GIS in HungaryGIS in HungaryContext and architectureContext and architecture
József FeilerJózsef Feiler
ContentsContents
• Background• National Climate Change Policy• Legal framework• Hungary’s GIS potential
• Greening Framework• Project selection• Where to reduce?• GIS Windows• Target areas• Procedural framework• Monitoring and verification
• Price
Background
• National Climate Change Policy• Legal framework• Hungary’s GIS potential
National Climate Change National Climate Change PolicyPolicy
• National Climate Strategy (2008-2025): – determines the objectives, priorities, tasks
and instruments related to research and measures about domestic impacts, mitigation and adaptation
• NCS priority areas on GHG emission reductions:– Energy efficiency in the residential sector– Energy efficiency in the public sector– Renewable energy use in micro, small and
medium scale– Emission reduction in the transport sector
Legal frameworkLegal framework
• Act LX of 2007 on the implementation framework of the Kyoto Protocol– defines the crucial elements of the treasury asset management of
Kyoto units by Minister of Environment;
– the Kyoto units can be used:• to offset GHG emissions occurring in Hungary;• to generate ERUs for JI projects implemented in Hungary;• to trade under International Emission Trading
– revenues from sale of Kyoto units (GIS and EU ETS auction) can be used only for
• GHG emission reductions, including LULUCF• Adaptation to climate change
• Act on Budget –defined treatment of GIS revenues and earmarking
Legal framework
• Government Decree 323/2007. (XII. 11.) Korm. on the implementation of Act LX of 2007– Objectives of the GIS– Conditions for the sale of AAUs– Contract regarding the sale of AAUs– Support conditions and types in the GIS– Conditions for & decisions over applications– Monitoring and verification
Hungary’s AAU potentialHungary’s AAU potential
0
20
40
60
80
100
120
2008 2009 2010 2011 2012
mill
ion A
AU
available AAU
Approved JI projects
Projected GHG emissions - high case
Projected GHG emissions - low case
• Total assigned amount units: 542 million
• Commitment period reserve: 395 million
• Emission trends (low): 432 million
• Emission trends (high): 443 million
• JI reserve: 10 million• Available AAU: 80-90
million• GIS pilot phase: 15 million• GIS 2nd phase: 30-40 million
Greening Framework
• Project selection• Where to reduce?• GIS Windows• Target areas• Procedural framework• Monitoring and verification
Greening Framework
• Defintion of areas of support under GIS, their priorities, technical details and precondtions attached as well as the definition of support intensity (Greening Objectives)
• Principles and technical description of the greenhouse gas emission reduction verification by areas of support
• Monitoring framework for the activities supported in GIS, including reporting to Buyers (financial and evaluation of verification)
• General provisions for the call for applications under the GIS (Procedural framework)
Project selectionProject selection
• Hard greening: all activities supported by the Scheme should result in emission reduction
• Focus on areas where support can create enabling environment
• Climate additionality and legal additionality• Carbon effectiveness calculation considers post-
Kyoto period in proven areas• Focus on areas with the highest cost-benefit
ratio concerning emission reduction• Matching funds from other Hungarian state
sources
Where to reduce? - Where to reduce? - CO2 CO2 emissionsemissions
Transport21%
Industry21%
Agriculture4%
Commercial services
20%
Transformation sector and non-
energy users4%
Residential sector30%
CO2 emissions by final energy end-users in Hungary, 2004
Source: Novikova, Dr. Ürge-Vorsatz, based on ODYSSEE (2007)
0
100
200
300
400
500
600
700
800
900
1000
millio
n t
on
s
<20 <0 0<20 20<100
Where to reduce? - Where to reduce? - Mitigation Mitigation potentialpotential
Estimated potential for CO2 mitigation in „EITs” at a sectoral level in different cost categories in 2030
Source: Novikova, Dr. Ürge-Vorsatz, based on IPCC (2007)
Cost categories (US$/tCO2eq)
Where to reduce? – Residential Where to reduce? – Residential sectorsector
Source: Novikova, Dr. Ürge-Vorsatz, (2007)
poormedium
good
multistorey terrassed houses
multistorey traditional
industrialized
family houses
0
200
400
600
800
1000
1200
1400
1600
1800
2000
thousands dwellings
Distribution of the existing dwelling
stock from the point of view of
