Issue mapping for CDM: An Asian perspective — How to Realize New and Promising Channel?
Issue mapping for CDM: An Asian perspective — How to Realize New and Promising Channel?
Climate Experts [Advisory Service on Climate Strategy]Chair, Senior Research Fellow
IGESVisiting Research Fellow
Naoki MatsuoE-mail: [email protected]://www.climate-experts.info/
Climate Experts [Advisory Service on Climate Strategy]Chair, Senior Research Fellow
IGESVisiting Research Fellow
Naoki MatsuoE-mail: [email protected]://www.climate-experts.info/
Climate Mitigation and Sustainable DevelopmentClimate Mitigation and Sustainable Development
Choosing Less-Energy Economy is the key for Economic Growth Japan: Good example Technology transfer needed
Digestion of the technology in the host country needed… Climate mitigation = Opportunity; NOT cost…
How to design the measures to make portfolio of other policy objectives Maximizing “co-benefits”
Energy cost reduction Local environment protection Local employment Energy security …
Choosing Less-Energy Economy is the key for Economic Growth Japan: Good example Technology transfer needed
Digestion of the technology in the host country needed… Climate mitigation = Opportunity; NOT cost…
How to design the measures to make portfolio of other policy objectives Maximizing “co-benefits”
Energy cost reduction Local environment protection Local employment Energy security …
Developing Countries’ Concern…Developing Countries’ Concern… Unfairness…
Big gap in per capita emissions. Impact of climate change (vulnerability).
Historical contribution to global warming… Larger than current emission gap
Emission limit to non-Annex I also? Against “Opt-In” provision at Kyoto negotiation. Concern on run out of low-hanging fruit (low-cost mitigation options)
Attitude of developed countries… Bush Administration
Negotiation tactics as “G77+China”… How to invite more technology and money…
Formalistic/strategic behavior dominates… What is needed in the real world? Proven experiences! [Example] East Germany experience Positive attitude of EITs
USIJI experience Positive attitude of Latin America
Unfairness… Big gap in per capita emissions. Impact of climate change (vulnerability).
Historical contribution to global warming… Larger than current emission gap
Emission limit to non-Annex I also? Against “Opt-In” provision at Kyoto negotiation. Concern on run out of low-hanging fruit (low-cost mitigation options)
Attitude of developed countries… Bush Administration
Negotiation tactics as “G77+China”… How to invite more technology and money…
Formalistic/strategic behavior dominates… What is needed in the real world? Proven experiences! [Example] East Germany experience Positive attitude of EITs
USIJI experience Positive attitude of Latin America
CDM in the NegotiationsCDM in the Negotiations “JI” concept in the UNFCCC
AIJ “Pilot” Phase introduced at COP 1 (too early for introduction)
JI revised in the Kyoto negotiations Proposed by developed countries (e.g., US proposal) Opposed by developing countries
“CDF” concept in the Brazilian proposal CDF: Penalty for non-compliance Fund for mitigation
projects Converted to CDM (with acrobatic interpretation) Saved Kyoto negotiations
What is CDM? Almost same as JI concept in the US proposal… Key point: Proposal from non-Annex I Bridge between South and North…
“JI” concept in the UNFCCC AIJ “Pilot” Phase introduced at COP 1 (too early for
introduction) JI revised in the Kyoto negotiations
Proposed by developed countries (e.g., US proposal) Opposed by developing countries
“CDF” concept in the Brazilian proposal CDF: Penalty for non-compliance Fund for mitigation
projects Converted to CDM (with acrobatic interpretation) Saved Kyoto negotiations
What is CDM? Almost same as JI concept in the US proposal… Key point: Proposal from non-Annex I Bridge between South and North…
Two Objectives for CDMTwo Objectives for CDM Environmental corporation
To assist host developing country to achieve sustainable development No uniform judgement criteria
(under jurisdiction of the host government) Local environment, employment, …
New tool to comply with the target (investor) Offset domestic excess emissions by the GHG
“reductions” in the developing country Business tool for private sector Incentives / driving force
Environmental corporation To assist host developing country to achieve
sustainable development No uniform judgement criteria
(under jurisdiction of the host government) Local environment, employment, …
New tool to comply with the target (investor) Offset domestic excess emissions by the GHG
“reductions” in the developing country Business tool for private sector Incentives / driving force
Institutions for CDMInstitutions for CDM COP/MOP (Conference of the Parties/Meeting of the Parties)
Ultimate decision-making body for the Kyoto Protocol Designation of the Operational Entities COP as COP/MOP until the entry into force of the KP
CDM Executive Board (CDM EB) Supervising body of the CDM. Supported by the Secretariat Decides the detailed rules/modalities of the CDM.
