1 st capacity building workshop – 24/5/2013, graz, austria

Structure and content of a Step-by-step manual for the development and

implementation of low carbon policies

1st Capacity Building Workshop – 24/5/2013, Graz, Austria

Sebastian Mirasgedis Elena Georgopoulou

Yannis Sarafidis

NATIONAL NATIONAL OBSERVATORY OF OBSERVATORY OF ATHENSATHENS

Background – Aim of the Manual (I)

• Efficient climate change mitigation requires the development and implementation of an integrated set of low carbon policies and measures, encompassing all sectors

• Continuously challenging framework - drastic GHG emissions cuts are required for reaching the 2 oC target

• Requirements: significant background scientific and technical work, involvement of several stakeholders, co-operation between administrative divisions, clear targets and timelines, continuous adaptation to emerging legal requirements and technological development

• EU is very active in climate change mitigation => countries joining the EU have to develop all necessary infrastructure and actions

Background – Aim of the Manual (II)

Guide describing the basic steps to follow

Takes into account real problems and barriers faced in the SEE region

Concise and readable (does not enter into too much technical detail on each topic/ sub-topic, but provides examples and references for further reading)

The Manual aims to assist SEE countries (but also other countries) in the process of joining the EU to develop, implement and monitor low carbon policies and measures

Structure of the Manual

Chapter 1: Introduction

Chapter 2: Analyzing the broader scene regarding climate change

Chapter 3: Background analysis – Examining past trends and current situation of GHG emissions

Chapter 4: Assessing the potential and impacts of low carbon measures

Chapter 5: Developing projections of GHG emissions

Chapter 6: Selecting low carbon targets and appropriate measures and policies

Chapter 7: Implementation and monitoring of policies and measures

(a) Commitments deriving from international agreements (UNFCCC, Kyoto Protocol, others)

EU enlargement

(b) Commitments deriving from EU legal acts (e.g. the ’20-20-20 Climate and Energy Package’, which has transformed EU pledges for the 2013-2020 period of the Kyoto Protocol into a legally binding target)

Chapter 2: Analyzing the broader scene on climate change

Basic categories of commitments:


• 20-20-20 Climate and Energy Package

• Green Paper on the 2030 framework for climate and energy policies

• Roadmap for moving to a competitive low-carbon economy in 2050

EU framework of actions on climate change:


EU legal acts on:

GHG monitoring and reporting

Emissions Trading Scheme (EU-ETS)

Carbon Capture and Storage

Transport and Fuels

Renewable Energies

Energy Efficiency (incl. CHP)

→ Challenging and demanding set of commitments, both for now as well as for the mid-term future

Chapter 3: Examining past trends and current situation of GHG emissions

Key references

Intergovernmental Panel on Climate Change (IPCC)

2006 IPCC Guidelines

Good Practice Guidance (general and LULUCF)

1996 IPCC Guidelines

United Nations Framework Convention on Climate Change (UNFCC)

Decision 14/CP.11: Current reporting guidelines

Decision 15/CP.17 : Revised reporting guidelines

For trial use up to May 2013

For use as of 2015 submission (2013 data)

European Commission, GHG monitoring mechanism

Decision 280/2004/EC and implementing provisions (Decision 166/2005/EC)

New documents revising the monitoring mechanism have been approved by European Parliament


Basic principles in developing GHG emissions inventories

Transparency Assumptions and methodologies used should be clearly explained to facilitate

replication and assessment of the inventory by users of the reported information

Consistency The same methodologies are used for all years

Consistent data sets are used to estimate emissions or removals

Comparability Use of methodologies and formats agreed by the COP for estimating and reporting

inventories

Completeness Cover all potential sources and sinks, and all gases

Accuracy Estimates should be accurate in the sense that they are systematically neither over

nor under true emissions or removals, as far as can be judged, and that uncertain ties are reduced as far as practicable


Greenhouse gases to be considered Minimum requirements

CO2

CH4, change of GWP

N2O, change of GWP

HFCs & PFCs, additional gases have been included and GWP values have changed

SF6, change of GWP

NF3, additional gas

Additional elements Information on precursor gases (CO, NOx, NMVOC and SO2)

Indirect CO2 emissions from the atmospheric oxidation of CH4, CO and NMVOCs

Indirect N2O emissions from other than the agriculture and LULUCF sources

Other elements Hydrofluorethers (HFEs) and perfluoropolyethers (PFPEs)


