belgium / Canada / Denmark / EC / Finland / France / Germany / Greece /Iceland / Ireland / Italy / Japan / Luxembourg / Netherlands / New Zealand / Norway / Portugal / Spain / Sweden / Switzerland / Turkey / United Kingdom / USA
Belarus / Bulgaria / Croatia / Czech Republic / Estonia / Hungary / Latvia / Liechtenstein / Lithuania / Monaco / Poland / Romania / Russian Federation / Slovakia / Slovenia / Ukraine
Non-Annex I Countries = All the Rest of Ratifying Countries

18. United Nations Framework Convention on Climate Change
Commitments by the Parties to the Convention
Parties have common but differentiated responsibilities.

19. United Nations Framework Convention on Climate Change
Commom Responsibilities to the Convention
All Parties will:
Submit national communications that contain inventories of GHG sources and sinks and a description of steps to implement the Convention based upon differentiated commitments;
Promote development and transfer of technologies and practices;
Cooperate in sustainable management, conservation and enhancement of GHG sinks and reservoirs (i.e., forests and oceans);
Take climate change consideration into account in social, economic, and environmental policies;

20. United Nations Framework Convention on Climate Change
Differentiated Commitments: Non-Annex I Parties
Non-Annex I Parties to the Convention are primarily developing countries.
Need to submit national communications (agreed full costs of preparation will be provided).
On a voluntary basis, propose mitigation and adaptation measures and projects. The incremental costs of implementing these projects may also be requested.
Developing countries may also request technical and financial assistance to strengthen their human and institutional capacity to implement the Convention.

21. United Nations Framework Convention on Climate Change
Differentiated Commitments
Annex I Parties (OECD countries and countries that are undergoing the process of transition to a market economy) are committed to adopting policies and measures that will reduce their GHG emissions to earlier levels.
Annex II Parties (OECD countries) must provide new and additional financial resources in order for developing countries to implement the Convention.
Annex II Parties will also promote and finance the transfer of environmentally sound technologies, particularly for developing countries.

22. Kyoto Protocol
The overall emission reduction target for Annex I Parties as a group is at least 5 percent below 1990 levels, to be achieved by the commitment period 2008 to 2012 (an average over the five years).
The Protocol covers six greenhouse gases (Annex A) - CO2, CH4, N2O, HFCs, PFCs, SF6
The negotiated targets for individual Annex I Parties are included in Annex B of the Protocol.
Carbon dioxide
methane
nitrous oxide
hydrofluorocarbons
perfluorocarbons
sulfur hexafluoride

23. Selected Quantified Emission Limitation (%)
Industrialized Countries
Australia 108
Canada 94
EC bubble 92
(Germany 75)
(Portugal 140)
Japan 94
Norway 101
New Zealand 100
USA ???
Economies in Transition
Bulgaria 92
Baltics 92
Croatia 95
Czech Republic 92
Hungary 94
Poland 94
Romania 92
Russia 100
Ukraine 100

24. Kyoto Protocol
The Kyoto Protocol was adopted at COP-3 in December, 1997, in accordance with “Berlin Mandate” of COP-1.
The Protocol will enter into force when not less than 55 Parties to the Convention, accounting for at least 55 percent of the 1990 total CO2 emissions of the Annex 1 Parties, have ratified the Protocol.
US: 34%; Russia: 16%; Japan: 8% ;EU: 23%;
Other Annex 1 Parties 19%

25. Kyoto Protocol
As of 24 February 2003, 179 Parties have signed the Kyoto Protocol and 105 have ratified (minimum required– 55 countries).
Of the Annex I countries who have ratified, 43.9% of 1990 emissions are accounted for.
To enter into force, the Protocol requires the ratification by Russia with 16% of 1990 emissions to meet the required 55%.
The Philippines has signed but not yet ratified the Kyoto Protocol

26. Kyoto Protocol Flexibility Mechanisms
Joint Implementation (Article 6) - fulfillment of emissions limitation and reduction commitments jointly among Annex I Parties.
Emissions Trading (Article 17) between Annex I countries to fulfill their reduction commitments. Any such trading shall be supplemental to domestic actions.
Clean Development Mechanism (Article 12) - to assist Parties not included in Annex I in achieving sustainable development and to assist Annex I countries in achieving compliance with their emission reduction commitments.