Recommendation to the COP/MOP Registration of the projects; Accreditation of the OE; Approval of
the baseline methodologies, etc.; Issuance of the CERs; Operation of the CDM Registry; …
Panels Recommendation of the detailed rules/modalities to the CDM EB OE Accreditation; Small-scale CDM; Baseline/monitoring
methodologies Operational Entity
Validation of the project as CDM (ex-ante) Verification/certification of emissions reductions (ex-post)
COP/MOP (Conference of the Parties/Meeting of the Parties) Ultimate decision-making body for the Kyoto Protocol Designation of the Operational Entities COP as COP/MOP until the entry into force of the KP
CDM Executive Board (CDM EB) Supervising body of the CDM. Supported by the Secretariat Decides the detailed rules/modalities of the CDM.
Recommendation to the COP/MOP Registration of the projects; Accreditation of the OE; Approval of
the baseline methodologies, etc.; Issuance of the CERs; Operation of the CDM Registry; …
Panels Recommendation of the detailed rules/modalities to the CDM EB OE Accreditation; Small-scale CDM; Baseline/monitoring
methodologies Operational Entity
Validation of the project as CDM (ex-ante) Verification/certification of emissions reductions (ex-post)
CDM To DateCDM To Date1. Introduction of CDM to Kyoto Protocol as the “Bridge” between South a
nd North 1997
2. Marrakech Accords + CDM Executive Board establishment 2001
3. Detailed rule preparation [with 3 Panels] 2002–03
Accreditation of the Operational Entity (validator/verifier)• 20 entities proposed (2: non-Annex I). 1st OE to be accredited at next EB
Small scale CDM• Definition, Indicative list of methodologies, Simplified procedures
Baseline and Monitoring Methodologies• PDD template (version 01; ver.02 to be used after next EB?)
4. Approval process started 2003
New methodology approval• 35 methodologies submitted (including duplication)• 9 methodologies approved; 4 reformatted (for validation)• First CDM project will be registered at EB 14…• Methodologies approval process: every 2 months• http://cdm.unfccc.int/methodologies/process/
1. Introduction of CDM to Kyoto Protocol as the “Bridge” between South and North 1997
2. Marrakech Accords + CDM Executive Board establishment 2001
3. Detailed rule preparation [with 3 Panels] 2002–03
Accreditation of the Operational Entity (validator/verifier)• 20 entities proposed (2: non-Annex I). 1st OE to be accredited at next EB
Small scale CDM• Definition, Indicative list of methodologies, Simplified procedures
Baseline and Monitoring Methodologies• PDD template (version 01; ver.02 to be used after next EB?)
4. Approval process started 2003
New methodology approval• 35 methodologies submitted (including duplication)• 9 methodologies approved; 4 reformatted (for validation)• First CDM project will be registered at EB 14…• Methodologies approval process: every 2 months• http://cdm.unfccc.int/methodologies/process/
Role of CDMRole of CDM
New Channel Mutual understanding between South and North
Opportunity to realize benefits by emission reductions
Transfer of technology and money New emerging market of GHG emission
reductions New business opportunities and compliance tool for
Annex I Also new businesses for non-Annex I companies
(emerging interest) Issues remain…
New Channel Mutual understanding between South and North
Opportunity to realize benefits by emission reductions
Transfer of technology and money New emerging market of GHG emission
reductions New business opportunities and compliance tool for
Annex I Also new businesses for non-Annex I companies
(emerging interest) Issues remain…
Issue MappingIssue Mapping PDD – Additionality/Baseline and Methodology
How to make the project as CDM? DNA – Host country institution
How to invite foreign investment? Domestic incentives – Investing country
Utilization of CER in domestic emissions trading scheme?
Project selection What types of project are promising?
