Capacity Development for the CDM
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1 Capacity Development for the CDM : Project Overview and Strategies September 29, 2004 Myung-Kyoon Lee mk.lee@risoe.dk
2 Brief of CD4CDM Donor: the Netherlands Ministry of Foreign Affairs Implemented in 12 developing countries by UNEP through its UNEP RISØ Centre on Energy, Climate & Sustainable Development Phase I: Feb nd quarter of 2003, preparation of national work plans Phase II: 3rd quarter of 2003 end of 2005, implementation of national work plans
3 Main Objective Create an enabling business & regulatory environment for CDM investment in target countries through Develop institutional capability & human capacity in selected public & private entities to participate in CDM project design, implementation, monitoring, etc. Support the establishment of DNA and its national project approval procedure Assist in creating national sustainable development criteria Assist in creating a pipeline of the CDM projects
4 Implementation Strategies On-site implementation: three-way collaboration among URC, RCs, and country teams: identification of target groups; capacity building for different groups by means of workshops, training sessions, and technical assistance and consultations, etc.; interregional and intra-regional sharing of experiences and information Background materials: internal expertise, involving regional centres and hiring external experts
5 Key Outputs Establishment and/or consolidation of DNA Formalized national project approval procedures CDM promotional publications & brochures Pipelines of CDM projects: PINs, PDDs A national CDM website Side-events at COP & SB and information dissemination National experts capable of CDM project design
6 Current Progress Asia Latin America ME & NA SSA Phase I completed completed completed completed KP ratification Cambodia, Philippines, Viet Nam Bolivia, Ecuador, Guatemala Morocco, R Egypt, S Uganda, A Mozambique DNA Viet Nam, Cambodia, Bolivia, Ecuador Morocco, Egypt Philippines Project portfolio Cambodia, Viet Nam, Philippines Bolivia, Ecuador Morocco, Egypt Uganda
7 Progress in Asia (1) Regional workshop for training of PDD and baselines in March, Cambodia Extended RW co-sponsored by IGES, Japan - government, private sector associations, civil society organization working on Climate Change, and media from 15 Asian countries. - awareness raising and a special session for baselines Regional Investors Forum in October in Philippines - PINs, PDDs, institutional preparations to be presented Cambodia - training sessions for DNA staff and various stakeholders - compiling CDM materials and distributing in CD-Roms - a web-site is under construction - SD criteria finalized - started developing project portfolio
8 Progress in Asia (2) the Philippines - conducted two roundtable meetings on the establishement of DNA - inputs on drafting the Executive Order to be signed by the President of the Philippines what will officially designate the Philippine DNA - presented project portfolio at Carbon Expo - VietNam - producing information materials to raise awareness - compiling materials for research and education on CDM - continuing to develop legal framework for CDM activities - consolidating DNA - preparing project portfolio - website:
9 Progress in LA (1) Two regional workshops in 2004: Aug. Bolivia, Dec. Argentina SD case studies in four countries: Bolivia, Colombia, Ecuador, Uruguay Bolivia - consolidating NPCC and CDM office - a legal framework, project approval procedure and guidelines, information clearing house under progress - initial project portfolio presented at Carbon Expo - producing documents:
10 Progress in LA (2) Ecuador - supporting CDM office - a legal framework, project approval procedure and guidelines, information clearing house under progress - project portfolio presented at Carbon Expo - Guatemala - institutional agreement to be defined - supporting CDM office - project approval procedure and guidelines under revision, information clearing house under progress
11 Progress in ME & NA (1) Regional CDM Investors Forum: Sep in Tunisia - PINs, PDDs, institutional preparations to be presented - both project and non-project countries invited Egypt - DNA established - KP expected to be ratified within a year - three small scale PDDs under development - national CDM council to convene this month and approve national project approval procedure.
12 Progress in ME & NA (2) Morocco - finalized three PDDs for normal scale CDM projects, and currently developing three PDDs for small scale projects - DNA operational, national CDM council established, national project approval procedure formalized - CDM Investors Forum in March 2004 : PINs and PDDs presented to potential buyers : MOUs signed with three Annex I governments -
13 Progress in SSA (1) Cote d Ivoire - DNA not yet established due to political situation - the model under discussion puts the DNA secretariat at National Environment Agency (ANDE) - other capacity building activities have continued: training of trainers, identifying and formulating potential CDM projects Mozambique - KP ratified in April 2004 and formed the DNA within the Min. for coordination of environmental affairs (MICOA) - training of CDM project facilitators on project feasibility and initial design in Feb regional training seminars currently on-going in Nampula, Beira, Xai-xai - a training programme for sectoral project developers planned in July 2004
14 Progress in SSA (2) Uganda - DNA established within Dep. of Meterology of Min. of Water, Lands and Environment - training workshop for project developers in March training seminars for civil society, NGOs, and community based organizations (CBOs) in May Dep. of Meterology together with Ungada Investment Authority presented Uganda s CDM opportunities at Carbon Expo -
15 Development of Background Materials Introduction to the CDM: 2002 CDM Information and Guidebook, 2nd ed.: Jun CDM legal issues Guidebook: Jun CDM and Sustainable Development: Jun Institutional strategy to promote the CDM in Peru: Jun A guidebook to baseline methodologies for CDM projects Bundling of small-scale CDM projects Case studies on the contribution of the CDM to SD in selected LA countries (Bolivia, Ecuador, Colombia, Uruguay)
16 Introduction to the CDM A popular guidebook to introduce the CDM to the general public. It summarizes the essence of the CDM including : a historical overview : a brief overview of the CDM project cycle : the national values and benefits of participation in the CDM : a national strategy to promote the CDM. It illustrates several examples of possible CDM projects based on previous AIJ, ALGAS, and PCF projects Published and distributed in 2002 and translated into 9 languages.