27. Kyoto Protocol ARGUMENTS FOR THE FLEXIBLE MECHANISMS
Lower cost of compliance with targets (allows negotiation of lower targets)
Mobilize private capital for GHG mitigation (JI/CDM)
Facilitate technology transfer and foreign investment (JI/CDM)
Possibility of involving non-Annex I countries on terms acceptable to them (CDM)
Echoes prevailing belief in benefits of free trade and trade liberalization
Consistent with the prominent roles of transnational actors

28. Kyoto Protocol: Mechanisms
Annex I
Emission Trading
Emission Trading
Clean Development Mechanism
1990 level
Joint Implementation
- 5%
Domestic Actions
Domestic Actions
Assigned Amounts
Present day
2012 (BaU)
2012 with KP

29. Price of a Unit of Emissions Reductions: A Competitive Market
Cost of Reducing in the Host Country (Developing)
Cost of Reducing in the Investor Country (Annex I)
Price of a Unit of Emissions Reductions by CDM
<
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30. MODULE 3 THE CLEAN DEVELOPMENT MECHANISM

31. Clean Development Mechanism
Enables developed countries (known as Annex I countries) to meet their emission reduction commitments in a flexible and cost-effective manner
Assists developing countries (non-Annex I countries) in meeting their sustainable development objectives
Investors benefit by obtaining Certificates of Emissions Reductions (CERs)
Host countries benefit in the form of investment, access to better technology, and local sustainable development

32. Value & Benefits of CDM: From a developing country perspective
Attract capital for less-carbon intensive projects
Encourage active participation of private and public sectors
Technology transfer – environmentally friendly sustainable technologies
Investment priorities in sustainable development projects

33. CDM contributions to Sustainable Development objectives
Transfer of technology and financial resources
Sustainable ways of energy production
Increasing energy efficiency & conservation
Poverty alleviation through income and employment generation
Local environmental side benefits

34. Simplistic numerical example
Provide electricity for a barangay
“Business-as-usual” (baseline): Diesel generator sets
Cost of project $10
Emissions 1 tC
Cleaner project (CDM-eligible): Micro-hydro
Cost of project $13
Zero Emissions

35. Simplistic numerical example
CDM Investor (e.g. Japan)
Invests $3 ($13-$10, difference between cleaner and business-as-usual project)
Gains Certificate of Emissions Reduction of 1 tC, which it can meet some of its Kyoto Protocol commitments to reduce emissions

36. Simplistic numerical example
WIN – WIN – WIN
WIN for the host country
Sustainable development benefit: Cleaner energy production technology
WIN for the Annex I country
Credits for emissions reduction
WIN for the Global Environment
Emissions reduction

37. Baseline and CERs year Business as usual: CO2 emission baseline
Project implemented
Reduced emissions

38. How CDM can matter No CDM CDM CER income FIRR Without CERs implemented
With CERs not implemented
No CDM
Without CERs not implemented;
with CERs implemented
CDM
CER income

39. CDM Eligible Projects Renewable energy Fuel switching
End-use energy efficiency improvements
Supply-side energy efficiency improvement
Agriculture (reduction of CH4 & NO2 emissions)
Industrial processes (CO2 from cement, HFCs, etc)
Sink projects (only afforestation & reforestation)

40. Clean Development Mechanism
Types of small-scale projects that could qualify for fast-track approval procedures
Renewable energy projects up to 15 megawatts (MW) of output capacity
Energy efficiency improvements that reduce energy consumption on the supply and/or demand side by up to 15 gigawatt-hours (GWh)/year
Other project activities that both reduce emissions at source and directly emit less than 15 kilotons (kt) of CO2 equivalent annually

