Climate_Change__Road_to_Copenhagen_and_Beyond.ppt
- 1. Climate Change: Road to Copenhagen and beyond © 2009 UNDP. All Rights Reserved Worldwide. Not For Distribution Without Prior Written Permission. Dmitry Goloubovsky, Regional Carbon Finance Specialist for Central Asia Daniela Stoycheva, Climate Change Policy Advisor Matt Spannagle, MDG Carbon Facility Technical Manager UNDP Central Asia Cluster Meeting Almaty, Dec 3-5, 2009
- 2. Climate change as an opportunity to shift to green development path Copenhagen is not road-end, it’s a beginning (hopefully ) UNDP can have a role! 1
- 3. Summary Climate change: state of play Climate negotiations: update and implications for CA BRC regional capacity building program for climate change MDG Carbon Facility: status and prospects 2
- 4. 3 The merchant vessel Fraternity passed Nowaya Zemlya, regarded by Russia as the official exit point of the Northern Sea Route. The Times, Sep 14, 2009
- 5. 21st century climate challenge Avoiding dangerous climate change requires recognition of: •climate inertia and cumulative effects • urgency of action • global scale of issue 4
- 6. Projected impacts of climate change 5 Source: Stern 2006
- 7. 6 Source: New Scientist, 2009
- 8. 21st century carbon budget 7 A sustainable GHG emissions pathway (against 1990): – The world cuts 50% by 2050 with a peak by 2020 – Developed countries cut 80% by 2050 – Developing countries cut 20% by 2050 UNDP 2007/2008 HDR estimated 21st Century carbon budget at 1,456 Gt CO2 Source: UNDP HDR 2007/2008
- 9. Delaying action is dangerous and costly Source: Stern 2006 8
- 10. 9 Adaptation: reduces vulnerability to climate change impacts; reduces losses Greenhouse gas emissions Climate change impacts Global Climate Change Mitigation: reduces emissions, reduces magnitude of climate change Mitigation and adaptation
- 11. “The Copenhagen Diagnosis” 2009 • Surging greenhouse gas emissions – 40% over 1990 • Recent global temperatures demonstrate human- induced warming – 0.19oC/decade • Acceleration of melting of ice-sheets, glaciers and ice-caps • Rapid Arctic sea-ice decline – 40% over forecasts • Current sea-level rise underestimated – 80% over forecasts • Sea-level predictions revised – 100% over forecasts • Delay in action risks irreversible damage • The turning point must come soon – to keep within 2oC emissions should peak by 2015-2020 10
- 12. Climate change: state of play Climate negotiations: update and implications for CA BRC regional capacity building program for climate change MDG Carbon Facility: status and prospects 11
- 13. Current climate change framework • UN Framework Convention on Climate Change : • Stabilization of GHGs to prevent dangerous changes to climate system • Kyoto Protocol • Legally binding GHG emission reduction targets for developed countries and EITs – 5% against 1990 over 2008-2012 • Flexible mechanisms (CDM/JI) • Expires in 2012 12
- 14. The Bali Action Plan • Adopted at COP-13 in Bali in 2007 • Roadmap to reach an agreed outcome on post- 2012 regime and adopt a decision at COP-15 in Copenhagen in December 2009 • Mitigation commitments or actions by ALL countries: – Measurable, reportable and verifiable nationally appropriate mitigation commitments or actions (…) by all developed country Parties; – Nationally appropriate mitigation actions (NAMAs) by developing country Parties in the context of sustainable development…in a measurable, reportable and verifiable manner 13
- 15. Post -2012 international climate regime • Entering into new era of green global economic growth, through significant mitigation of GHG emissions and generating funding for adaptation and thus creating new investment opportunities 14
- 16. Four political essentials to be resolved to make Copenhagen 2009 work 1. Clarity on targets for industrialized countries 2. Clarity on nationally appropriate mitigation actions of developing countries 3. Clarity on how to generate support for mitigation and adaptation in developing countries 4. Clarity on the governance structures to manage the generated support However, no definitive agreement on any of the four pillars as of yet!!! 15