Sources / Sinks of GHG emissions / removals Energy

Fuel combustion Fugitive emissions from primary fuel extraction, production, transportation, etc. Non-energy use of fuels

Industrial processes Emissions due to chemical reactions in manufacturing processes Use of F-gases Non-energy use of fuels

Solvents and other products use Agriculture

Agriculture activities Livestock activities

Land Use, Land Use Change and Forestry (LULUCF) Waste

Solid waste management Wastewater treatment


Changes / additions introduced by 2006 IPCC Guidelines

Improved coverage of emissions sources

Revisions in estimation methods

Guidance on Carbon Dioxide Transport, Injection and Geological Storage is

introduced in the Energy sector

Industrial processes and Solvents and Other product use have been combined

into a new sector, named Industrial Processes and Product Use (IPPU)

Non-energy use of fuels is to be reported under this sector only

Agriculture and LULUCF have been integrated into one sector, named

Agriculture, Forestry and Other Land Use (AFOLU)


GHG emissions / removals estimation methods

Basic equation: (Emissions) = (Activity data) * (Emission factors)

IPCC Guidelines provide methods for estimating GHG emissions at different

levels of complexity (tiers)

Tier 1 : Combination of readily available data from national and / or

international data sources with default emission factors and

additional parameters provided by the IPCC Guidelines

Tier 2: Similar to Tier 1 methods but based on country-specific

parameters

Tier 3: Detailed methods, simulating the process generating

emissions

Tier 2 and 3 methods are generally considered more accurate and are more

data and resource demanding


How to select appropriate estimation methods

Key category Introduced by IPCC Good Practice Guidance (2000)

Categories that have a significant influence on a country’s total inventory of

greenhouse gases in terms of the absolute level of emissions and removals, the trend

in emissions and removals, or uncertainty in emissions and removals

Prioritization in terms of Resources allocated

Selecting higher tier methods

Developing specific procedures for quality control and assurance

Approaches to identify key categories Approach 1: Key categories are those that, when summed together in

descending order of magnitude, add up to 95% of the total level and trend of

the national inventory

Approach 2 identifies key categories according to their contribution to uncertainty

Additional to those identified by Approach 1


How to select appropriate estimation methods

Mainly Tier 1 methods

Higher tier methods

Higher tier methods cannot be applied due to data availability


Data sources

National Statistics Agencies

Sectoral experts, stakeholder organisations

International organisations publishing statistics e.g., United Nations, Eurostat,

the International Energy Agency, OECD and the IMF

Reference libraries (National Libraries)

Scientific and technical articles in environmental books, journals and reports.

Universities

Web search for organisations & specialists

National Inventory Reports from Parties to the United Nations Framework

Convention on Climate Change

Reporting schemes developed under the provisions of other legislative acts


Dealing with data sources and data availability

Dealing with data sources

Data sets maintained by national statistical agencies have been developed for

purposes other than the compilation of GHG emissions inventory

Preliminary vs. final data

Confidentiality issues (mainly related to industry)

Lack of data

To work in close cooperation with the identified data provider, to whom all

requirements should be specified

Generate new data sets by means of measurements, surveys, etc.

Apply techniques such as

Interpolation, extrapolation

Generation of inventory parameters from a cluster of countries with comparable

national circumstances

Use of surrogate data


Calculation tools

Archiving and documentation of primary data per source / sink category

Elaboration of primary data to generate activity data as needed for the estimation of

emissions

Archiving and documentation of emission factors per source / sink category

Calculation of emissions per source / sink category

Generation of output in the appropriate format

Key category analysis

Uncertainty analysis


The IPCC inventory software application

In 2012 IPCC launched an inventory software application to assist Parties in

implementing 2006 IPCC Guidelines

Current version is 2.11, released on the 5th of April 2013

The tool and its manual are freely available at

http://www.ipcc-nggip.iges.or.jp/software/index.html

It is a database application that

Can be used for the whole inventory or just individual categories

Is a stand alone software with modest hardware requirements

Provides default data from 2006 IPCC Guidelines but gives users the flexibility to use

country-specific information;

Includes Uncertainty and Key Category Analysis;

Aids QA/QC activities;

Enables the simultaneous work of an inventory team


Reporting Common Reporting Format (CRF) tables

Excel file that comprises a series of standardized data tables

To report activity data, parameters, emissions estimates

National Inventory Report (NIR) Institutional arrangements & overview of methodological issues