41. Projected Philippine CO2 Emissions: Potential of CDM Emissions
Reductions Supply

42. Philippine
GHG Abatement Cost
and Potential
Source: ALGAS

43. MINDORO ISLAND-ORIENTAL SPECIFIC WIND POTENTIAL POWER SITES
BATANES
1,100 KW
CASIGURAN
500 kW
NORTHERN LUZON
120 MW
POLILLO ISLAND
500 kW
MARINDUQUE ISLAND
3,000 kW
CATANDUANES
2,250 kW
LUBANG ISLAND
330 kW
TABLAS ISLAND
1,500 kW
MINDORO ISLAND-ORIENTAL
13,500 kW
ROMBLON ISLAND
1,000 kW
BUSUANGA ISLAND
330 kW
MASBATE ISLAND
3,000 kW
CUYO ISLAND
330 kW
DINAGAT ISLAND
3,000 kW
PALAWAN ISLAND
9,000 kW
POTENTIAL CAPACITY:
160,340 kW
SIQUIJOR ISLAND
1,000 kW
SPECIFIC WIND POTENTIAL POWER SITES

44. Solar Energy Resource Potential
Average insolation of 5- 6 kWh/sq. m/day all throughout the country
The country is also endowed with other NRE sources.
A study conducted by the US-National Renewable Energy Laboratory in 2000 showed that the country’s wind resources has over 10,000 km² with 70,000 MW of potential installed capacity.
Micro-hydro applications, on the other hand, has potential capacity of at least 500 kW in No. Luzon & Mindanao.
The study also estimated that the national solar radiation has annual potential average of kWh per square meter per day. This means that technologies such as solar photovoltaics and solar water heaters are viable in the country.
The country's ocean resource area is 1,000 square kilometers mainly due to its archipelagic nature. Several studies claimed that the country has huge ocean energy resources in form of ocean thermal, ocean current, and ocean waves that could be harnessed for power generation.
(NEXT SLIDE)

46. PCF/CDM Project Cycle – The Manufacturing Process for CDM Emissions Reductions
Preparation and review of the Project
Project completion
Project Idea Note
Project Concept Note
Project Concept Document (or equivalent)
3 months
Baseline Study and Monitoring Plan (MP)
Up to 21 years
Project Design Document
Baseline study and ER projections
Monitoring Plan
Periodic verification & certification
2 months
Verification report
Supervision report
Validation process
1-3 years
2 months
Validation protocol and report
3 months
Construction and start up
Negotiation of Project Agreements
Initial verification report
Project Appraisal and related documentation
Term sheet
Emission Reduction Purchase Agreement

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

48. Demand for CDM Projects
Example:
The Netherlands will reduce 100Mt CO2eq through CDM/JI (tender, CDM facilities etc) at average costs of ca 4 US$/ton CO2eq
This means 400 M US$ for CERs/ERUs. Contribution to the capital costs may by be 5-15% (at least for CERs). Consequently an investment of 4,000 M US$ is needed to generate the credits for the Netherlands.
Note: Should be new and additional

49. the Kyoto Protocol based on national communications
Total GHG emissions in 1990 and 2010, and reduction commitments according to
the Kyoto Protocol based on national communications
Demand Scenario
TotalGHG Emissions in 1990 (mtc)
Total GHG Emissions in 2010 (mtc)
Kyoto Reduction Commitments (mtc)
Excess Emissions (mtc)
Kyoto Commitments minus Excess Emissions
Projected Demand (at $4 per tC) in $M EU
1,159.50
1095.9
40.6
12.7
27.9
111.60
Australia
113.3
144.1
21.7
86.80
Canada
153
182.4
29.2
116.80
Iceland
0.8 1
0.1
0.40
Japan
337.2
388.2
71.2
284.80
New Zealand
19.8
22.9
3.1
12.40
Norway 15
17.3
2.1
8.40
Switzerland
14.6
14.5
1.1
4.40
United States
1634.4
1943.9
423.9
1,695.60
Eastern Europe
368.4
358.3
26.7 11
15.7
62.80
Former USSR
1,113.50
1032.2
0.9
81.4
-80.5
(322.00)

50. CDM Project Cycle Accreditation/ designation Design Validation/
Applicant Entity
Executive Board and COP/MOP
Accreditation/
designation
Design
Project Participants
Designated Operational Entity
Designated Operational Entity
Validation/
registration
Designated National Authority (DNA) for CDM
CDM Executive Board
Monitoring
Project Participants
Verification/
certification
Designated Operational Entity
CDM Executive Board
Issuance
Certified Emission Reductions

51. Thank you Roberto C. Yap, S.J., Ph.D. Environmental Economist
Climate Change Information Center
Manila Observatory
Ateneo de Manila University
Tel
Fax