Background Report for. Institutional Arrangements for MRV in Indonesia

Transcription

1 Background Report for Institutional Arrangements for MRV in Indonesia March 2014

2 Background Report for Institutional Arrangements for MRV in Indonesia 2

3 Preface Since the announcement of Indonesia s GHG emission reduction target in 2009, the development on policy framework for mitigation actions and national GHG inventory in Indonesia has been very rapid. Sector Ministries have developed national action plan to reduce GHG emission from each sector, as outlined in RANGRK under Presidential Regulation no. 61 year 2011, while during 2012, the provinces have also developed provincial action plan to reduce GHG emission, legalised under Governor Decree of respective province. In addition to this, the sectors, provinces and some cities are also developing Business as Usual (BAU) baseline, and some have also reported the GHG emission reduction achieved from implementation of mitigation action to date. This rapid development shows an urgency for a Measurement, Reporting and Verification (MRV) system. MRV is an important part in mitigation actions to ensure transparency of mitigation actions. However, MRV should not apply only to mitigation actions - the concept of MRV can be considered as an attribute of the activities and processes undertaken by a country to estimate and monitor as well as quality control GHG emissions and the financial, technological and capacity-based support received from other countries. A well-adjusted MRV system should also contribute the enhancing the effective monitoring of policies and programmes in general. MRV has been mandated under Presidential Regulation no. 71 year 2011 on National Green House Gas (GHG) inventory system. The Presidential Regulation specifically mandates verification of the process and the result of GHG inventory, including the achievement of emission reductions from mitigation actions. A Ministerial Regulation on MRV of mitigation actions has been developed to set arrangements for such verification. With this, the Ministry of Environment is pleased with the finalisation of this report, as a first step towards establishing an MRV system in Indonesia. This report aims at defining the procedure for MRV, the scope of MRV, and sets out the different rigidness level for different types of mitigation actions. The report elaborates further elements of institutional arrangement that has been set under the Ministerial Regulation, in order to operationalise the Ministerial Regulation. The development of this report follows the results of consultations/meetings on MRV with line ministries since 2012 and takes up the recommendations of previous studies on MRV including gap analysis for MRV and Assessment of Capacities in Managing Data Relevant for GHG Inventories and Monitoring Of GHG Mitigation Actions in The Energy, IPPU and Waste Sectors at the National Level. The Ministry of Environment looks forward to take up the recommendations from this report, and to engaging closer cooperation with the key stakeholders on MRV. Ir. Arief Yuwono, M.A. Deputy Minister for Environmental Degradation Control and Climate Change 3

4 Contents List of Tables and Figures List of Abbreviations 1. Purpose and Context of this Document Background: The International Context and MRV Requirements Common best practice of MRV as components of mitigation a`ivities More details on verification processes according to common best practices More details on recording mitigation actions Components of MRV in UNFCCC negotiations UNFCCC negotiations sessions and MRV Comparing MRV for NAMAs against MRV for REDD Best practices on GHG inventory management Best practices on monitoring financial flows International perspective on MRV of mitigation actions Key recommendations on meeting international requirements for MRV Current International Context in Indonesia Overview of the current institutions in Indonesia involved in GHG Inventory, national communications and BUR First and Second National Communications (INC and SNC) Third national communications and BUR MoE and the SIGN Centre Overview of the current institutions in Indonesia involved in GHG Inventory and/or mitigations actions Monitoring, Evaluation and Reporting (MER) mechanism of RAN/D-GRK mitigation activities MoE regulation on implementation of MRV of national climate change mitigation actions Institutions involved in REDD Gaps in the current regulations for mitigation actions Recommended institutional design for the national GHG inventory process The ongoing BUR preparations Institutional design for the national GHG inventory (SIGN Centre) Institutional design for baseline setting at the national level Capacity development requirements for the national GHG inventory Recommended institutional design of MRV for Mitigation Actions Overview Identification and approval of mitigation actions Registration of mitigation actions Monitoring and reporting of mitigation actions Monitoring and reporting of emissions Monitoring and reporting of development impact and international financial support The verification of mitigation actions Conclusion: Step-by-step breakdown of the MRV process for the different kind of mitigation actions

5 6. Conclusions on institutional arrangements for MRV in Indonesia Key conclusions MRV of national GHG Inventory MRV of national mitigation actions Institutional setup for MRV of GHG emissions within MoE To do list for MoE