Assessment of trends

Detailed information per inventory sector

Information related to Kyoto Protocol requirements

Annexes with detailed technical information

Indicators Foreseen within the context of the EU GHG monitoring mechanism

Priority indicators

Supplementary indicators

Additional indicators

Assessment of trends and comparability between member states

Identification of areas where mitigation measures need to be considered


Recalculations

Recalculation: the application of new methods and / or the generation of

emission estimates for a new category for the whole time series

Recalculations are closely related to The capacity (human and/or financial) for inventory preparation

Data availability

Methodological change or refinement => to improve accuracy Data availability has been improved

The previous method applied was not consistent with IPCC guidelines

A category has become key and therefore higher tier method should be applied

The previously used method is insufficient to reflect mitigation activities in a transparent manner,

as for example a uniform emission factor is applied

New inventory methods become available

Correction of errors

New categories and/or new gases => to improve completeness A new emission or removal activity is occurring or identified by IPCC Guidelines

A rapid growth in a previously very small category has now made this category worth estimating

and reporting


National Inventory System

A national system includes all institutional, legal and procedural arrangements made for estimating GHG emissions / removals, and for reporting and archiving inventory information.

Establish and maintain the institutional, legal and procedural arrangements necessary to perform the

functions of inventory planning, implementation and management, between the government agencies

and other entities responsible for the performance of these functions

Ensure sufficient capacity for the timely performance of the above mentioned functions, including data

collection for estimating GHG emissions and arrangements for the technical competence of the staff

involved in the inventory development process

Designate a single national entity with overall responsibility for the national inventory

Prepare national annual GHG inventories in a timely manner in accordance with the reporting

guidelines in place and relevant decisions of the COP, and provide the information necessary to meet

the reporting requirements defined in the reporting guidelines in place and in relevant decisions of the

COP

Undertake specific functions relating to inventory planning, preparation and management


Measures vs. Policies

Measures are technologies, processes, and practices that reduce GHG

emissions below anticipated future levels.

The development of a wind farm, the installation of double glazed windows in a

building, etc.

Policies are taken and/or mandated by a government - often in conjunction with

business and industry within its own country, or with other countries - or local

authorities to accelerate mitigation measures.

The implementation of feed-in tariffs for enhancing the penetration of RES, the

implementation of building thermal regulation, etc.


Review of measures

A review of the most important mitigation technologies per sector.

Basic characteristics for selecting mitigation measures:

Effectiveness (potential for reducing GHG emissions).

Cost-effectiveness (economic performance)

Implications on the society, the economy and the environment (co-benefits and co-

risks)

Other issues related to the ease of application, social acceptance, etc.


Effectiveness

Released amount of GHG g in a year t by a specific source:

Mitigation measures aim to reduce :

The activity data A (e.g. the energy conservation measures in buildings)

The corresponding emission factors C (e.g. the substitution of fossil fuels with

renewables)

Both

gttg CAE ,


Cost-effectiveness

Basic steps for evaluating the cost-effectiveness of mitigation measures.

Definition of technological project parameters and evaluation assumptions

Determination of the project cost and benefit components

Calculation of the net present value of costs / benefits (and if possible associated

externalities) as well as emissions

Evaluation indicators (NPV, IRR, B/C ratio, levelised costs of mitigation measures)

Sensitivity analysis


Cost-effectiveness

Description of the process for developing national and sectoral carbon marginal

abatement cost curves (simplified approach and also taking into account the

interactions between various mitigation options).


Co-benefits & co-risks

Implementation of mitigation measures results in broader impacts:

Health effects, such as reduced mortality and morbidity from the improved indoor and

outdoor air quality.

Ecological effects, such as reduced impacts on ecosystems due to the improved

outdoor environment, reduced use of nitrogen fertilizers, reduced production of

wastes, etc., as well as increased risks due to unresolved disposal of wastes

associated with nuclear power.

Economic effects (job creation, economic growth, increase of income, improvements

in security of energy supply, productivity increases).

Social effects, such as fuel poverty alleviation due to the implementation of energy

conservation measures, risks of food security due to increased role of energy

cultivations, etc.

A review of the most important co-benefits and co-risks associated with key

mitigation technologies is performed.


SWOT analysis

A strength, weakness, opportunity, threat (SWOT) analysis has been historically

used by firms in order to match market opportunities to their company’s

strengths.