Financing the project – Carbon financing Still unknown in the financial sector
Sustainability – Public money utilization Small-scale, community-based, …
Needs-Seeds matching – How to find the project? Institutional framework
PDD – Additionality/Baseline and Methodology How to make the project as CDM?
DNA – Host country institution How to invite foreign investment?
Domestic incentives – Investing country Utilization of CER in domestic emissions trading
scheme? Project selection
What types of project are promising? Financing the project – Carbon financing
Still unknown in the financial sector Sustainability – Public money utilization
Small-scale, community-based, … Needs-Seeds matching – How to find the project?
Institutional framework
CDM Project Cycle and Associated RisksCDM Project Cycle and Associated Risks
Project Design
PDD Drafting
New Methodology Approval
Validation
Project Implementation
Monitoring
Verification/Certification
CERs Issuance
Compliance Tool Sold in the Market
CDM EB
CDM EB
OE
OE
Designing the “additional” project?
Find out capable consultant?
Approved without delay?
Registered as CDM without delay? (incl. host/investor country’s approval)
Planned performance? Without delay?
Is monitoring good enough?
Planned amount of CERs issued?
Market price hover around?
CDM Project-Cycle – ValidationCDM Project-Cycle – ValidationPDD Drafting (with New Methodology)
Submit to CDM EB through OE
Meth Panel recommendation
Judgement by CDM EB
A-rated: ApprovedB: Resubmit to Meth PanelC: Not approved
Expert desk review + Public comments
Validation by OE
Host country approval, local stakeholder/NGO/public comments
Request for registration by OE (w/ validation report)
Assessment by CDM EB (w/ host countries)
Registration as CDM project by CDM EB
If existing methodology applicable
Pre-recommendation
(technical) clarification
Reformat to AM 00xx
PDD and MethodologyPDD and Methodology New Methodologies in Annexes 3 (baseline) and
4 (monitoring) of the Project Design Document Not easy task…
Submission: 1st round: 14, 2nd: 2, 3rd: 5, 4th: 14, 5th: 7,… Only 2 approved in the 1st and 2nd round (9 +3 approved to
date) Submitted new methodology: 48 to date
Approved ones provide good examples Once failed, around a half year delayed…
Problems Many skills needed…
What is “methodology”? How to describe methodology? What is “additionality”? How to demonstrate additionality? What is “baseline”? How to identify baseline scenario?
New Methodologies in Annexes 3 (baseline) and 4 (monitoring) of the Project Design Document Not easy task…
Submission: 1st round: 14, 2nd: 2, 3rd: 5, 4th: 14, 5th: 7,… Only 2 approved in the 1st and 2nd round (9 +3 approved to
date) Submitted new methodology: 48 to date
Approved ones provide good examples Once failed, around a half year delayed…
Problems Many skills needed…
What is “methodology”? How to describe methodology? What is “additionality”? How to demonstrate additionality? What is “baseline”? How to identify baseline scenario?
Methodology, Additionality and BaselineMethodology, Additionality and Baseline Methodology
Describe the proper noun by linguistic words Assume a conceptual/virtual generalized project
Additionality The same project would not be implemented if the project is not
registered as CDM project Demonstrate why it is not “anyway” project
Baseline scenario What would have occurred if CER revenue = 0 ? Several possible scenarios are assessed…
Local regulation, investment analysis, several barriers, … Demonstrate logical and reasonable conclusion Express as a mathematical formula/algorithm
How to describe the additionality/baseline as methodology?
Methodology Describe the proper noun by linguistic words Assume a conceptual/virtual generalized project
Additionality The same project would not be implemented if the project is not
registered as CDM project Demonstrate why it is not “anyway” project
Baseline scenario What would have occurred if CER revenue = 0 ? Several possible scenarios are assessed…
Local regulation, investment analysis, several barriers, … Demonstrate logical and reasonable conclusion Express as a mathematical formula/algorithm
How to describe the additionality/baseline as methodology?
