United Nations Framework Convention on Climate Change UNFCCC-Kyoto Protocol Joint Implementation (JI) Clean Development Mechanism (CDM) The CP linkage Questions to consider Country case studies (Costa Rica) UNFCCC (1992) A global legal instrument on the control and management of greenhouse gases (GHGs) not controlled by the Montreal Protocol Adopted in 1992; entered into force in 1994 Aim: stabilization of GHG emissions at a level that would prevent dangerous anthropogenic interference with the climate system Principle of common but differentiated responsibilities Affiliated instrument: Kyoto Protocol (1997) Kyoto Protocol (1997) Adopted in 1997; not yet in force 121 ratifications; 44.2% of emissions (as at 17 Mar 2004) Target: An overall reduction of GHG emissions by at least 5% below 1990 levels Creates a more detailed and complex regulatory structure for GHG emissions Gives developed country parties assigned amounts of GHGs that they may not exceed in a specified period, 2008-2012 3 flexible mechanisms to facilitate cost- efficient implementation process Kyoto Protocol (contd) Greenhouse gases (GHGs): KP Annex A Carbon dioxide (CO 2 ) Methane (CH 4 ) Nitrous Oxide (N 2 O) Hydrofluorocarbons (HFCs) Perfluorocarbons (PFCs) Sulphur hexafluoride (SF 6 ) Importance of each gas is based on Global Warming Potential (GWP) Global Warming Potential (GWP) Ratio of global warming, from one unit mass of a GHG to that of one unit mass of CO 2 over a period of time Carbon dioxide (CO 2 ) 1 [baseline] Methane (CH 4 ) 21 Nitrous oxide (N 2 O) 310 HFC-23 11,700 HFC-125 2,800 HFC-134a 1,300 HFC-143a 3,800 HFC-152a 140 HFC-227ea 2,900 HFC-236fa 6,300 HFC-4310mee 1,300 CF 4 6,500 C 2 F6 9,200 C 4 F 10 7,000 C 6 F 14 7,400 SF 6 23,900 Kyoto Protocol: Sectors/source Categories Energy fuel combustion, fugitive emissions from fuels Industrial processes mineral products, chemical industry, metal production, other production etc. Solvent and other product use Agriculture Waste solid waste disposal on land, wastewater handling, waste incineration etc. Land-use, Land-use Change and Forestry Sector (LULUCF) Effective via: increasing removal of GHGs through sinks (e.g. planting trees) reducing emissions from sector (e.g. curbing deforestation) Removals from sinks generate removal units (RMUs) and must be validated and offset by greater emission cuts/removals else where More work being done in this area on methodologies including examples of good practice guidance UNFCCC-Kyoto Protocol: Implementation Actors Conference of the Parties (COP) Secretariat Subsidiary Body for Scientific and Technological Advice (SBSTA) Subsidiary Body for Implementation (SBI) Joint Working Group on Compliance (JWG) National UNFCCC focal points National CDM authorities (DNA) Others (IPCC, GEF etc.) UNFCCC-Kyoto Protocol: Financial Provisions Special Climate Change Fund (UNFCCC) fund projects relating to capacity building, technology transfer, climate change mitigation activities, economic diversification Least developed countries Fund (UNFCCC) fund special work programmes for LDCs Adaptation Fund (KP) Global Environment Facility (GEF) operating entity of the financial mechanism; main funding channel for developing countries Private investments Community Development Carbon Fund (Jul03) Kyoto Protocol: Implementation Mechanisms Joint Implementation activities implemented jointly between developed/EIT country Parties (ERUs) Emissions trading can be used as supplementary to actions to meet reduction commitments (AAUs) Clean Development Mechanism (CDM) developing country Parties can volunteer to reduce emissions via joint activities with developed Parties (CERs) Annex I Countries
Australia Austria Belarus* Belgium Bulgaria* Canada Croatia Czech Rep* Denmark EC
Estonia* Finland France Germany Greece Hungary* Iceland Ireland Italy Japan Latvia* Liechtenstein Lithuania* Luxembourg Netherlands New Zealand Norway Poland* Portugal Romania* Russia* Slovakia* Slovenia* Spain Sweden Switzerland Turkey Ukraine* UK USA
Joint Implementation: An Overview Article 6 of the Kyoto Protocol (KP) Climate change mitigation projects implemented between two Annex 1 countries Creation, acquisition and transfer of emission reduction units (ERUs) JI projects eligible from year 2000, but ERUs can only be issued for a crediting period starting after 2008 Joint Implementation: An Overview ERUs prior to 2008? can transact/transfer as assigned amount units (AAUs) under Art. 17 of KP (ET) claims and emission reductions need to be negotiated between host, investor country and project developer need to meet eligibility criteria for participating in ET (= JI first track projects)
Only GHGs covered under Annex A of KP: CO 2 , CH 4 , N 2 O, HFCs, PFCs and SF 6
