NAMAs and MRV. Regional CDM/DNA Workshop. Luis López Martinelli and Bente Pretlove Havana, March 2011

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1 Regional CDM/DNA Workshop Luis López Martinelli and Bente Pretlove Havana, March 2011

2 DNV s core competence identify assess risk manage 2

3 Combat climate change Emission trading we validate and verify emission reduction projects Cleaner energy we assess and verify clean energy projects Carbon capture/storage we provide guidelines, assess risks and qualify new technology Energy efficiency we provide energy management services addressing both technical and organisational issues 3

4 Introduction Strong economic growth in many parts of the developing world has resulted in annual GHG emissions that rival or surpass many industrialized nations. In 2007, all countries agreed on the concept of Nationally Appropriate Mitigation Actions (NAMAs) as a new instrument in international cooperation on climate change. However since 2007, little guidance has been provided from the international climate negotiations regarding NAMA s; which leaves the term open for interpretation. NAMAs [will support] by developing country Parties in the context of sustainable development, supported and enabled by technology, financing and capacity building, in a measurable, reportable and verifiable manner. Bali Action Plan Three years later neither host countries nor financing countries know specifically how to deal with NAMAs and their status. Some important issues still need to be resolved before NAMAs can prove their full benefits. 4

5 Scaling up Climate Finance COP 17 South Africa Kyoto Protocol Fast start aid US$ 30 billion Long term Rising to US$ 100 billion/year by

6 Scaling up Climate Finance COP 17 South Africa Kyoto Protocol Long term Rising to US$ 100 billion/year by 2020 it is challenging but feasible (AGF report, 2010) New public Financial Instruments Development banks Carbon markets Private investments 6

7 Institutional Architecture National Needs Operating Body Funding Sources UN Mandated Funds National Development Plans Adaptation: - NAPAs Mitigation - NAMAs Tech Transfer - TNAs Climate Registry Adaptation Mitigation Tech Transfer Private Sector Flows & Carbon markets Bi- & Multilateral Financing Public Funds Outputs (Adopted from Reed et al. 2009) 7

8 Nationally Appropriate Mitigation Actions (NAMAs) NAMAs Policies and actions countries undertake as part of a commitment to reduce greenhouse gas emissions Funding 1.Financed domestically or 2.Internationally funded/supported or 3.Carbon offset credits/carbon market Eligibility Criteria for which NAMA can receive international funding have not been defined 8

9 NAMAs barriers and drivers Depending on type of NAMA e.g. NAMA Bonds NAMAs e.g. NAMA credits 9

10 Additionality and MRV requirements Additionality The additionality of an action plays an important role in present discussions about the eligibility of national actions for international funding. It can be extremely difficult to predict what mitigation actions would not be implemented without external support - All cost-efficient measures where benefits exceed the costs are no-regret and may not require financial support. However, funding may still be necessary to remove barriers. Additionality to play an important role in funding negotiations 10

11 Additionality and MRV requirements Additionality Many NAMAs are likely to pursue objectives other than GHG emissions mitigation, e.g. reduction of air pollution, technology promotion and energy savings. - All measures that focus on other goals, having a greenhouse gas emission reduction as a cobenefit, may not require financial support. However, funding could be used to overcome barriers. All measures beyond no-regret or cobenefit are supported If actions have not been taken before by other countries under similar circumstances, they are supported. 11

12 NAMA specific MRV requirements Monitoring Crediting could work only if the emission reductions can be measured Need to be able to establish a clear causality between the action and the emission reductions to qualify for NAMA crediting Causality difficult to determine for mitigation actions that - affect a large number of actors, - where impacts may be indirect or are delayed, - where feedback or effects from other sources can be important. Monitoring requires a measurable baseline, but data availability in host countries could be an issue Balance between accuracy and usability of measurement is a must 12

13 NAMA specific MRV requirements Monitoring In the absence of effective means to measure long term emission reductions from enabling activities, it may be sufficient to have an MRV that ensures - A certain magnitude of GHG emission reductions is achieved - The developing country uses the financing for the stated purpose - The proposed actions are actually undertaken - The implementation is done effectively For certain NAMAs, the monitoring will therefore be done indirectly and the focus of MRV could lie on the activities and outcomes. - Possible indicators would be; build units, number of vehicles, funds granted, investment triggered or feasibility studies completed. 13

14 NAMA specific MRV requirements Reporting Several levels of clarification are still required to make up a uniform reporting standard that - Makes verification results widely understood and accepted - Has transparency and standardisation which allow comparison between reports and verification A definition is also required to set - Potential linkage with national communications (e.g., possibility to make it as an integral part of less frequent NCs), more frequent NAMA-specific reporting, or both etc. - The level of reporting: country-level, selective, projectbased Expected to come from the UNFCCC 14

15 NAMA specific MRV requirements Verification For NAMA credits independent verification of emission reductions is necessary - The Copenhagen Accord calls for domestic verification of unilateral NAMA s and international verification of supported NAMA s Experience from CDM should be noted, e.g. avoiding unstable regulations, unnecessarily complex systems and double-auditing. - NAMAs will require many more auditors due to the broader coverage of policy-based mitigation actions - Host-country specific experience will be important Capacity building will require resources and preparatory time Common international standard for verification of NAMAs will be essential 15

16 Enhancing local readiness for implementation of MRV Certain local activities can be started with no-regret - Creation of a national registry for recording national (and sectoral) emission reduction goals, or targets, and actual emission reductions - Ensuring strong national legal and financial governance arrangements and institutions - Building Institutional Capacity - Identifying emission reduction opportunities that - Emerge from a participatory process within a country - Fit into national development and climate strategies - Leverage private investment - Has sustainable development benefits NAMA Examples - Low interest loans for EE projects - Analysis of Mitigation options - Implementation of reforestation projects - Subsidies for feed-in tariffs 16

17 DNV Creating trust & confidence MRV (1) Acts as an advisor in the development of plans and strategies (2) As an independent third party to validate plans and strategies or (3) Verifies results Risk management Managing technology transfer risks through capacity building, technology qualification and assessments. 17

18 Safeguarding life, property and the environment Your best choice for responsiveness, regional expertise, technical quality and flexibility. 18