6 List of Tables Table 1: Typical components of MRV Table 2: Comparing MRV for NAMAs against REDD Table 3: Multi-level step-wise approach to developing MRV for NAMAs Table 4: Institutions involved in GHG inventory Table 5: Institutions involved in mitigation action Table 6: Institution responsible for the development of National GHG Inventory Table 7: Existing and additional roles for MRV institutions Table 8: Information requirements for the BURs, supported NAMAs and for the NRS List of Figures Figure 1: Components of a verification system Figure 2: Possible components of a registry for mitigation actions and GHG emissions Figure 3: Key elements of MRV Figure 4: Requirements that MRV needs to meet for different kinds of mitigation actions Figure 5: The GHG inventory cycle in four phases Figure 6: Structure of institutional arrangement for the development of the SNC Figure 7: Coordination and Work Relations among working groups in the development of NATCOM / BUR Figure 8: Institutional Mechanism for National GHG Inventory System (SIGN) Figure 9: Coordination and Work Relations among working groups in the development of NATCOM / BUR Figure 10: Overview of types of national kinds of mitigation actions and related guidelines and registries Figure 11: The steps of the MRV cycle and respective sub-chapters Figure 12: Role of the NRS as a central data repository to collect information on mitigation actions Figure 13: Overview of types of verifications Figure 14: Working relationship between REDD+ Agency, SC CCNCT and NC MRV... Figure 15: MoE s suggested new unit for the MRV of greenhouse gas emissions unless stated otherwise, all following figures and tables have been compiled by the authors 6

7 List of Abbreviations AFOLU Agriculture, Forestry and Other Land Use APEKSI Association of the Indonesian Municipalities / Asosiasi Pemerintah Kota Seluruh Indonesia APKASI Association of the Indonesian Regency Administration / Asosiasi Pemerintah Kabupaten Seluruh Indonesia BAPPENAS State Ministry of National Development Planning BPS Central Agency on Statistics / Badan Pusat Statistik BUR Biennial Update Report CCAP Center for Clean Air Policy CCNCT Climate Change National Coordinating Team CDM Clean Development Mechanism CER Certified Emission Reduction COP Conference of Parties DNPI National Council on Climate Change, Dewan Nasional Perubahan Iklim EBTKE Directorate General for Renewable Energy and Energy Conservation (MEMR) ETS Emissions Trading System FORDA Forestry Research and Development Agency GCF Green Climate Fund GHG Greenhouse Gas GIZ German Development Cooperation / Gesellschaft fuer Internationale Zusammenarbeit GmbH IAARD Indonesian Agency for Agriculture Research and Development ICA International Consultation and Analysis INC Initial National Communication IPCC Intergovernmental Panel on Climate Change IPP Independent Power Producer IPPU Industrial Processes and Product Use JI Joint Implementation K/L Ministry/Institution KOMNAS MPB National Committee on the CDM MADD Mitigation Action Design Documentation MEMR Ministry of Energy and Mineral Resources / Kementerian Energi dan Sumber Daya Mineral MER Monitoring, Evaluation and Reporting MoA Ministry of Agriculture / Kementerian Pertanian MoE Ministry of Environment / Kementerian Lingkungan Hidup MoFor Ministry of Forestry / Kementerian Kehutanan MoI Ministry of Industry / Kementerian Perindustrian MoT Ministry of Transport / Kementerian Perhubungan MRV Measurement, Reporting and Verification 7

8 MSW Municipal Solid Waste NAMA Nationally Appropriate Mitigation Action NATCOM National Communication NFMS National Forest Monitoring System NGO Non-Governmental Organization NIR National Inventory Report NPD National Project Director NRS National Registry System NSC National Steering Committee PAKLIM Policy Advice for Environment and Climate Change PDD Project Design Document Permen Ministerial Regulation Perpres Presidential Regulation PLN National Electricity Utility, Perusahaan Listrik Negara PMU Project Management Unit PTS Project Technical Supervisor Pusdatin Data Centre QA Quality Assurance QC Quality Control RAD-GRK Regional Action Plan for GHG Emission Reduction RAN-GRK National Action Plan for GHG Emission Reduction REDD+ Reducing Emissions from Deforestation and Forest Degradation, conservation of forests, carbon stock, sustainable management of forest, and enhancement of forest carbon stocks Satgas Task Force SBSTA Subsidiary Body for Scientific and Technological Advance SC Steering Committee SIGN Centre Centre for National GHG Inventory System SNC Second National Communication SNI Standard National Indonesia SWG Sectoral Working Group TACCC Transparency, Accuracy, Comparability, Completeness, Consistency TBD To be determined TNC Third National Communication TT Technology Transfer UKP4 Presidential Working Unit for Supervision and Management of Development UNDP United Nations Development Programme UNFCCC United Nations Framework Convention on Climate Change V&A Vulnerability and Adaptation VCS Verified Carbon Standard WG Working Group 8