Twin track approach for JI (COP6, Bonn, 2001) two separate approaches for countries hosting a JI project track 1 ERUs are issued by the host country: host country eligible to international emissions trading (IET) may verify ERUs as being additional track 2 ERUs are issued by the Supervisory Committee (SC): when host country does not meet eligibility criteria for IET, but is eligible to participate in JI, ERU verification must follow procedure under the SC Joint Implementation: An Overview Eligibility requirements to transfer/acquire ERUs under JI track 1: (a) Party to the KP (b) calculate/record assigned amounts (AA) (c) national registry in place (d) national system for GHG accounting (e) annual submission of GHG inventory (f) submission of supplementary info on AA Plus the Additionality factor (emission reductions additional to what would otherwise occur) Joint Implementation: An Overview Eligibility requirements to transfer/acquire ERUs under JI track 2: (a) Party to the KP (b) calculate/record assigned amounts (AA) (c) national registry in place * JI track 1 requirements less (d), (e) and (f) Joint Implementation: An Overview JI Track 1 Projects JI Track 2 Projects Verified according to the criteria for JI as designed by and applicable in the host country Verification likely to be different for each country No Annex-1 country eligible as of yet Projects in countries not in compliance with requirements for monitoring/reporting of GHG emissions (criteria d,e,f)
Need to follow verification procedure (to be designed by the Supervisory Committee) SC - to be elected at 1st COP/MOP once KP enters into force SC to accredit Independent Entities (IEs) to validate/verify/certify Joint Implementation: An Overview Eligible projects (same as CDM): installations based on renewable energy source fuel switch to lower carbon intensive fuels energy efficiency at supply side energy efficiency at demand side combined heat and power (CHP) projects agricultural sector projects (excl. landuse change) transport sector reduction in methane emissions reforestation/afforestation projects Joint Implementation: An Overview Eligible project developers: Government bodies/agencies Municipalities Foundations Financial institutions Private sector companies NGOs Organisations acting as an intermediary for any of the above Joint Implementation: An Overview Eligible technologies: no specific performance standards apply project technology introduced should at least have an equal or have a better performance standard than the existing operational technologies in the host country SC to design the rules and procedures for JI building on the CDM procedures Joint Implementation: An Overview Project Cycle for JI Track 2: Design and Operation Project idea note (PIN) assess eligibility, feasibility etc. Project design document (PDD) project description; baseline methodology; project duration; monitoring methodology/plan; GHG accounting; E/SIA; stakeholder comments; additionality/sustainability assessment Project validation by independent entity (IE) Project registration Project developer Host country National or international aministration Independent entity (IE) JI Supervisory Committee (SC) Project Design Phase Step 1: JI project idea, definition Step 2: Preparatoin of Project Idea Note (PIN) Pre-screening of eligibility Pre-screening of eligibility of the proposed project Step 3: Opinion on the PIN Possible review PDD by admin Step 6-7: Determination of the PDD and other docs by an IE Submission of IE report to SC Step 8: Possible review by SC Step 4-5: Preparation of PDD Undertake EIA Positive Negative Step 9: Project confirmation by SC Registration of the project by admin Registration of the project with host country Project Procedure: Design Phase Project developer Host country National or international administration Independent entity (IE) JI Supervisory Committee (SC) Project Operation Step 1-2: Monitoring of project performance and submission of monitoring results/report to IE Step 3: Verification by IE IE submits verification report to SC Step 4: Possible review by SC ERU transfer recorded in the national registry Verified ERUs recorded in host governments national registry Step 5: SC confirms emission reduction verification by IE Issue ERU s Project Procedure: Operation Phase CP and JI: The Link Cleaner Production applicable to all eligible projects mentioned Stronger link with renewable energy, fuel switch, CHP and supply-side energy efficiency projects CP Financing through JI process (e.g. Co-operation between Bulgarian and Dutch Governments) Goals of CDM Lower the overall cost of reducing GHG emissions released to the atmosphere Assist developed country (Annex I) Parties in complying with their emission reduction commitments Support sustainable development initiatives within developing countries