- 17. Current status: proposed 2020 targets by developed countries Australia - 15% or 25% 2000 Belarus - - 5-10% 1990 Canada - - 20% 2006 EС-27 - - 20-30% 1990 Japan - - 25% 1990 Lichtenstein - - 20-30% 1990 Monaco - 20% 1990 New Zealand - - 10-20 % 1990 Norway - - 40% 1990 Russian Fed. - - 10- 15% 1990 Switzerland - - 20-30% 1990 Ukraine - - 20% 1990 USA - - 17% 2005 16
- 18. Current status: financing and governance • EU announced plans to allocate €22-50 bn/year to developing countries to tackle climate change by 2020 • At least €100 bn/year needed! • Governance structures: – USA proposal: all parties to contribute (excl. LDCs), WB – EU proposal: all parties to contribute (excl. LDCs), GEF – Mexican proposal: all parties, voluntary for non-Annex I, trustee? 17
- 19. Current status: low carbon strategies • A scenario or set of scenarios that outlines a long- term, low-emission pathway (80% reduction by 2050 for developed, ambitious targets for developing) • A characterization of the policies, measures or program that could be undertaken to achieve the pathway described above • NAMAs: – Nationally and internationally supported actions, MRV – Enabled by technology, finance and CD – Contribute to economic growth and SD – Registered 18
- 20. Current expectations for Copenhagen • Legally binding agreement impossible • Instead, Danish PM has been “consulting with key stakeholders” on a potential “political agreement”: – 5-6 pager – keeping within 2oC temperature increase – emissions to peak by 2020 and then go down – 50% emission reductions by 2050, but no medium-term targets; 80% of that by developed countries • But, opposed by developing countries unwilling to accept “targets or caps” • Legally binding treaty – delayed at least until June 2010 (or Dec 2010 COP in Mexico) 19
- 21. Expected outcomes from Copenhagen relevant for UNDP support to countries • Support countries to formulate and implement low carbon development and carbon resilient strategies and action plans, including on REDD+ • Support in the implementation of the above strategic documents and NAMAs • Strengthening of enabling environments at the national level, including policy and legal and regulatory frameworks 20
- 22. Expected outcomes from Copenhagen relevant for UNDP support to countries • Enhancing the capacities to monitor and report on climate change actions (MRV), including for preparation of national communications (inventories) • Supporting participation in old and new flexible mechanisms • Strengthening structural and institutional capacity for economic diversification; and • possibly others after the agreement is finalized 21
- 23. Climate change: state of play Climate negotiations: update and implications for CA BRC regional capacity building program for climate change MDG Carbon Facility: status and prospects 22
- 24. Regional CD program for CC: overview • Dedicated capacity in BRC and in the region • Key areas of assistance: – Institutional framework and capacity development for CDM/JI => DNAs and project procedures in Kyrgyzstan, Tajikistan, Uzbekistan – Building in-country expertise for carbon projects, advising governments on CC-related issues => low carbon strategy in Kazakhstan*, grid EF Kyrgyzstan – Mobilizing resources for regional and national projects => over $1.5m mobilized (co- /parallel) – Building CO in-house capacity for carbon projects => at least 28 carbon projects identified – Support in climate negotiations 23
- 25. Regional CD program for CC: plans • Draft low-carbon development strategies for number of countries (at least one from all the sub- regions) • Develop proposal for REDD+ activities and CD for undertaking REDD+ actions (e.g. establishment of focal points, legislative changes, etc.) • Build capacity for more efficient participation in the revised CDM/JI, programmatic CDM/JI and the new carbon trading mechanisms • Build capacity for more efficient participation in the international climate change negotiations 24
- 26. Climate change: state of play Climate negotiations: update and implications for CA BRC regional capacity building program for climate change MDG Carbon Facility: status and prospects 25