9 1. Purpose and Context of this Document The purpose of this document is to describe an outline for a national Measurement, Reporting and Verification (MRV) framework for Indonesia in particular focusing on the role of the Ministry of Environment (MoE) and the MRV of emissions. The document is developed by an expert team put together by the GIZ1 programme Policy Advice for Environment and Climate Change (PAKLIM). The expert team consists of Rizaldi Boer (lead consultant), Retno Gumilang, Jan-Willem Martens, Till Neeff, Philipp Munzinger and Trita Katriana. 2 This report is the result of a longer advisory process for MoE in the design of the national MRV framework of Indonesia. The process aims to develop a concept for the reporting and verification of greenhouse gas (GHG) emissions and mitigation actions in Indonesia. Such a concept will define the roles, functions and procedures of the involved institutions to report and verify GHG emissions and mitigation actions. Thereby the concept shall be designed as a roadmap that describes how the Indonesian MRV system could be established and further developed over time. The tracking of Indonesia s mitigation targets (26% and 41%) will take place at the national level where the GHG inventory will be compared against the national baseline. The MRV of a national GHG Inventory therefore serves the purpose to inform policy makers on the overall progress of their mitigation efforts. The results of mitigation actions cannot easily be determined from such tracking at the national level because changes in GHG at the national level cannot only be attributed to mitigation actions but also to other circumstances (e.g., changing energy prices, changing economic conditions, natural disasters, natural reduction of energy consumption, etc.). The MRV of mitigation actions therefore serves the purpose of informing policy makers on the progress of individual mitigation actions compared to the targets of those mitigation actions. Although in its further elaboration the scope will be more inclusive, this document focuses on the reporting and verification of the national GHG inventory and mitigation actions, but also briefly touches upon the MRV of development implications of mitigation actions and the MRV of international financial support. 1 German Development Cooperation Deutsche Gesellschaft fuer Internationale Zusammenarbeit GmbH (GIZ) 2 The team is thankful for the the technical support by Natalie Harms 9

10 2. Background: The International Context and MRV Requirements Mitigation efforts need reliable MRV. Mitigation policy needs to be guided by transparent, consistent and accurate information on present GHG emissions and their reference levels. Moreover, results-based mitigation funding can be tied to the reduction of emissions as a key success measure for mitigation. This is why the UNFCCC 3 puts much emphasis on the establishment of GHG inventory systems and on MRV of emissions. The components of measuring/monitoring, reporting and verifying emissions and emission reductions were already made operational under the Kyoto protocol on a national level via Annex I GHG Inventories and National Systems of GHG Inventories for Annex I Parties; and National Communications for Non-Annex I Parties to the Convention. At the level of individual mitigation actions the Kyoto process has resulted in detailed MRV procedures via the Clean Development Mechanism (CDM) and Joint Implementation (JI); in voluntary carbon reduction schemes such as the Verified Carbon Standard (VCS) or the Gold Standard4; and in Annex I compliance policies such as the EU Emissions Trading System (ETS) and the New Zealand ETS. Section 2.1 describes a general best practice process of the MRV components of these systems. The emphasis on MRV as a concept has arisen at the COP 13 in Bali (Conference of the Parties) in the Bali Action Plan (Decision 1/CP.13) to relate to measurable, reportable and verifiable nationally appropriate mitigation commitments or actions. This concept was further elaborated during the subsequent COPs In particular, there were important decisions taken on MRV for Nationally Appropriate Mitigation Actions (NAMAs) at COP 16 in Cancun and for Reducing Emissions from Deforestation and Degradation (REDD+) at COP 19 in Warsaw. 2.1 Common best practice of MRV and its components The different scale of national and sub-national (or programme-based) GHG inventories on the one hand and GHG inventories for project-based mitigation actions on the other hand has implications regarding the best practices for MRV. Key guidance for preparing GHG inventories at a national or sub-national level comes from the Intergovernmental Panel on Climate Change (IPCC) directly but can also be found in the guidance documents of the EU ETS or the New Zealand ETS. For project-based mitigation actions, there is also some dedicated IPCC guidance but more importantly JI and CDM have generated much experience. MRV of mitigation actions for achieving emission reduction targets will involve several components (Table 1): Scope of mitigation policy. A first requirement is to identify which type of projects, industries or sectors will be subject to a mitigation policy. Baseline and monitoring standards. Each mitigation policy needs at the minimum to have a set of monitoring standards that will guide participating activities on how to monitor their emissions to ensure minimum quality standards are applied and uniform reporting of emissions across different facilities. 3 United Nations Framework Convention on Climate Change (UNFCCC) 4 or 10