Concept of BaselineConcept of Baseline
If Current Situation Continues… (BaU)
Project emissions
Baseline emissions
(counter-factual)If local regulation is introduced…
Reductions even without the project
True emission reductions
time
Decomposing Baseline Setting…Decomposing Baseline Setting… Baseline Methodology [Meth Panel/CDM EB]
Baseline “Scenario” identification “Additionality test” is included “Applicability conditions” are set
Represent such a scenario by using “mathematical formula” Baseline Emissions: BEy = f (pi)
The associated parameters pi are those of ‘project’ scenario to be monitored [linked to the monitoring methodology]
Application of the Baseline Methodology [OE/CDM EB] Specific to the proposed project
“Evidences” whether the methodology can be applicable are needed
Baseline Methodology [Meth Panel/CDM EB] Baseline “Scenario” identification
“Additionality test” is included “Applicability conditions” are set
Represent such a scenario by using “mathematical formula” Baseline Emissions: BEy = f (pi)
The associated parameters pi are those of ‘project’ scenario to be monitored [linked to the monitoring methodology]
Application of the Baseline Methodology [OE/CDM EB] Specific to the proposed project
“Evidences” whether the methodology can be applicable are needed
Difference between Baseline ScenariosDifference between Baseline Scenarios
283
613
271
442
190
580
500540
576
860
0
100
200
300
400
500
600
700
800
900
AV OM BM CM AV OM BM CM AV OM
All Grids SIC Grid SING Grid PCF (SICGrid)
Intensity
(t-CO2/GWh)Concept (t-CO2/GWh)
All Grids AV 283OM 613BM 271CM 442AV 190OM 580BM 500CM 540AV 576
PCF (SIC Grid) OM 860
AV Weighted AverageOM Operating MarginBM Build Margin
CM =(OM+BM)/2 Combined Margin
Hydro Project Baseline in Chili
SING Grid
SIC Grid
Approved Methodologies (reformatted)Approved Methodologies (reformatted)
AM0001 Incineration of HFC 23 Waste Streams
AM0002 Greenhouse Gas Emission Reductions through Landfill Gas C
apture and Flaring where the Baseline is established by a Public Concession Contract
AM0003 Simplified financial analysis for landfill gas capture projects
AM0004 Grid-connected biomass power generation that avoids uncont
rolled burning of biomass
HFC 23 Waste StreamHFC 23 Waste Stream
HFAnhydrous Hydrogen Fluoride
HFAnhydrous Hydrogen Fluoride
CHCl3Chloroform
CHCl3Chloroform
Reaction Process
Reaction Process
Separation/Purification
Process
Separation/Purification
ProcessCHClF2
HCFC 22
CHClF2
HCFC 22
Raw Materials
Product
HClHydrochloric Acid
HClHydrochloric Acid
CHF3
HFC 23
CHF3
HFC 23
Around 3% of HCFC 22 production
• HFC 23: Inevitably generated by-product of HCFC 22 production process [non-toxic substance]• Most of HFC 23 is released without recovery [small portion: sold]• High GWP: 11,700 (equivalent to 11,700 times of CO2 in mass unit)
Now released to atmosphere
Project OutlineProject OutlineHFC 23 Reprocessing Operation
Steam
Fuel (LNG)
1200 oCIncineration furnace (Thermal Oxidizer)
Cooling Tower
Air
Ca(OH) 2
Neutralization tank
Filtrate
CaF 2
Gaseous effluent
Absorption Tower
Absorption liquid tank
Water
Alkali solution
Precipitation tankHCFC 22
Plant
GHG Emission SourcesGHG Emission Sources
In the boundary Outside the boundary
Baseline scenario[monitored]
HFC 23 None
Project scenario
Non-negligible[monitored]
HFC 23 (leak)CO2
(Fuel combustion)CO2
(HFC combustion)
CO2