- 27. Objectives Broaden access to carbon finance by promoting carbon projects with high MDG impact in under-represented developing countries Increasing financing available to developing countries by developing new areas for the carbon market Goal CC is a disproportionately high threat to the poor, but also an opportunity to leverage carbon finance towards the achievements of MDGs Transform the carbon market to leverage the transition to low carbon sustainable development in developing countries MDG Carbon Facility CO2e MDG SD Inclusive Access MDG Carbon Facility 26
- 28. MDG Carbon Facility Mission: Market Transformation MDG Impact Geographical spread Current CDM Market Objective for MDG Carbon Facility 27
- 29. Grant Assistance A mutually reinforcing 4-prong approach • Assisting governments with policy change: raising awareness & policy dialogue • Developing technical capacities • Developing new instruments targeting emission reduction projects with high development dividends Project Development Services • Developing a representative pipeline of carbon projects through its innovative partnership model with a financial services provider MDG Carbon Facility CO2e MDG SD Inclusiv e Access 28
- 30. 1. Engaging in policy change • Active/founding partner of the Nairobi Framework • CDM Executive Board's 'informal consultation‘ panel • Regular invited to speak on SD & geographic diversity at high profile events (eg. UNFCCC CMP meetings, Carbon Expo) • Technical Advisory Committee of the Gold Standard • Member of the private sector Project Developers forum 2. Developing technical capacity 3. Developing new carbon market instruments • Training of DNAs (EE&CIS 8; Latin America 4) • Creation of operational CDM market framework in 6 Sub-Saharan countries • National workshops to raise awareness of policy makers • CDM scoping & assessment studies in 5 African countries • Support to DNAs (development of SD criteria) • How-to guides (National Institutional Frameworks for Kyoto Protocol Flexible Mechanisms in EE&CIS) • Member of workgroups to develop voluntary carbon market standards (CAR & VCS) • Initial pilot projects in the voluntary markets • Policy and architecture (invited to contribute to Montreal Protocol MOP) • Communications (video, brochures, media articles) MDG CF Achievements Grant Assisted 29
- 31. Grant Assistance Capacity development Advocacy New market instruments Grant Assistance Capacity development Advocacy New market instruments MDG CF Project development services How does it work? UNDP MDG Carbon Facility Self-financed (CRF) Grant Assistance Capacity development Advocacy New market instruments Grant Assistance Capacity development Advocacy New market instruments Emission Reduction Projects Payment of Proceeds from Sale of Carbon Credits Technical Assistance in Project Development Cost Recovery Fee (CRF) per Project Delivery of Carbon Credits UNDP MDG Carbon Facility (Fortis Bank exclusive partner for the 2-year pilot) Financial Partner Self Financed 30
- 32. •Burkina Faso •Ethiopia •Mauritius •Mozambique •Kenya •Namibia •Nigeria •Rwanda •Tanzania •El Salvador •Honduras •Peru •Uruguay •Brazil •Macedonia •Ukraine •Uzbekistan •Russia •Azerbaijan •Albania •Armenia •Kyrgyzstan •Georgia •Cambodia •Mongolia •Sri Lanka •Indonesia • Iran •Thailand •Malaysia •Bangladesh • Lao • Fiji •Yemen •Egypt •Lebanon Data as of June 2009 36 Host Country Agreements 31
- 33. The projects – a diverse portfolio of countries and sectors 6 projects at the validation stage (ERPA signed): – Reduced Natural Gas Leakage (with a MDGIS), Uzbekistan – Treatment of Palm Oil Mill Effluent, Honduras – Ahuachapan Geothermal Upgrade, El Salvador – Britannia 25 MW Wind Farm, Mauritius – Lugansk Landfill Gas recovery, Ukraine – Water Treatment in Secondary Schools, Rwanda Pipeline of 7 projects (undergoing due diligence): – Methane Capture from agricultural wastes, Macedonia – ONEA Ouagadougou sewage methane recovery, Burkina Faso – Luma River small hydro, Albania – Various hydro power plants, Kyrgyzstan – Mariinsk district heating, Russia – Energy Efficient Cook Stoves in schools, El Salvador 32