11 Approval of individual activities. Individual facilities need to submit technical information to demonstrate how they qualify, including a monitoring plan that summarizes how they would monitor their GHG emissions. Real-time monitoring of emissions. Once actual implementation of mitigation action is taking place GHG emissions are established by actual monitoring of emissions or the underlying activity data that produce emissions (e.g. burning of fuels to produce electricity). Reporting. Reporting of emissions takes place through monitoring reports. Verification. Independent verification of monitoring reports is important for ensuring the quality of the reported emissions and the credibility of the data. Accounting and registry. Authorities that receive the verified emissions data require a central electronic database where they log all key information requirements on the covered mitigation actions. In the case of emission trading / offsetting the database also holds account of the allowances hold against the emissions or credits received in return of the emission reductions. Such a database is commonly referred to as a Registry. Table 1: Typical components of MRV CDM under Kyoto Protocol (project-based) EU ETS (programme based) Scope Baseline and monitoring standards Identification, approval and registration of activities CDM is voluntary and based on an opt-in approach where all emission reduction activities outside the Agriculture, Forestry and Other Land Use (AFOLU) sector can participate provided a baseline and monitoring methodology is available 5. In the CDM the monitoring standards that prescribe emissions sources included and the parameters, the methods and the frequency of measurements are included in the CDM baseline and monitoring methodology. These also include baseline standards, i.e. procedures that determine how baseline emissions scenarios and additionality are established. Proposed CDM project activities seeking to get recognition for their emission reductions need to pass through a lengthy application process, the CDM registration. The EU ETS directive provides an explicit definition of the type of installations included based on the nature of their industry or the size of their facility. The monitoring standards for installations covered by the EU ETS are provided in monitoring and reporting regulation. Further guidance and templates are provided to guide facility owners in preparing their monitoring plans Participation in the EU ETS is mandatory for the installations covered by the EU ETS. Industrial installations need to apply for a license to emit GHG 5 Nuclear energy is the only category that is explicitly excluded 11

12 Real-time monitoring of emissions Baseline scenario and monitoring plan are summarized in the Project Design Document (PDD). emissions. They are required to have an approved monitoring plan that forms part of the approved permit. Once actual implementation of mitigation action activities is taking place GHG emissions are established by actual monitoring of emissions or the underlying activity data that produce emissions (e.g. burning of fuels to produce electricity). Reporting of emissions Verification Registry accounting The monitoring report of a CDM project contains the data measured during the operation of the project and the calculation of emissions emitted and emissions reduced is done in a monitoring report. The period between each monitoring report is flexible. The monitoring report and its data sources are independently verified by a verifier (called Designated Operating Entity) accredited by the UNFCCC. Verified emission reductions of a CDM project activity are transformed in Certified Emission Reductions (CERs) that are issued via the CDM registry. The CDM registry is the standardized electronic database that contains common data elements relevant to the issuance, holding, transfer and acquisition of CERs. Installations are required to annual prepare a monitoring report that contains the data measured during the operation of the project and the calculation of emissions emitted. The monitoring report and its data sources are independently verified by a verifier accredited by the EU. The EU ETS accounts for its verified emissions data via the EU Registry. The EU registry is an online database that holds accounts for installations included in the EU ETS. The registry records: Allocation of free allowances to installations; Accounts of companies or physical persons holding those allowances; Transfers of allowances ("transactions") performed by the account holders; Annual verified CO2 emissions from installations; Annual reconciliation of allowances and verified emissions. 2.2 More details on verification processes according to common best practices Based on an analysis of the MRV process of the EU ETS and the CDM, five institutions involved in the verification process have been identified (Figure 1). The first is the institution 12

13 that supervises the implementation of all processes namely registry, accreditation and verification. The second institution conducts registry of mitigation action activities. The third institution accredits the verification implementer. The fourth institution implements verification and the fifth one implements mitigation action activities. The activity implementer is responsible for measuring, monitoring and reporting emission reduction results to the institution that will issue certification for mitigation actions that are measurably correct and has actual emission reductions at a particular value. GHG reductions are certified after an independent institution conducts checking and verifying that the project implementer has carried out emission reduction measurement according to the set standard method. Figure 1: Components of a verification system Currently, particularly well-developed verification systems include those for mitigation actions under the EU ETS, JI, and CDM and for the Voluntary Carbon Market. For mitigation actions such as NAMAs, REDD+ there are not yet detailed experiences available on how to run and set up verification systems. However, experiences in carrying out verification of under the CDM could be used as reference. 2.3 More details on recording mitigation actions A set of registries have already been set up that record activities that generate emissions, mitigation projects and related carbon credits. In particular, there has been collected experiences in the context of the CDM, the voluntary carbon markets, as well as in the context of the regulatory GHG mitigation schemes, e.g., under the EU-ETS and under the 13