It could be used to assist in finding the best package of measures for reducing

GHG emissions in an economy.

Strengths Weakness

Relatively low cost per m2 for insulations The implementation costs can be diffused in many actors Simple and mature technology, which can be implemented by local experts The implementation of the interventions does not present any technical difficulties

In some cases the replacement of single glazing may not be technically feasible Technical difficulties in cases where the roof of a building used for other purposes

Opportunities Threats

Economic crisis in the construction sector has resulted in reduced of labour and raw material

The implementation of the measure requires the involvement of many actors with different priorities Particularly in multi-family buildings the agreement of all the owners is required


Introduction

Aim:

To analyze future evolution of GHG emissions at national / sectoral level through

scenarios.

Scope:

To estimate the combined effects of mitigation measures.

To evaluate the effectiveness of various policies aiming at promoting specific GHG

mitigation technologies.

To estimate the total and marginal costs on the economy associated with mitigation

actions.

To investigate the role of carbon markets or the opportunities to mobilize market

forces in order to implement low cost mitigation actions.


Scenarios to be considered

With Measures, With Additional Measure & Without Measures

Other scenarios (Frozen technology, High / Low economic growth, High / Low

energy prices, etc.).


Methodologies / tools – Energy sector

(source: Duerinck et al. 2008)

What policy questions are

answered by each modeling

approach.

Short presentation of the

most popular models used

for energy analysis and GHG

emissions projections

(MARKAL, MARKAL-

MACRO, EFOM, WASP,

ENPEP/BALANCE, LEAP,

NEMS, PRIMES, GACMO,

STAIR)


Methodologies / tools – non-Energy sectors

Focus on spreadsheet models.

For Agriculture sector more sophisticated models can be used (CAPRI, AGLINK-

COSIMO).

For LULUCF sector usually the approach used for the Inventory is also used for

undertaken the projections. Also, more detailed models can be used (EFISCEN ,

YASSO, GLOBIOM/G4M).


Data requirements

GHG emissions inventory for past years

Macro-economic parameters

Population growth and number of households

Economic growth (GDP, GVA)

Energy prices and energy taxation

Income elasticities of energy demand

Demand for transport work

Technological developments concerning mitigation actions

Technical characteristics (fuel, efficiency, capacity, load factor, maximum

penetrations, etc.)

Economic parameters (investment cost, O&M costs, economic lifetime, etc.)

Policy priorities and constraints


Presentation of results

Structure of the report on projections (on the basis of European Commission,

2012):

1. Executive summary (key findings of the analysis)

2. Introduction (background information on GHG emissions in the country, the

projection process and procedures and a summary of the results).

3. Assumptions (basic assumptions about the economic scenario, population,

technologies considered, as well as the scenarios analyzed).

4. Projected emissions (data used, methodologies / tools, results, QA/QC activities

undertaken, other useful information).

5. Uncertainty analysis

List of useful indicators at national and sectoral level.


Rationale in setting low C targets:

• Approach 1: Improving to some extent the present situation

• Approach 2: Fulfillment of legal commitments

• Approach 3: Moving fast towards a low carbon economy


Timeframe for C targets:

• the cost of reaching a target at a specific point in time is influenced by the trajectory followed

• as specific investments have a long lifetime (e.g. in the power sector), some emission paths delaying the start of drastic GHG emissions reductions may be very difficult (if not impossible) to follow

• different emissions trajectories for reaching a target at a specific point in time influence also the evolution of emissions after that point


Form and type of targets:

• Targets need to be measurable and reportable so that the progress towards their achievement can be monitored - It is usually preferable to use targets expressed in physical units (e.g. ktons of CO2-equivalent) as these are easily understandable by decision-makers and stakeholders and can be measured

• Targets can be intensity or absolute; Absolute targets are explicit and thus easier to measure and communicate; Intensity targets can be useful in comparing countries, regions, or sectors across carbon emissions

• Targets can be legally binding or indicative

• Overall targets should be accompanied by disaggregated (sectoral) targets


Methodological steps for setting targets:

The marginal cost curve can be a good starting point


Step 1: Examine the marginal cost curve when only private costs and benefits are included in the economic analysis

Step 2: Examine the performance of potential GHG emission reduction measures by considering also external costs and benefits

Step 1.1: Identify measures having a negative unit cost (i.e. net benefit) ‘win-win’ measures

Step 1.2: Explore measures having a positive unit cost

Win-win under all circumstances (‘Solid’ win-win measures)

