1. NAMAs and the Building Sector UNFCCC Workshop Buildings under UNFCCC Flexible Mechanisms Chia-Chin Cheng UNEP-SBCI Beihang University International Green Energy Center Bonn, Germany March 24, 2011

2. Insert Footer: View menu, Header and Footer. Apply to All NAMAs context CDM and NAMAs working together– a two-track developing country mitigation support mechanism Benefits of the new NAMAs mechanism Three Papers/Reports from SBCI and Risoe: 1. The Kyoto Protocol, the CDM & The Buildings & Construction Industry- 2008 2. NAMAs for Dispersed Energy End-Use Sectors: Using the Building Sector as an Example- 2009 Perspective Series 3. CDM, NAMAs and the Building Sector: a Two-Track Financing Mechanism for Post-2012 – 2011 working paper Outline

3. New Development under UNFCCC Developing Countries will share mitigation responsibilities Bali Action Plan Nationally appropriate mitigation actions by developing country Parties in the context of sustainable development, supported and enabled by technology, financing and capacity-building, in a measurable, reportable and verifiable manner. Copenhagen Accord started signing up for NAMA Cancun Agreement confirmed setting up NAMA registry for support

4. Underlying causes for low EEB uptake Long-tail characteristics of the sector- small saving, big effort Fragmentation of sector / uncoordinated stakeholders Insufficient R&D and information for new EEB technologies Insufficient EEB tech and management expertise and tools High upfront and transaction costs for tech adoption in DC Lack financing mechanism and interests for EE investments Lack of awareness and general inertia restrict uptake Source: Cheng, et al., 2008

5. Insert Footer: View menu, Header and Footer. Apply to All These barriers are essentially market failure CDM as an market-based mechanism cannot correct market failure key long-tail sectors – market failures are prominent rural sectors and LCD – no sufficient market activities Public policies are required to correct market and overcome barriers To fundamentally transform the building sector in developing countries: Developing countries requires public sector support to enforce public policies -- NAMAs Developing countries requires private sector support for compliance of public policies -- CDM To Overcome Generic Barriers in Building Sector

6. Insert Footer: View menu, Header and Footer. Apply to All Policy based financing mechanism (NAMAs) create enabling conditions for a systematic uptake for climate change mitigation activities from the private sector in developing countries provide necessary funding, technology and capacity assistance for policy implementation, particularly to difficult sectors and in least developed countries Project/program based carbon financing The boost of enabling conditions foster large-scale private sector investment and make use of CDM as an additional mechanism provide necessary means and financial resources to help regulated entities comply with government policies increase speed, quality and depth of policy implementation Possible Post-2012 Mechanisms -- Dual Track Financing

7. Insert Footer: View menu, Header and Footer. Apply to All All BAP elements need to be addressed in the new mechanism Technology transfer and development Capacity building Sustainable development Avoid double counting with CDM Use non-carbon based MRV - some effective policy measures do not necessarily result in carbon emission reduction - many quantitative indicators available to measure success Source of funding Initially public funding Later private sector funding Important Issues to be Address before inserting NAMAs

8. Insert Footer: View menu, Header and Footer. Apply to All Mandatory building inventory and baseline performance Mandatory minimum performance based standards Mandatory/voluntary building rating and certification program Loan, subsidies, incentives and tax breaks Building auditing programs for compliance and certification Building survey and monitoring programs for MRV purposes Minimum performance standards for appliances and equipment Building professional certification and education programs Technology need assessment, demonstration and model house programs Public sector building improvement and high performance building deployment programs R&D programs for new building materials, technology, and practices Awareness raising and informational campaign programs Need Based NAMAs Registry for the Building Sector

9. Insert Footer: View menu, Header and Footer. Apply to All Carbon emission reduction is not a good measurement of success for NAMA programs. -- impacts of public policies are often far-reaching and interwoven, it is almost impossible to distinguish emission reduction resulting from an enabling policy or from real and additional voluntary private sector actions, when the majority of emission reduction occurs in the private sector. Using carbon credits for NAMA MRV and the basis for financing, double counting with the CDM will become almost inevitable. Lead to selective implementation on measures which are easy to determine emission reductions. Many policies and measures that have profound long-term impact, and create extensive co-benefits, may not be considered and implemented in DC. MRV for NAMAs

10. Insert Footer: View menu, Header and Footer. Apply to All Indicators for MRV should be able to demonstrate the specific outcome or changes in various enabling programs. Improvement in average energy performance of commercial buildings Percentage of new buildings built according to minimum energy performance standards. Percentage of existing building retrofitted according to minimum energy performance standards for building retrofitting. Percentage (number) of buildings audited, certified or rated according to predetermined benchmarks. Number (percentage) of state-of-the-art buildings constructed (e.g., zero emission buildings and passive buildings). Total amount of loans, subsidies, or tax breaks issued. Number of auditors on job, number of new auditors trained. Number of building professionals and percentage trained and on job. Other Indicators are Available to Measure Program Success

11. NAMAs to Create Enabling Environment for Project Based Mechanism Time** Energy Performance KWh/m 2 (by topology, climate zones) BAU BASELINES*

12. NAMAs to Create Enabling Environment for Project Based Mechanism Time** Energy Performance KWh/m 2 (by topology, climate zones) BAU BASELINES* Mandatory Minimum Performance Standards NAMA Support (non-carbon credit based financing) Improved Future Baseline NAMAs

13. NAMAs to Create Enabling Environment for Project Based Mechanism Time** Energy Performance KWh/m 2 (by topology, climate zones) Voluntary technology upgrade Building rating & certification CDM or Project & Program Based Mechanism (carbon credit based financing) Carbon Credits Mandatory Minimum Performance Standards NAMA Support (non-carbon credit based financing) BAU BASELINES* Improved Future Baseline NAMAs

14. NAMAs to Create Enabling Environment for Project Based Mechanism Time** State of the Art Technology, Best Practices CDM or Project & Program Based Mechanism (premium credits) Premium Carbon Credits Energy Performance KWh/m 2 (by topology, climate zones) Voluntary technology upgrade Building rating & certification CDM or Project & Program Based Mechanism (carbon credit based financing) Carbon Credits Mandatory Minimum Performance Standards NAMA Support (non-carbon credit based financing) BAU BASELINES* Improved Future Baseline NAMAs

15. Insert Footer: View menu, Header and Footer. Apply to All Because carbon credits are not the measurement of success, it avoids the double counting problem with the existing mechanisms. Utilize public policy and funding to foster and mobilize private sector investment through the CDM. For developed countries, the NAMA framework goes beyond offsetting mechanisms and focuses on supporting enabling environment for mitigation actions in developing countries. Address all essential elements in the BAP 1b(ii) and include mechanisms to support activities for capacity building, technology, financing and MRV. Benefits of the new NAMA mechanism

16. Insert Footer: View menu, Header and Footer. Apply to All Integrate funding from developed countries for development aids for capacity building and technology transfer in the climate change sector and implement in a more systematic manner. Correct market barriers for key end-use long-tail sectors and boost CDM activities in these underdeveloped sectors. Change the regional distribution of the CDM by an enabling policy framework based on country needs. Benefits of the new NAMA mechanism