14 Kyoto Protocol directly. A set of typical components of such lists of GHG emitting activities and projects is contained in Figure 2. Figure 2: Possible components of a registry for mitigation actions and GHG emissions Activity Activity plan Boundary Cost profile Goals and baseline (according to indicators) Current progress (according to indicators) Methodology Progress indicators (GHG and development) Procedure for baseline setting Data management, quality assurance and quality control (QA & QC) Documents Activity description Methodology Approval report Monitoring reports Verification reports Transactions Accounts for emission units Transactions between accounts 2.4 Components of MRV in UNFCCC negotiations The below detailed overview of UNFCCC negotiation and their most important results for MRV leads to the conclusion that climate change institutions at the national level should at least have the following key elements needed (Figure 3): Calculation of GHG emission and their reference levels at a national level; Tracking of emission reductions in mitigation actions for inclusion in a registry system and assurance of results through a national verification system; Tracking of support required and received for inclusion in the registry system and assurance of results through a national verification system; Inclusion of all results in international reporting, such as the National Communications, international registries, information hubs as well as associated review processes. 14

15 Mitigation actions National GHG inventory Tracking of support International reporting, registries and reviews Figure 3: Key elements of MRV 2.5 UNFCCC negotiations sessions and MRV The detailed overview of UNFCCC negotiations with a view on MRV starts out with the Bali Action Plan. The signatory countries to the UNFCCC first introduced the concept of MRV in 2007 at the COP 13 in Bali in the Bali Action Plan (Decision 1/CP.13) to relate to measurable, reportable and verifiable nationally appropriate mitigation commitments or actions. The concept of MRV was also put forward in 2009 at COP 15 in Copenhagen where in the Copenhagen Accord (Decision 2/CP.15) countries agreed that mitigation actions taken by Non-Annex I Parties will be subject to their domestic MRV and reported through their national communications every two years. Also, the nationally appropriate mitigation actions (NAMAs) seeking international support will be subject to international MRV. For REDD+, COP 15 also makes reference (Decision 4/CP.15) to national forest monitoring systems (NFMS) at a national level and possibly an embedded sub-national level. In 2010, at COP 16 in Mexico, the Cancun Agreements (Decision 1/CP.16) reconfirmed decisions from Copenhagen. An international registry will be set up to facilitate finding financial, technology and capacity-building support for NAMAs. At COP 16, developing countries also agreed to enhance reporting in National Communications, National Communications and their BURs shall be submitted every four and two years, respectively. They include a National Inventory Report (NIR) and information on mitigation actions, needs and support received. On the mitigation actions, there will be a description, analysis of the impacts and associated methodologies and assumptions, progress in implementation and information on domestic MRV, and support received. Furthermore, it was decided that the BUR report will be subjected to a process of International Consultation and Analysis (ICA). The ICA will be conducted by technical experts, aim to increase transparency and result in a summary report. The ICA will assess the NIR and the mitigation actions. On REDD+, the Cancun Agreements clarify that the concept of MRV also applies. Moreover, they state in Appendix II that MRV for REDD+ will be consistent with MRV of NAMAs. 15

16 Moreover, the text reaffirms earlier decisions on NFMS and on MRV and setting of reference levels at a national level with provisions for sub-national MRV as an interim or adding up the national level. Guidelines for the preparation of BURs In 2011, at the COP 17 (Decision 2/CP.17) in Durban, the Parties agreed on guidelines for the preparation of BURs (Annex 3 to Decision 2/CP.17). The first BURs need to be submitted by December 2014 and every two years afterwards. It is to include a national GHG inventory from not earlier than 2010 along with a time series going back to earlier reporting in National Communications. It is also to include a table of mitigation actions with a specific set of information requirements: Name and description of mitigation actions, including information on nature of action, scope (namely sector and emission), quantitative goals and indicators of progress; Information on methodology and assumptions; Goals of actions and measures taken or considered to reach such actions; Information on the progress of implementation of mitigation actions and the underlying measures, and achieved results, such as estimation results (metric depending on the type of actions) and estimation of emission reduction; Information on international market mechanism; Lastly, it is to include aggregate information on: The description of domestic measurement, reporting and verification arrangement; Constraints and gaps, and related financial, technical and capacity-building needs; Financial resources, technology transfer, capacity-building and technical support received; Technology needs, which must be nationally determined, and on technology support received. Importantly, the BURs can contain a technical annex to provide further information as input for assessments of results-based financing. Information requirements for NAMAs At COP 17 more clarity emerged on the NAMA registry. Both domestic NAMAs and internationally supported NAMAs will be included. For internationally supported NAMAs, there is a specific list of information requirements for the registry revolving around a description, cost and time-frame estimates, and implementation indicators, including GHG reductions and co-benefits. Although not identical these information mostly overlap with information requirements on mitigation actions in the BUR. Information requirements are: A description of the mitigation action and the national implementing entity, including contact information; 16