Win-win under a high interest rate regardless of the rest remaining conditions (‘Solid private’ win-win measures)

Rest measures (‘Uncertain’ win-win measures)

Becoming win-win under favorable conditions and a high interest rate (‘Promising private measures’)

Presenting a net private cost regardless of the interest rate and conditions faced (‘Low priority measures’)

In between these 2 groups (‘Medium priority measures’)


Developing appropriate policies for the efficient implementation of measures selected:

(a) Economic policies that support directly low carbon measures (e.g. investment subsidies, interest-free loans, subsidization of loan interests)

(b) Economic policies that support indirectly low carbon measures by ‘penalizing’ conventional alternatives (e.g. increasing taxes on conventional fuels)

(c) Policies where the financial burden implied by some low carbon measures is transferred to/ shared with third parties (third-party financing)

(d) Regulations and standards favoring/ imposing low carbon technologies


Mixing policy tools: Regulations and standards must always be applied

If low carbon markets are very limited at present, then policies providing direct economic subsidies to low carbon measures must also be applied at least in the beginning; then, gradually they can be replaced by other policy tools (e.g. green tariffs)

Economic disincentives must be very carefully considered since they may deteriorate the living conditions of the poorer if not properly designed and introduced

There is not a single tool that covers all cases – clever combinations are needed


Formulating an Action Plan for achieving a target:

Selected target and set of policies and measures

Detailed time schedule for the implementation of selected measures

Definition of the coordinator and the stakeholders to be involved in the implementation of each measure

List of preparatory actions per measure

Milestones per measure

Indicators of progress per measure

Methodology for calculating GHG emissions reductions achieved per measure during its implementation


Public consultation – Communication with stakeholders: Phase A: Selection of carbon targets, measures and policies –

Compilation of draft Action Plan

Phase B: Finalization of carbon targets, measures, policies, and Action Plan

Phase C: Implementation of Action Plan for GHG emissions reduction

Adoption process: Different legal formats of targets depending on the legal commitments of the

country/ region/ sectors in question

Quantitative targets, Action Plan: law (Parliament) or simply a decision of the administration?

Voluntary Agreements - Memorandum of Understanding

Timing is important; the process must not be too long → risk of losing the momentum gained with stakeholders and target groups


Institutional arrangements:

A Monitoring Plan, which contains suitable indicators of progress per selected measure, concrete procedures for collecting necessary input data, and a methodology for estimating GHG emissions reductions achieved per measure applied

A Monitoring Team, which checks the implementation of selected policies and measures on a regular basis

A Monitoring Report, which is compiled regularly by the Monitoring Team and presents its findings for each specific monitoring period

Proper monitoring requires:


Timeframe for the evaluation

Data collection sources and process

Evaluating progress and results achieved so far:


Methodological tools to be used for the evaluation Indicators reflecting the progress (expressed in physical terms) in implementing the

selected low carbon measures (progress indicators)

Indicators showing the GHG emissions reduction achieved through the implementation of selected low carbon measures (result indicators)

Progress indicators


Result indicators


Reviewing and updating the mix of low carbon measures and related policies / When?


• The progress of some measures (expressed in physical terms) falls significantly behind the targets set in the adopted Action Plan

• The progress of some measures (expressed in physical terms) exceeds by far the targets set in the adopted Action Plan

• Selected support policies face significant barriers during their implementation (e.g. bureaucracy, lack of human resources in the administration, etc.)

• Economic conditions in the country/ region have drastically changed, affecting selected financial instruments for the promotion of low carbon measures

• New legislation related either directly or indirectly to low carbon policies has emerged, setting new/ additional/ stricter requirements

• New/ advanced low carbon technologies have emerged which were not included in the adopted Action Plan

Reviewing and updating the mix of low carbon measures and related policies / How?


• The level of the target set for a specific measure was too ambitious/ too low compared to the dynamics of the market modify target

• The mix of policies for a specific measure failed to support the implementation of the measure to the extent foreseen modify mix of policies

• New potential low carbon measures/ technologies have emerged repeat measures’ evaluation and selection of support policies

Update Action Plan and Monitoring Plan

Thank you for your attention!

1 st capacity building workshop – 24/5/2013, graz, austria

Documents

climate changechapter

climate change20

climate change unfccdecision

implementation of low

broader scene

climate changeeu legal

low carbon targets

manual chapter