(Power generation)CO2
(Steam generation)
negligible small[not
monitored]
N2O
(Fuel combustion)HFC 23
(leak to effluent liquid) CO2
(trapped as CaCO3 etc)
CO2
(Sludge transport, Alkali production, etc)
N2O
(Power/steam generation)
Not counted
GHGs associated with the facility construction
(Macroeconomic indirect effects)
Accounting of Emission ReductionsAccounting of Emission Reductions
ERy = BEy − PEy
PEy = PEy[in] + PEy
[out]
= ND_HFC23y (Not Destroyed HFC 23)
+ CO2_HFC23y (HFC combustion)
+ CO2_NGy (Natural Gas combustion)
+ CO2_Powery (Power supply) + CO2_Steamy (Steam supply)
BEy = [[ q_HFC23y Purity_HFC23y ] B_HFC23y ] GWP_HFC23
ERy = BEy − PEy
PEy = PEy[in] + PEy
[out]
= ND_HFC23y (Not Destroyed HFC 23)
+ CO2_HFC23y (HFC combustion)
+ CO2_NGy (Natural Gas combustion)
+ CO2_Powery (Power supply) + CO2_Steamy (Steam supply)
BEy = [[ q_HFC23y Purity_HFC23y ] B_HFC23y ] GWP_HFC23HFC 23 input to the incinerator HFC 23 to be limited due to local regulation (= 0)
Cut-Off Condition: Q_HFC23y Q_HCHC22y w (ratio of latest 3 years)
(to exclude the case of manipulating of HCFC 22 production process to get more HFC 23)
Monitoring ParametersMonitoring Parameters
HCFC 22 plant
Project Boundary(newly build decomposition facility)Power
Q_Powery
q_HFC23y
Q_NGy
CO2_HFC23y
calculated from q_HFC23y
CO2_NGycalculated from Q_NGy
measured
measured
measured
ND_HFC23y measured
CO2_Powery
calculated from Q_Powery
Q_HCFCy
measured
HFC 23
Q_Steamy
measured
CO2_Steamy
calculated from Q_Steamy
Steam
Fuel (LNG)
1200 oCIncineration furnace (Thermal Oxidizer)
Cooling Tower
Air
Ca(OH) 2
Neutralization tank
Filtrate
CaF2
Gaseous effluent
Absorption Tower
Absorption liquid tank
Water
Alkali solution
Precipitation tank
HCF23_soldmeasured
B_HFC23ycalculated from domestic regulation status
Purity_HFC23y
measured
Q_HFC23y
calculated from q-HFC23y
and Purity_HFC23y
Environmental pollutants are also monitored
Project Validation and Registration Project Validation and Registration Operational Entity to judge whether the Project is validated as a CDM project Validation check points
CDM participation requirements(incl. host country’s approval/confirmation document to assist its SD)
Stakeholders’ comments and the responses Environment impact assessment Baseline setting (with “approved” methodology and “anticipated” value)
Whether the methodology is applied appropriately? Evidences needed…
Monitoring Plan and methodology (incl. baseline emissions) Operational Entity opens the PDD etc for public and invites public comments.
The OE makes Validation Report available for public and requests it to register. Registration by the Executive Board
Within 8 weeks after request by the OE If review requested, the EB should decide within following 2nd meeting
Request by the EB member (more than 3) or the Party concerned
Operational Entity to judge whether the Project is validated as a CDM project Validation check points
CDM participation requirements(incl. host country’s approval/confirmation document to assist its SD)
Stakeholders’ comments and the responses Environment impact assessment Baseline setting (with “approved” methodology and “anticipated” value)
Whether the methodology is applied appropriately? Evidences needed…
Monitoring Plan and methodology (incl. baseline emissions) Operational Entity opens the PDD etc for public and invites public comments.