17 The expected time frame for the implementation of the mitigation action; The estimated full cost of the preparation; The estimated full cost and/or incremental cost of the implementation of the mitigation action; The amount and type of support (financial, technology and capacity-building) required to prepare and/or implement the mitigation action; The estimated emission reductions; Other indicators of implementation; Other relevant information, including the co-benefits for local sustainable development. Guidelines for the ICA process Moreover, COP 17 also delivered guidelines for the ICA process (Annex 4 to Decision 2/CP.17) 6, which are to be revised until 2017 after experiences gathered with the first set of BURs. The ICA process will consist of the following two steps, a technical analysis by a team of international technical experts and a three month period of facilitative sharing of views between the Party and the technical team. As part of the technical analysis the team of international technical experts also considers information on mitigation actions. This includes: A description of such actions; An analysis of their impacts; The associated methodologies and their assumptions; The progress made in their implementation; Information on domestic measurement, reporting and verification; Support received. Beyond the earlier agreed technical analysis the ICA process will also include a facilitative sharing of views. The technical analysis results in a summary report that countries can comment on for three months before made final. The facilitative sharing of views will use the BUR and the summary report as input. It will be carried out through regular workshops with brief (1-3 hours) sessions for each country or group of countries. Reference levels for REDD+ On REDD+ COP 17 established a review process for forest reference emission levels and/or forest reference levels (Decision 12/CP.17). These can be submitted to the UNFCCC and are to be made available on a REDD web platform. Reference levels undergo a technical assessment. The process for reference levels is similar to the processes around the BUR but separate

18 REDD+ MRV decisions in Warsaw The COP 19 in Warsaw delivered a set of seven decisions on REDD+ including 5 methodological guidelines that are most concerned with MRV (including decisions on reference emission levels/reference levels, NFMS and MRV). The reporting and review procedures for REDD+ are linked to the BUR and the ICA. Results of REDD+ are to be reported in a technical annex to the BUR and they will undergo an ICA with an extended team of technical experts that jointly develop the ICA s summary report. The reference levels, in turn, will be submitted separately to UNFCCC and undergo a separate technical assessment by an assessment team that develops a final report. It is estimated that this process will take approximately 42 weeks. Beyond these decisions, an additional level of verification will be needed for triggering result-based payments under a future market based REDD+ financial mechanism. In addition, the verification of emission reductions under REDD+ will be conducted by a technical team of two LULUCF experts, with one from a developed and one from a developing country to balance interests and participation of participating countries. The information requirements for the BUR s technical annex are the following: An aggregate estimate of the reference level next to a description of its boundaries in terms of activities, territorial area and period in time; An aggregate estimate of REDD+ results next to a demonstration that its methodologies are consistent with those for the reference level and next to the necessary methodological information that allows for full reconstruction of results; The description of the NFMS and institutional roles for MRV; A description of how the methodologies conform to the IPCC guidelines and to the guidelines for NFMS. The decisions stipulate ample requirements for data consistency: between NAMAs and REDD+, between REDD+ and the national GHG inventory, between reference levels and REDD+ results, and with the IPCC guidelines. The text does not address the question whether this implicitly means that measurement of NAMAs also has to be consistent with the national GHG inventory. The key instrument for tracking REDD+ internationally be the REDD+ information hub. It will bring together for each country the following information: An aggregate emission estimate for the results of REDD+ and the team of technical expert s technical report on results; An aggregate estimate of the reference level and the assessment team s final report on the reference level; Summary information on the seven REDD+ safeguards on governance, social and environmental dimensions; The national REDD+ strategy; Information on the NFMS as per the BUR s technical annex. Emission reductions in tco 2 e per year, the quantity of results for which REDD+ payments were received as well as information on the entity paying for results. 18

19 2.6 Comparing MRV for NAMAs against MRV for REDD+ It quickly emerges from the detailed summary that there are significant developments around MRV of NAMAs and REDD+ at the UNFCCC. Collecting a comprehensive picture is made difficult by the fact that the premises for negotiating NAMAs and REDD+ are different although MRV is integral part of results-based mitigation for both. Some important differences include the following: The NAMA negotiations are concerned with mitigation actions and the REDD+ negotiations are concerned with a programme-based mechanism. REDD+ results will be reported as one aggregate number and its reference level. This is different from the thinking behind NAMAs, more geared towards showing a list of actions. Correspondingly, the NAMA registry is a matchmaking platform to list NAMA proposals and financial requirements. For REDD+ the information hub will contain information on work underway. NAMAs are grouped according to the occurrence and the kind of international support as domestic, international and credited NAMAs. Domestic and supported NAMAs would count towards GHG reduction targets of developing countries; only credited NAMAs generate offsets. REDD+ is broken down in phases according to its objective: first and second phase are largely capacity building and building the REDD+ architecture (NFMS, REL, MRV, SIS, etc.) and the third phase is results-based mitigation. Table 2: Comparing MRV for NAMAs against REDD+ Measurement Reporting Verification General The MRV of results-based mitigation for NAMAs and REDD+ must be consistent with each other. The IPCC guidelines are to be followed in the latest version adopted by the UNFCCC (currently for developing countries these are the revised 1996 guidelines). The key process for reporting on GHG emissions are the NATCOMs / BURs. Developing countries submit NATCOMs every four years and BURs every two years. The NATCOMs / BURs include a national GHG inventory together with information on mitigation actions and information on support. The NATCOMs / BURs will be subjected to the ICA process. The ICA includes a technical analysis and a facilitative sharing of views. It will address the national GHG inventory, mitigation actions and support. Initial guidelines are rudimentary and will soon be revised. NAMAs For NAMAs it is unclear at which scale MRV and in particular the measurement of GHG emissions and their reference levels will function (options may include project-based activities, sectoral or national-level activities or all of these). The UNFCCC will run an international NAMA registry for developing countries to report on their NAMAs and have them recognized. There are detailed information requirements for supported NAMAs, which are optional for domestic NAMAs. The role of REDD+ NAMAs will be subject to domestic verification. Supported NAMAs will also be subject to international verification. There are not yet guidelines available. Design of domestic verification is a matter of national competence. International verification is 19