Clean Development Mechanism CDM is essentially a market product: certified emission reduction (CER) demand: Parties with GHG reduction commitments supply: mainly developing country parties to the KP CERs verified/certified by accredited body Resultant CERs added to parties with GHG reduction commitments Supplier benefits technology transfer / SD CDM: Eligible Projects Fuel switch to lower carbon intensive fuels Installations based on renewable energy Combined heat and power (CHP) Supply-side energy efficiency improvements End-use energy efficiency improvements Agriculture sector (except land-use change) Reduction in methane emissions Reforestation/afforestation projects CDM: Project Cycle CDM: Project Cycle Many specific requirements: validation of a project registration with the CDM Executive Board monitoring, verification and certification of GHG offsets Various steps in a CDM project cycle: to ensure that the project activity achieves the proposed emission reductions detailed documentation, various kind of agreements and mechanisms required adds up to the transaction costs large projects are able to absorb these costs CDM: Fast Track Projects Why do we need a fast track? process not worth it for small projects (high transaction costs) many small projects deliver significant local sustainable development benefits small-scale technologies are some of the most promising for solving the long term problem of climate change (e.g. solar; wind; fuel cells) CDM might lose public support if rules are biased toward large capital-intensive projects Smaller projects on a fast track renewables up to 15 MW energy efficiency up to 15 GWh/yr other emissions reductions project less than 15 kilotons of CO 2 annually CP Practitioners: Focal Points for Action Enabling activities - overcoming barriers work with government work with industry KP implementation work with JI or CDM projects Follow up and preparation for next stages auditing and on-going verification Enabling Activities: Working with Government Public sector awareness and education on climate change, in co-ordination with National UNFCCC focal point Public sector awareness and education on opportunities for key local industries Policy advice related to industries needs to enable JI/CDM projects, in co-ordination with National CDM authority Assistance in formulation of national implementation programmes (i.e. inventories, needs, priorities, dialogue, etc.) Implementation of projects (pilot and full-scale) with measures to mitigate climate change Enabling Activities: Working with Industry Private sector awareness and education workshops related to climate change, in co-ordination with National UNFCCC focal point Private sector awareness and education workshops on JI/CDM, in co-ordination with National JI/CDM authority Continued emphasis on enhancement of energy efficiency in relevant sectors including GHG measurements Promotion, application and diffusion of technologies, practices and processes that control, reduce or prevent GHG emissions in addition to energy efficiency measures Kyoto Protocol Implementation Build relationship with National JI/CDM authority co-operation on awareness-raising, workshops co-operation with policy advice to government co-operation with pilot studies, projects Develop projects with industry integrate greenhouse gas calculations into in-plant assessments transfer CP investment financing knowledge toward JI/CDM related project development for: renewable energy sources energy conversion and recovery new energy efficient processes technology transfer for non-energy-related GHG reductions
CP and UNFCCC-Kyoto Policy advice on industrys needs to enable JI/CDM With national focal point (NFP), submit pilot and full-scale projects to GEF Engage in technology needs assessments project with NFP Propose JI/CDM projects Raise awareness of JI/CDM opportunities among local key industries and partners Assistance in formulation of national implementation plans (GHG inventories, needs etc) Why Kyoto? Likely that Kyoto Protocol will enter into force in the near future pending USA and/or Russia ratification To be prepared, a foot in the door potential partnerships, access to financial resources and technologies Existing experience especially in the energy sector Benefits for industries sustainable business, expand business opportunities and differentiate from competitors Questions to Consider What are the opportunities under the Convention? What are the national priority energy issues and related industry sectors? What kind of expertise/services can you offer to implement priorities? What kind of necessary expertise/services you can obtain from the other practitioners? What kind of financial assistance are available to implement projects under the Convention? Summary: Develop an Action Plan Collect information Define competitive advantages experience of work in the priority sectors, existence of developed methodologies for addressing GHG emissions, successful training initiatives, trust of the main industry actors etc. Organise meetings/seminars/workshops co-ordinate with the Convention implementation bodies to exchange information and experiences and build capacity Develop JI/CDM projects and training programs relate to national priorities under the Convention and Protocol Explore funding opportunities consider other UNFCCC and KP financing mechanisms Questions? For more information: UNEP: http://www.uneptie.org/pc/cp/home.htm Basel: http://www.basel.int/index.html POPS: http://www.pops.int/ Kyoto: http://unfccc.int/ http://communitycarbonfund.org/ http://ttclear.unfccc.int