pelangi yayasan pelangi indonesia doing business while mitigating climate change moekti h....

Yayasan Pelangi Indonesia

PELANGI

Doing Business while Mitigating Climate Change

Moekti H. Soejachmoen -Yayasan Pelangi Indonesia

Jakarta, 25 January 2006


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Structure of presentation

Climate change – what is it Causes of climate change Impacts of climate change – in

Indonesia? Tackling climate change globally –

UNFCCC More actions – the Kyoto Protocol Clean Development Mechanisms


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WHAT IS CLIMATE CHANGE?


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CAUSES OF

CLIMATE CHANGE


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Natural Causes of Climate Change

Volcanoes eruption Forest fire Respiration process – O2 CO2

Organic decomposition – CH4


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Anthropogenic Causes Fossil fuel combustion

Electricity & power generation Transportation

Industrial process Cement industries Hydrocarbon based industries

Non-energy activities: Agriculture, farming & husbandry Waste disposal – municipal waste Deforestation & land clearing


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IMPACTS OF

CLIMATE CHANGE


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Diseases outbreak at El-Nino 1997/98 (WHO)


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1961-1990 (Source: Kaimudin, 2000)


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Predicted Impacts

Shifting of seasons – length and characteristics as well as period and duration

Changing of precipitation – strength, length and characteristics

Extreme weather – stormy weather, typhoon, extreme drought

Desertification – especially for arid area


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Predicted Impacts

Melting of ice (cryosphere) – not only polar ice but also other ice-caps

Sea level rise – small and flat islands Tropical diseases – malaria, dengue Degradation of biodiversity – coral reef,

fishes Food (in-)security – failed harvesting


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Impacts in IndonesiaIn Indonesia, based on studies (1994,

1998): Sea level rise – most coastal zone especially in

northern Java; eastern Sumatera; southern, eastern & western Kalimantan; western Sulawesi; swamp area in western and southern of Papua.

Impacts will be: Relocation of coastal population Loss of land Infrastructure and communication damages Special case for Jakarta – already sinking due to

draining of groundwater table, soil compression because of heavy construction. The sea level has risen 4.5 mm annually due to tectonic movements


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Agriculture – as impact of drought, flooding and shift of precipitation pattern: Deterioration of soil quality Soil erosion/land slides Abrupt changes in water supplies Declining of agricultural products

Coastal zone: Sea water warming (0.2-2.5C) Coral bleaching Diminishing of productivity of marine

resources Migration of marine species Marine-based tourism will be affected

heavily


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Human health – increase of diseases incidence: Malaria – due to changes in mosquito

breeding habitat and changes in incubation period

Dengue fever – (similar case as malaria) Cholera & diarrhea – due to

contamination of water supply by flooding


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TACKLING CLIMATE CHANGE

GLOBALLY


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End of 1980s

World Meteorological Organization (WMO) observed changes of world climate and meteorology

1988 Intergovernmental Panel on Climate Change (IPCC) was established by WMO and UNEP

1991 Intergovernmental Negotiating Committee (INC) was established by UNGA

1992 Earth Summit in Rio de Janeiro: The UNFCCC was signed

1994 UNFCCC has entered into force

1995 1st Session of the Conference of the Parties (COP-1) to the UNFCCC


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1997 Kyoto Protocol was adopted

2005 Kyoto Protocol has entered into force

2005 11th Session of the Conference of the Parties to the UNFCCC, Serving as the 1st Meeting of the Parties to the Kyoto Protocol (COP-11/MOP-1)


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United Nations Framework Convention

on Climate Change [UNFCCC]


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The Ultimate Objective

… is to achieve, in accordance with the relevant provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.

Such a level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner.


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Parties under the UNFCCC

Annex I Countries – industrialized and countries with economy in transition. Commit to limit and to reduce their GHG emissions.

Non-Annex 1 Countries (Developing Countries) – voluntarily limiting and reducing their GHG emissions while developing the countries in a sustainable manner.


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Entered into force in 1994 after ratified by 50 countries

Number of ratifying countries: 189 COP-1 to COP-10:

Berlin Mandate (COP-1) Kyoto Protocol (COP-3) Buenos Aires Plan of Actions (COP-4) Deadlocked (COP-6) COP-6bis Marrakech Accord (COP-7) The Delhi Ministerial Declaration on

Climate Change and Sustainable Development (COP-8)


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KYOTO PROTOCOL


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The Target of Kyoto Protocol The Parties included in Annex I shall,

individually or jointly, ensure that their aggregate anthropogenic carbon dioxide equivalent emissions of the greenhouse gases listed in Annex A do not exceed their assigned amounts, calculated pursuant to their quantified emission limitation and reduction commitments inscribed in Annex B and in accordance with the provisions of this Article, with a view to reducing their overall emissions of such gases by at least 5 per cent below 1990 levels in the commitment period 2008 to 2012.


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Flexibility Mechanisms To assist Annex I to fulfill their

commitment Between Annex I:

Joint Implementation Emission Trading

With Non-Annex I: Clean Development Mechanism

However, Annex I has to undertake ‘Domestic Action’


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Entered into force: 16 Februari 2005 after ratified by 141 countries

Ratifying countries: 156 1st Meeting of the Parties to the KP

during the 11th COP to the UNFCCC in Montreal, end of 2005


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CLEAN DEVELOPMENT MECHANISMS


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Objectives of the CDM

To assist developing countries to support sustainable development and to contribute to the objective of the UNFCCC;

To assist industrialized countries to fulfill their emissions limitation and reduction commitments;


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Industrialized

countriesDevelopin

gcountries

How does CDM work?