20 mitigation actions in the NAMA registry is unclear. The information requirements are largely consistent between the NATCOMs / BURs and the NAMA registry for supported NAMAs. yet undefined; there is proposal to use ICA process as international verification, although this has not been adopted as a decision. REDD+ For REDD+ the MRV and in particular the measurement of GHG emissions and their reference levels will function at the national and subnational scale. The occurrence of project-based activities and the use of nested approaches or similar to integrate them is a matter of national implementation. Much of the reporting is carried out through the BUR and its technical annex. The key instrument for international registration is the REDD information hub. Many countries are already moving on setting up national REDD+ registries which are strictly a matter of national implementation. There are processes for the review of reference levels and results that are closely associated to the ICA of the NATCOM / BUR. There is also a reference to possible further verification requirements depending on the financial mechanism. 20

21 Figure 4 below further provides a break-down of mitigation actions in BUR, domestic and supported NAMAs and REDD+. Figure 4: Requirements that MRV needs to meet for different kinds of mitigation actions Mitigation actions in NATCOM / BUR Domestic NAMAs Supported NAMAs REDD+ Level Activity Activity Activity National (subnat'l as interim) Reporting BUR BUR + UNFCCC NAMA registry BUR + UNFCCC NAMA registry BUR's technical annex + RL submissions Review ICA ICA + domestic verification ICA + domestic verification + international verification ICA + technical assessment + technical analysis In Figure 4 (above), activity-level MRV is specified for BUR-mitigation actions, as well as for domestic and supported NAMAs. It is important to note that in terms of geography, an activity could cover a whole sector or the whole country. 2.7 Best practices on GHG inventory management The approach for the preparation of GHG inventories need to be performed according to the standards provided by the IPCC. The IPCC guidelines encapsulate the concept of a national GHG inventory system that is designed to continuously improve the quality of the inventory according to the so-called TACCC criteria (transparency, accuracy, comparability, completeness and consistency). GHG inventory systems have a set of typical components. Beyond the GHG estimations themselves, appropriate documentation and archiving of the data and methods used in calculating emission and removal estimates and an effective process for quality assurance and quality control of the data are also integral parts of inventories. The process of inventory compilation should be perceived of as a continuous inventory cycle and each iteration cycle as an opportunity for improvement of the inventory. This process must be guided by an inventory improvement plan, i.e. a structured and prioritized list of activities to further develop procedures for estimating emissions and removals. The elaboration of the inventory improvement plan should itself be informed by a key category 21

22 analysis as well as by an uncertainty analysis of emission estimation to prioritize options for improvement. A high-quality set of inventory estimation over time then provides some basis for the identification of emissions trends that may contribute to a mitigation analysis to underlie policy recommendations (Figure 5). Figure 5: The GHG inventory cycle in four phases 2.8 Best practices on monitoring financial flows Considering national circumstances, countries may vary in terms of transparency to report domestic climate finance. In order to attract climate finance from the GCF or bilateral sources, international regulations will be developed or directly negotiated with the supporting country. In general, it can be said that the better the transparency and accuracy of the use of domestic climate finance, the easier to attract international funds. Reporting and Verifying climate funds can be done through general budget reporting of the government or by external institutions. A strong link (via an MRV infrastructure) would need to be established between the Indonesian national and subnational climate mitigation action plans (RAN/D- GRK activities and others) and the use of the financing source, for transparency in tracking the means and results of the financial flows. This will also enable more effective prioritization of mitigation efforts in the future. 2.9 International perspective on MRV of mitigation actions As described above in the international requirement section on NAMA s in the international UNFCCC reporting context, NAMA s follow a flexible approach. Many observers, such as CCAP (2011, p.2) believe that the purpose of the NAMA concept is to offer an appropriate level of flexibility in the methods and metrics that are used, allowing Parties to decide whether to report on a single NAMA or a suite of NAMAs. In the same context it is mentioned that the MRV should be flexible and context driven. Emission reductions of NAMA s are characterized by high levels of uncertainty and instead of focusing on a high level of accuracy MRV right from the start the focus of reporting on 22