The OE makes Validation Report available for public and requests it to register. Registration by the Executive Board
Within 8 weeks after request by the OE If review requested, the EB should decide within following 2nd meeting
Request by the EB member (more than 3) or the Party concerned
Small Scale CDMSmall Scale CDM Definition (mutually exclusive by component; ceiling for creditation)
<15 MW renewables (RE: indicative list; 15 MW: catalog capacity; MW: MW(e)) <15 GWh/yr EE (EE: list; activity down: no; BaU minus project) <15 kt-CO2e/yr (threshold: Project emissions; list)
Bundling/unbundling Bundling: OK; Debundling: no
Baseline Regular revision Benchmarking (multi-project) methodologies: given in advance Simplification in procedures (also for monitoring) Share of Proceeds: lower (LDC: zero)
Project Cycle; Crediting Period Same as others
OE OEs for Validation and verification/certification can be the same Local OE: desirable
Simplification In each procedures (not skipping some procedures)
Definition (mutually exclusive by component; ceiling for creditation) <15 MW renewables (RE: indicative list; 15 MW: catalog capacity; MW: MW(e)) <15 GWh/yr EE (EE: list; activity down: no; BaU minus project) <15 kt-CO2e/yr (threshold: Project emissions; list)
Bundling/unbundling Bundling: OK; Debundling: no
Baseline Regular revision Benchmarking (multi-project) methodologies: given in advance Simplification in procedures (also for monitoring) Share of Proceeds: lower (LDC: zero)
Project Cycle; Crediting Period Same as others
OE OEs for Validation and verification/certification can be the same Local OE: desirable
Simplification In each procedures (not skipping some procedures)
Transfer of GHG UnitsTransfer of GHG Units
AAUAAU
RMURMUCERCER
ERUERU
CDM Project
CERCER
Generating CERs
CDM RegistryPending a/c
To the participants’ a/c
JI Project
ERUERU
Host country converts AAU or RMU to ERUs
To the participants’ a/c
Annex I initial allocation + Sink
AAUAAU
RMURMU
Base year GHGs x Annex Bx 5 years
Additional absorption
Each Party issues to Its holding a/c
Distribution to firms…
AAUAAU RMURMU
CERCER
ERUERU
Emissions Trading
Can non-Annex I sell CERs?Can non-Annex I sell CERs? Non-Annex I can hold CERs in its account in the CDM
Registry [Government and entities] However, it is uncertain whether such CERs can be
transferred… Not prohibited, but not allowed… Emissions trading is for Annex B countries (only?) Eligibility to participate in Kyoto mechanisms is set for
Annex I countries only At least some country (e.g., Japan) does not allow…
Risky for non-Annex I entities to hold CERs… Instead, they can get monetary profits or ask Annex I
partner(s) to do so on behalf; Or, set up an account in Annex I.
Non-Annex I can hold CERs in its account in the CDM Registry [Government and entities]
However, it is uncertain whether such CERs can be transferred… Not prohibited, but not allowed… Emissions trading is for Annex B countries (only?) Eligibility to participate in Kyoto mechanisms is set for
Annex I countries only At least some country (e.g., Japan) does not allow…
Risky for non-Annex I entities to hold CERs… Instead, they can get monetary profits or ask Annex I
partner(s) to do so on behalf; Or, set up an account in Annex I.
GHG Market PerspectivesGHG Market Perspectives Market value of CERs…
Once issued, all CERs (except for sink-related CERs) have the same value
Currently, CER value depends on… Methodology status
Approved or expected to be approved or …? Possibility of success of the project
(Proven) experience of the project participants Technology CDM [methodology, validation, …] Name value in the GHG/CER market
Possibility of unexpected failure Host country’s policy — Country risks
Ordinary FDI policy CDM policy
Good collaboration between hosts and investors is must Companies and governments
Market value of CERs… Once issued, all CERs (except for sink-related CERs)
have the same value Currently, CER value depends on…
Methodology status Approved or expected to be approved or …?
Possibility of success of the project (Proven) experience of the project participants
Technology CDM [methodology, validation, …] Name value in the GHG/CER market
Possibility of unexpected failure Host country’s policy — Country risks
Ordinary FDI policy CDM policy
Good collaboration between hosts and investors is must Companies and governments
GHG Market DevelopmentGHG Market Development Voluntary reductions market
Emission (reductions) market under authorized institution
Voluntary reductions market
Emission (reductions) market under authorized institution
Financialpre-compliance,
Voluntary
↓
CDM
Retail Market
Regional Markets- EU
National Markets –Japan ??
Other National Markets ??
US Market ?
??
??
??