the thermal insulation level in
Hungary
GIS windowsGIS windows
Program window (start in mid 2008)• emission reduction activities which are easy to execute in
large numbers, using standard procedures• emission reductions are easily verifiable (energy certificate
methodology)– house insulation– public lighting modernization– passive house construction– Renewable energy, energy efficiency and energy saving projects
primarily in the domestic and public sector
Project window (will be phased in in late 2009)• large size unique or/and complex GHG reduction projects• operations similar to those of Joint Implementation, with a
streamlined procedure• ISO 14064 based emission reduction verification procedure
Target areas – National CC Policy
• Residential and public sectors– heat insulation of buildings and the change of heating/cooling
systems– renewable energy use– measures to increase the effectiveness of district heating
systems– planning and construction of low energy use buildings – lighting modernization
• Renewable energy use for smaller to larger heating systems
• Biogas production and utilization• Other measures of energy conservation, energy
efficiency and promotion of the use of renewable energy
TargetTarget areas – GIS: areas – GIS: residential sectorresidential sector
• Retrofit of existing buildings– Exchange of windows and doors– Improvement of the thermal envelope– Condensing boilers– Solar protection – Balanced ventilation systems with heat recovery– Sunspaces – additional glazing of existing loggias and
balconies• Applications of renewable energy sources
– Solar thermal collectors– Biomass burners– Heat pumps– Biogas
• Construction of new low energy buildings
Procedural frameworkProcedural framework for greening projectsfor greening projects
GIS contract signature:• Buyer Govt.• Hungarian Min. of Env. and Water (MoEW)
GIS contract signature:• Buyer Govt.• Hungarian Min. of Env. and Water (MoEW)
AAU => BuyerPurchase price => GIS fund
AAU => BuyerPurchase price => GIS fund
Calls for GIS applications approved and published
Calls for GIS applications approved and published
In cooperation with MoEW Climate and Energy Unit
In cooperation with MoEW Climate and Energy Unit
Evaluation and contractingEvaluation and contracting
disbursementdisbursement Implementation (post-completion disbursement)
Implementation (post-completion disbursement)
Implementation (advance payment)
Implementation (advance payment) disbursementdisbursement
verificationverification
monitoringmonitoring
Monitoring & Verification
Verification• 1. Small projects, easy to establish emission reductions:
reporting by the beneficiary of the project with documentation and random verification by the GIS Management Office
• 2. Large, complex projects: third party verification according to ISO 14064 standard
Monitoring• Internationally renowned auditing firm to audit
investments and use of the revenues• Auditor to prepare annual reports and final report• Buyers are presented all reports and will have full and
unrestricted access to all relevant data, information and documentation
Monitoring & VerificationMonitoring & Verification
Greening Activity, Year X
Monitoring: verification and financial control
Audit
Year x
Greening Activity, Year X+1
Monitoring: verification and ...
Feedback by Buyers Schematic framework for
greening, monitoring cycle
Preparation of Annual Report year x
Review of greening framework
Year x+1
Price
PricePrice
• Context is given by market prices and risk factors• Price interlinkages:
• EUA – CER – green AAU – ERU (?)• EUA (2008 dec): 25 euro• CERs (2008 dec): 16.3 euro• green AAUs (delivery before 2008 dec)
• hard greening (CER- 10-20 %), • soft greening (CER- 25-35 %)
Risk factors:• Buyer faces and perceives the following main risks:
• Delivery risk, Greening risk, Political risk•Seller faces and perceives the following main risks:
• Compliance risk, Greening risk, Counter-party risk, Political risk, Porfolio over-exposure
•Other risk considerations:•Market risk, Advance payments and risk management
ConclusionsConclusions
• Strong governmental commitments– Legal system in force, institutional system in place
• High standards of transparency and fiscal credibility– Verification framework– Monitoring framework
• Operational efficiency– Low administrative costs (up to 5%)
• Hard greening– Verification of emission reductions
• Buyer tailored approach– Priorities of buyers are considered and accommodated in the
Greening Framework