Emissions Reduction

CertifiedEmissions Reduction

(CERs)

Targeted Emission

s Reductio

n


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Buyers

Governments – Annex I: Netherlands, Denmark, Canada, Austria, etc.

Commercial funds – Natsource, EcoSecurities, etc.

Public private funds – World Bank CF, KfW CF, Japanese CF, etc.

Large companies – Shell, Mitsui, etc. Traders – RWE Trading, Shell

Trading, etc.


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Sellers – CDM Developers

Consultants and developers – DPSolusi, PEACE, etc.

Technology providers Utilities Large industries – Indocement Municipalities Companies


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Institutional setting of CDM

Conference of the Parties serving as

Meeting of the Parties (COP/MOP)

Countries / Parties

CDM Executive BoardSecretariat

(Accredited) Operational

Entities:Validation

(Accredited) Operational

Entities:Verification

Designated National Authority

(DNA)

Project Proponents


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CDM Executive Board Members:

10 members 10 alternate members

Representing: Annex I countries Non- Annex I countries 5 UN region SIDs (small islands developing states)

Supported by: CDM Secretariat CDM Methodologies Panel CDM Accreditation Panel CDM Afforestation and Reforestation Working

Group CDM Small-Scale Projects Working Group


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Designated Operational Entity (DOE)

Validate the proposed CDM project activities Verify and certify the reduction of GHGs Complies with host country laws Demonstrate that has no potential conflict of

interest Maintain publicly available list of CDM it

works on Submit annual report to EB Make information from CDM project

participants publicly available


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Designated Operational Entity (DOE)

Up to 24 January 2006: 12 OEs accredited and provisionally

designated for validation 3 OEs (of those 12) also accredited for

verification and certification 24 Accredited Entities with indicative

letter


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Sectors under CDM*

Sectoral Scope Approved methodologies

1. Energy industries (renewable/non-renewable sources)

Large scale, small scale, consolidated

2. Energy distribution Small scale

3. Energy demand Large scale, small scale

4. Manufacturing industries Large scale, small scale, consolidated

5. Chemical industries Large scale

6. Construction -none-

7. Transport Small scale

8. Mining/mineral production Consolidated


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Sectors under CDM*Sectoral Scope Approved

methodologies

9. Metal production -none-

10. Fugitive emissions from fuels (solid, oil and gas)

Large scale, small scale, consolidated

11. Fugitive emissions from production and consumption of halocarbons and sulphur hexafluoride

Large scale

12. Solvent use -none-

13. Waste handling and disposal Large scale, small scale, consolidated

14. Afforestation and reforestation Large scale

15. Agriculture Large scale, small scale* As per 24 January 2006


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Steps to develop a CDM project

2 Documentation

7 Implementation & Monitoring

3 Public consultation

4 Validation by Operational Entity

5 Approval by National Authority

8 Verification & Certification by OE

9 Issuance of CERs by EB

10

Transaction of CERs

2 Methodological approval 6 Registration by

Executive Board

1 Feasibility & Due Diligence


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Methodology

To define baseline and/or monitoring methods

Up to 24 January 2006: 25 methodologies for large scale projects 14 simplified small scale methodologies 8 consolidated methodologies


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Additionality

To show that the proposed CDM project will reduce the GHG emissions compared to the baseline – to ensure that the proposed project is not (part of) the baseline scenario


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Validation

The process of independent evaluation of the project activity by a Designated Operational Entity: Requirement of CDM Annexes and relevant decision of COP/MOP Based on Project Design Document

Up to 24 January 2006: 84 project activities are open for public comments under validation process


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Host Country Approval

Host country Designated National Authority to endorse and approve the CDM project: The project is voluntary Support achievement of the national

sustainable development goal

The letter of approval to be attached to the PDD for registration to the EB


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Registration The formal acceptance of by the

Executive Board of a validated project as a CDM project activity

Is a prerequisite for the verification, certification and issuance of CERs

Up to 24 January 2006: 77 project activities are registered 62 project activities are submitted for

registration


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Project Implementation and Monitoring

Implementation of CDM projects after registration – some projects can start before the registration

Monitoring of project performance in reducing GHG emissions – based on the Monitoring Plan

Up to 24 January 2006: 9 projects have published their monitoring report


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Certification/Verification of CDM project

Verification is the periodic independent review and ex post determination by the DOE of the monitored reductions during the verification period Verification of CDM project activity based on the

monitoring report Verification report will be submitted by the Designated

Operational Entity to the CDM-EB

Certification is the written assurance by the DOE that, during a specified time period, a project activity achieved the reductions as verified.


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Issuance & Transaction of CERs

The certification report shall constitute a request for issuance to the CDM-EB of CERs equal to the verified amount

Up to 24 January 2006: 5 project activities (issued) – 646,561 CERs 2 project activities (request for issuance) –

1,674,763 CERs


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Price of CERs Risks:

Project risks Project partner risks Registration risks Delivery risks Transfer and issuance risks

Co-benefits: Social benefit Environmental benefit


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THANK YOU

PelangiJalan Pangeran Antasari 10Kebayoran Baru, Jakarta 12150Indonesia

Tel: +62 (21) 7280-1172Fax: +62 (21) 7280-1174www.pelangi.or.id [email protected]

pelangi yayasan pelangi indonesia doing business while mitigating climate change moekti h....

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