17 CDM Information and Guidebook (1) Focusing on the project cycle and PDD as well as touching various aspects of the CDM Ch. 2 overviews the CDM summarizing a brief project cycle and the national values and benefits of participation in the CDM. Ch. 3 visits the issue of SD from the perspective of a CDM project. This chapter presents an example of SD indicators and major steps of an SD evaluation of CDM projects. Ch. 4 explains each step of the project cycle with informative tables and numbers.
18 CDM Information and Guidebook (2) Ch. 5 shows how to fill out the PDD, with baseline methodologies. Ch. 6 provides an overview on impact of CERs on project viability, sources of funds and risk management. The last chapter, Ch. 7, reviews recent CER market transactions and price trends. Appendices present frequently asked questions and answers, a short overview of existing guidebooks, and a possible future list of eligible CDM projects categories.
19 CDM Legal Issues Guidebook The main objective is to provide developing country stakeholders with advice on legal and regulatory pitfalls host country CDM stakeholders need to watch for during the various stages of CDM project development. The Guidebook is intended to give as much examples and hints as possible on what could go legally wrong in a CDM project and the type of risks that may face both the CDM investor and the host country, while presenting logical and simple legal, contractual, and/or regulatory solutions. Want to show how developing countries can take care of their own interests and at the same time develop efficient CDM projects through alternative legal framework and CDM contractual agreements. This should be used as an eye opener, not as a tool for legal advice.
20 CDM Sustainable Development Impacts Providing an overview of how CDM projects can be evaluated in the context of SD. Following a general introduction on the linkage of CDM to SD, presented is the national development context of evaluating SD impacts of CDM projects. Introduction of SD in relation to CDM projects Short overview of what will be involved in an SD evaluation of CDM projects How to select and evaluate indicators How to use the SD evaluation in decision making Case studies illustrating different indicators and approaches Short overview of how other CDM capacity building projects or guidelines address SD aspects of CDM
21 Institutional strategy to promote the CDM in Peru It shows the way in which Peru has designed an institutional strategy to promote the projects eligible for the CDM. The description of this process might be useful to other countries interested in establishing DNA to participate in the CDM. Peru s activities in the CC negotiation and Peruvian legal and instutional context for the CDM In Operationalization of DNA, it describes problems encountered and how Peru has solved them including composition and structure of DNA and how to finance it.
22 Why Institutional Capacity Building? CDM projects are not automatically realized. International regulations on the CDM - a Party to the KP - DNA in place to approve CDM projects CDM is an investment scheme and investors want - a well-established institutional set-up, e.g. one-stop shopping - clear and transparent rules and approval procedure - low transaction costs, e.g. a short approval process and a low fee
23 Experiences from Previous CB Activities Donor competiton in certain countries Uncoordinated workshops and activities without follow-up and coordination - At the beginning, the workshops made a contribution to raise awareness but from a certain level, little value added. Flow back of a high share of project budgets into investor country or international consultants No funding for real institution buildings - the lack of institutions is the major barrier Source: Axel Michaelowa, CDM Host country institution building, 2003
24 Experiences from CD4CDM The progress depends on various factors - a high level political commitment - initial capacity related to CC - capability of country teams: political connection and private network - precise identificaition of national key players - plans based on needs assessment Coordination among and participation of relevant ministries important - particularly ministries in charge of energy, industry, economy, transportation and agro-forestry Trust among URC, RCs, and country teams is a key factor: close communications with national teams and regional centres Try to be country driven, needs-based approaches Allow flexibility in budget to the extent possible
25 General Recommendations view CC as opportunity as well as risk trust-building and confidence-building a market-oriented, customer-oriented approach awareness raising particularly for policy makers in the initial decision-making process of a country, a top-down approach is normally more efficient than a bottom-up approach: a high level commitment integrating the climate process into national development strategies to give a higher priority to climate change mobilizing the existing expertise: building upon the current institutional framework as much as possible rather than making a whole new structure, particularly in small countries political stability and predictability stability of professional staff: institutional memory Transparency and efficiency: low transaction costs learning by doing through a specific project is more efficient
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