The CDM: current status

Transcription

1 The CDM: current status Department of Climate Change, February 9, 29 Axel Michaelowa, Perspectives GmbH 28 Perspectives GmbH Elements of presentation CDM institutions and rules Key concepts Layers of decisionmaking and the CDM project cycle The CDM market Players Prices Quantities and project types Performance

2 The Kyoto Mechanisms CDM ITL To avoid fictitious reductions, a complex procedure has been established Kyoto commitment CERs AAUs, ERUs Country 1 Country 2 Emissions trading JI Kyoto commitment Key CDM terms Baseline - Emissions level that would have existed in the business -as-usual situation (in the absence of the CDM project) Certified Emission Reductions (CERs) - Certificates issued for the emissions reductions achieved by the CDM projects. They can be sold to companies and governments in industrialized countries Additionality - A CDM project should be motivated by the revenue coming from the CER sales. If it is already an attractive business without the CER benefit, it is not additional

3 Key CDM terms II Crediting period - Duration for which a CDM project can generate CERs. Either 1 years or three times 7 years Small-scale projects - Projects of less than - 15 MW for renewable energy - 6 GWh annual savings for energy efficiency - 6, t annual CO 2 reductions for other types - They benefit from - simplified rules, especially pre-defined baseline methodologies - lower fees Currently 22 applications Status of the CDM project cycle (31/1/29) Rulebook 123 baseline and monitoring methodologies 4 methodologies pending Investor countries Host countries Countries Stakeholder Observers Project partners authorise DNA Meth Panel comment new rules within 8 weeks comment within 3 days Project design document: Baseline Monitoring Approval Methodology if first of its kind changes elects decides on new rules within 4 months (1 members) 5 developing countries accredits Validator (DOE): Validation COP/MOP elects Executive Board 4 industrial countries Involved countrie s 1 AO SIS 3 members can propose review within 15 days to be donewithin 3 days Verifier: 6 Project partners Certification 2% adaptation tax issues withholds RIT 137 spot checks 3149 members propose registers review within 8 >9 weeks CDM Monit project oring report 465 CERs Involved countries

4 Key principles of CDM rules Layers of rules - International treaties: Kyoto Protocol - COP decisions - EB decisions - Panel recommendations Stable Pillars vs. discretionary, short-term decisionmaking Lack of formal repository or hierarchy of decisions - Catalogue of decisions: first step Methodology development: no learning? Number of Methodologies Submission Round A C/ withdrawn Pending

5 Methodologies: successes and failures Biofuel Biomass energy Biogas Cement EE households EE industry EE own generation EE supply EE distribution Fuel switch Fugitive emissions Industrial gases Transport Waste approved rejected Increasing stringency of the EB 3% 25% 2% 15% 1% 5% Share of projects with request for review and no review Share of projects that had a review Share of projects that was rejected % 24/ Request registration date in the letter from the DOEs

6 Shifts in stringency of the EB Setup of RIT Sufficient EB staff No request for review History of projects requesting registration each month % 1% 8% 6% 4% 2% % % of all projects registered automatically No final EB decision yet after review request Withdrawn Rejected Registered after corrections after review Registered after review Registered after corrections after request for review Registered after request for review Registered automatically Nov 4 Feb 5 Mai 5 Aug 5 Nov 5 Feb 6 Mai 6 Aug 6 Nov 6 Feb 7 Mai 7 Aug 7 Nov 7 Feb 8 Mai 8 Aug 8 Nov 8 Percentage of all projects that were registered automatically Supply and demand (million t ) -532 Russia -256 Ukraine -185 Belarus* -219 EU accession Other OECD 11 Canada? Japan EU Source: assumption that economic crisis will lead to average emissions in at the level of 25

7 CER and ERU demand (million ) Total: > 9 billion Private banks Volume (million Euros) Development banks Governments World Bank EBRD ADB KfW Compania Andina de Fomento Norway Austria Portugal Japan Ireland Belgium Denmark Switzerland Dutch tenders France Luxembourg Sweden Finland Germany Climate Change Capital Sindicatum TEP GGAP (Natsource) Peony Capital Grey EDF trading IXIS The exponential growth of carbon markets 5 4,895 Global markets 4 Turnover (million t) of the segments 3 2 1,799 1,632 2,676 Volume (million t) , EU trading scheme CDM CER spot market JI Australia, US

8 Prices ( ) No approved methodology Approved methodology Registered CDM project Issued CER ERU spring summer EU allowance Huge gap between different qualities closes over time The CDM goldrush since May Number of Projects each month Dez 3 Mrz 4 Jun 4 Sep 4 Dez 4 Mrz 5 Jun 5 Sep 5 Dez 5 Mrz 6 Jun 6 Sep 6 Dez 6 Mrz 7 Jun 7 Sep 7 Dez 7 Mrz 8 Jun 8 Sep 8 Dez 8 Number of projects with CERs issued Not Yet Submitted/withdrawn/rejected Registration Requested but no issuance First unilateral project registered

9 CER supply project types Million CERs Dez 3 Mrz 4 Jun 4 Sep 4 Dez 4 Mrz 5 Jun 5 Sep 5 Dez 5 Mrz 6 Jun 6 Sep 6 Dez 6 Mrz 7 Jun 7 Sep 7 Dez 7 Mrz 8 Jun 8 Sep 8 Dez 8 Afforestation & Reforestation Fuel switch Energy Efficiency CH4 reduction & Cement & Coal mine/bed Renewables HFC & N2O reduction Share of CERs by project types Fuel switch 7% Demand-side EE 1% Afforestation & Reforestation.4% Transport.2% HFCs, PFCs & N2O reduction 26% Supply-side EE 11% CH4 reduction & Cement & Coal mine/bed 19% Renewables 36%

10 Share of types in numbers of projects Demand-side EE 5% Fuel switch 3% Afforestation & Reforestation.8% Transport.2% HFCs, PFCs & N2O reduction 2% Supply-side EE 1% CH4 reduction & Cement & Coal mine/bed 16% Renewables 63% Changing host country fashions Projects 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Mexico Brazil China India Q1-4 Q2-4 Q3-4 Q4-4 Q1-5 Q2-5 Q3-5 Q4-5 Q1-6 Q2-6 Q3-6 Q4-6 Q1-7 Q2-7 Q3-7 Q4-7 Q1-8 Q2-8 Q3-8 Q4-8

11 CER issuance (million) % 9% 8% 7% 6% 5% 4% 3% 2% 1% % Share of all issued CERs Egypt Chile Vietnam Mexico Brazil South Korea India China CERs issued (project types) Supply-side EE 4% CH4 reduction & Cement & Coal mine/bed 7% Renewables 12% Demand-side EE Fuel switch % 1% Affores tation & Reforestation.% Transport % HFCs, PFCs & N2O reduction 76%

12 Increase of lost projects Number of Projects each quarter Q1-4 Q2-4 Q3-4 Q4-4 Q1-5 Q2-5 Q3-5 Q4-5 Q1-6 Q2-6 Q3-6 Q4-6 Q1-7 Q2-7 Q3-7 Q4-7 Q1-8 Q2-8 Q3-8 Q4-8 1% 8% 6% 4% 2% % The percentage submitted for registration Not Yet Submitted/withdrawn/rejected Registration Requested % requesting registration Generic underperformance % 4 2 N2O HFC-23 Hydro WHR Fuel switch Biopower EE Industry Wind Biogas Manure Landfill gas Only types with over 5 projects or over 5 million CERs issued

13 New book on the CDM CDM promotes the use of developing country fi-nancing to reach industrial country commitments! New book on the CDM