National markets - Denmark
National Markets –United Kingdom
CO2e.com (modified)Pre-2008
Intra-Firm trading
Shell
BP 2005: next milestone…
Host Country’s InstitutionHost Country’s Institution Designated National Authority (DNA)
How to establish/maintain the DNA? How to reduce bureaucracy and enhance efficient
decision-making? How to call domestic entities’ attention to this new
business Latin-American countries’ experiences
Risks associated with host country’s CDM policy is crucial to invite CDM projects e.g., many projects proposed in Latin American
countries which already established their CDM policy and DNA AIJ experiences are important
Clear process and criteria for approval process and supporting scheme
Designated National Authority (DNA) How to establish/maintain the DNA? How to reduce bureaucracy and enhance efficient
decision-making? How to call domestic entities’ attention to this new
business Latin-American countries’ experiences
Risks associated with host country’s CDM policy is crucial to invite CDM projects e.g., many projects proposed in Latin American
countries which already established their CDM policy and DNA AIJ experiences are important
Clear process and criteria for approval process and supporting scheme
Domestic Incentives in Annex IDomestic Incentives in Annex I Clear incentives needed…
e.g., domestic emissions trading scheme Government’s procurement Carbon funds Other supports
Information, negotiation, … Responding to the uncertainties
e.g., independence of the KP entry into force Anyway, CER is fungible in the EU-wide
emissions trading scheme Existing of the market
Clear incentives needed… e.g., domestic emissions trading scheme Government’s procurement Carbon funds Other supports
Information, negotiation, … Responding to the uncertainties
e.g., independence of the KP entry into force Anyway, CER is fungible in the EU-wide
emissions trading scheme Existing of the market
Project Selection and FinancingProject Selection and Financing Design non-CO2 gases reductions and/or renewables
High GWP gases enhance the profitability of CDM project e.g., Landfill CH4, HFC decomposition, CH4 in biomass
residue, … Design other values than GHG reductions
Maximizing co-benefits Underlying project
+ CDM part (additional reductions) Underlying project:
OK for profitable or ODA project Utilization of higher technology Risk reduction How to finance underlying part?
Financial sector people have not known carbon-related value yet…
Design non-CO2 gases reductions and/or renewables High GWP gases enhance the profitability of CDM project e.g., Landfill CH4, HFC decomposition, CH4 in biomass
residue, … Design other values than GHG reductions
Maximizing co-benefits Underlying project
+ CDM part (additional reductions) Underlying project:
OK for profitable or ODA project Utilization of higher technology Risk reduction How to finance underlying part?
Financial sector people have not known carbon-related value yet…
UnderlyingProject
CDM Part(additional)
How to Utilize Public Money in CDMHow to Utilize Public Money in CDM Public funding for CDM projects is not to result in
the diversion of ODA… ODA utilization and Sustainability judged by the host country
Consultation between host/investors needed on needs/possibilities
Financing the project by ODA Underlying part by ODA + additional reduction part (CDM part)
by others Screening the on-going/planned ODA projects and assess the possibility
for additional GHG reductions Sustainability-oriented project implementation and support
(by packaging with other project) Example: PV project in small island states
Redress the regional imbalance of CDM projects Private participants focus on profitable geographical region
Supporting smooth implementation of CDM projects Capacity building Information clearinghouse role to match needs and seeds, etc…
Public funding for CDM projects is not to result in the diversion of ODA… ODA utilization and Sustainability judged by the host country
Consultation between host/investors needed on needs/possibilities
Financing the project by ODA Underlying part by ODA + additional reduction part (CDM part)
by others Screening the on-going/planned ODA projects and assess the possibility
for additional GHG reductions Sustainability-oriented project implementation and support
(by packaging with other project) Example: PV project in small island states
Redress the regional imbalance of CDM projects Private participants focus on profitable geographical region
Supporting smooth implementation of CDM projects Capacity building Information clearinghouse role to match needs and seeds, etc…
Matching Needs and SeedsMatching Needs and Seeds Status-Quo
Ad-Hoc based needs-seeds matching How to invite needs?
Capacity building private sector, (central/local) gov’t officials, NGOs,…
Institutional DNA and others(?)
How to invite seeds? From Annex I
(ir)regular business forum in Annex I From non-Annex I
financial sector, private sectors, Role of Information Clearinghouse Needed…
Internet-based institution Other channels…
Who plays? Host (central/local) government, Investor government, MDB, Private sector, …
Status-Quo Ad-Hoc based needs-seeds matching
How to invite needs? Capacity building
private sector, (central/local) gov’t officials, NGOs,… Institutional
DNA and others(?) How to invite seeds?
From Annex I (ir)regular business forum in Annex I
From non-Annex I financial sector, private sectors,
Role of Information Clearinghouse Needed… Internet-based institution Other channels…
Who plays? Host (central/local) government, Investor government, MDB, Private sector, …