- 34. MDG Impact assessment and project selection Project-intrinsic MDG benefits e.g. employment/income, access to energy air quality improvement + = MDG Score Intrinsic and extrinsic MDG impacts are quantified Quantification based on “no. of people impacted under each MDG” PP not required to re-invest CERs into extrinsic benefits but may do so to increase MDG Impact Maximization of portfolio’s development dividend Project-extrinsic MDG benefits e.g. invest part of CER income to: schools or health clinics, HIV education campaigns, environmental restoration 33
- 35. Some projects in the portfolio a closer look REDUCED NATURAL GAS LEAKAGE (with MDGIS), UZBEKISTAN LUGANSK LANDFILL GAS RECOVERY, UKRAINE TREATMENT OF PALM OIL MILL EFFLUENT HONDURAS BRITANNIA 25 MW WIND FARM, MAURITIUS WATER TREATMENT PROJECT, RWANDA • Greening/MDG Investment Scheme for CER revenue to be invested in Aral Sea projects delivering on MDGs • Rehabilitation of landfill site • Improved air quality, generation of energy from renewable source, improved solid waste management practices • Project developers are a local co-operative of farmers with no prior CDM experience • Revenues support a school and medical centre for the local community • Host country’s first wind farm and first CDM project • Project catalyzing development of a Renewable Energy feed-in-tariff • Project delivering on multiple MDG benefits... SD & MDG BENEFITS 34
- 36. Water Treatment Project, Rwanda will.. – save 100,000 t CO2e/yr, – reduce deforestation pressure, – deliver palpable health benefits to local communities all over Rwanda and the benefits go on… including an overdue improvemen t of women’s wellbeing 100k/yr CERs and over $10Million (over 10 yr) 300k liters/day of safe drinking water to 15,000 people Saving >> time (firewood gathering – mostly by women and children) Savings of $$$ to schools (and healthier kids) Savings of $$$ & medical staff time to clinics Making progress on MDGs 35
- 37. The financial partnership has evolved •Exclusive partnership with Fortis expired after 2 years •Fortis has restructured and has change in ownership to BNP Paribas •No impact on ‘signed’ projects •For new project sourcing, move to ‘ad-hoc model” - identifying buyers on a case by case basis •Advantages: • increased flexibility and better able to customize our offer to project proponent’s needs and service more different clients • explore different market approaches (help design of MDGCF 2) •Disadvantages: • Greater uncertainty • Potentially higher transaction costs for UNDP 36
- 38. MDG Carbon – what it means for now? • Less focus on adding new countries • Primary focus on executing current portfolio • Still want new projects but: – Less ‘certainty’ (or more flexibility) – Recognize there are limited number of projects that will benefit largely from CERs in the Kyoto period (to 2012), post- 2012 more important – Outcomes of Copenhagen will be significant on projects being developed now – Need to manage the ‘carbon layer’ of the project optimally with the underlying project timelines – ie – what is in the best interest of the project? 3737
- 39. MDG Carbon future? • Is climate change going to be an ongoing priority for UNDP? • Are carbon finance/offsets/CDM/market mechanisms going to continue to be a major part of global response? (those are rhetorical questions!) 38 38
- 40. MDG Carbon future! • Market mechanisms will continue, but their priority, type, rules, and value (price) may well change substantially post-2012 • Develop MDGCF-2 (MDGCF – the UNDP strikes back?) • Aim to start MDGCF-2 mid-2010 • What will it look like? 3939
- 41. MDG Carbon future! Without pre-empting lessons learnt… likely: – Aim to be more focused on UNDP’s strengths – more structured approach to addressing the ‘MDG’ part of MDGCF – Aim to get a higher price for ‘MDG CERs’ – Aim to be ‘in front’ rather than ‘late starter’ – Fully develop voluntary carbon arm of MDG Carbon – Aim to incorporate relevant links to sectoral, NAMAs, LCDP etc 4040
- 42. Thank you!