23 emission reduction should be capacity building and increasing awareness in host countries of the impact of their mitigation actions. The purpose of this capacity building is to create the ability in host countries to execute meaningful mitigation policies that are in tune with their long term sustainable development path and where MRV is considered a valuable asset to manage and control those mitigation policies (CCAP, 2011, p.2, p.11). This wider scope of NAMAs is one of the reasons is that the focus of MRV of NAMAs is wider than only GHG emissions or emission reductions and could also include mitigative capacity, co-benefits (environmental and development), co-costs (in case a negative impact is foreseen), climate finance, capacity building and technology transfer (Ecofys, 2013, p.5). When designing MRV systems for mitigation actions the following questions are relevant to consider (Ecofys, p.8): What are the objectives of the mitigation actions? Do we want to track non-ghg impacts of the mitigation action? What are suitable indicators for the set objectives and other impacts? Which data do we need for these indicators? Where can we find this data and how can we obtain it? Which data do we need to report to whom, how frequently and in which format? How can we ensure the validity of the reported data? In line with this capacity-building approach of developing NAMAs Ecofys (2013, p.9, 21, 22 and 28) propose a multi-level step-wise approach to developing MRV (Table 3). Table 3: Multi-level step-wise approach to developing MRV for NAMAs Tier Monitoring Mitigative capacity Reporting Verification 1 The first step means covering all relevant MRV activities, e.g. a national inventory and supported as well as unsupported mitigation actions and related flows of support, but without applying common stringent methodologies for all emissions actions and support. Qualitative assessment Qualitative indicators List of required reporting contents, but no format Reporting on paper or Internal validation based on plausibility checks 2 As a next step, aligning MRV activities as well as coordinating the relevant institutions to a certain extent. Semiquantitative assessment Quantitative indicators without quantification of emission Provision of a common reporting format Reporting in electronic format Validation by another domestic entity (administration, institution) Plausibility checks, checks on background 23

24 reductions information 3 The highest level is a means a high level of coordination between the competent authority and alignment between MRV activities wherever potential for synergies exist based on clear rules, such as applying common methodologies and generating comparable data. Further transparency could also be achieved through a national registry on mitigation action data to show the results of its mitigation actions. The most appropriate tier depends on local circumstances. Quantitative assessment Quantitative indicators with quantification of GHG emissions reductions Obligatory common reporting format Sophisticated reporting tool with automated cross-checks Data security ensured Validation by an independent third party Plausibility checks, checks on background information, assessment of internal processes 2.10 Key recommendations on meeting international requirements for MRV According to the international context, there are several key actions to be taken by the governments of developing countries to set up systems that can deliver on MRV. On the one hand, countries need to set up a process for on-going collection of a national GHG inventory and its reference levels. On the other hand, countries need to set up a set of processes to implement MRV for mitigation actions. Following the MRV cycle for mitigation actions and the international requirements for NAMAs and REDD+ the following components are considered most relevant: Approval process that sets out the MRV parameters: Set up a national process for NAMA identification and approval that clearly identifies the baseline (if applicable) and monitoring standards that will guide participants during the implementation of the activity. Monitoring and reporting guidelines: Following the standards as set out in the approval process participants should monitor and report on the actual emissions of the actions. Monitoring and reporting guidelines could assist in guiding the participants on the frequency of the monitoring and reporting, the use of default values, use of sampling in case of small activities, dealing with changes in the scope of the activity, etc. Registration of mitigation actions: Set up a national list of mitigation actions to include activities from all sectors. This list needs to collect all information requirements for the BUR and the international NAMA registry regarding properties of activities and tracking of support. REDD+ registry: Although not internationally required, it is practical to set up a national registry that would record individual REDD+ mitigation actions in a spatially explicit database able to track results in full consistency with the methodologies applied in the national GHG inventory. 24

25 Domestic verification guidelines for NAMAs and REDD+: Verification guidelines are required to underlie the domestic verification process for NAMAs as well as a national verification / quality checking for REDD+. Although for REDD+ such a process is not required, it is probably useful to quality check measurements reported to the REDD+ registry against the monitoring and reporting guidelines. Domestic verification process for NAMAs: Indonesia is setting up a domestic verification process to cover those mitigation actions that are to be reported as NAMAs internationally. For supported NAMAs this domestic verification should operate in conjunction with the international verification process that addresses the same mitigation actions. Monitoring and reporting of development impacts and financial support: For those NAMAs which have identified development impacts as relevant, a process should be set up to track the development impact of the NAMAs and, where relevant, the financial support received. 25

26 3. Current International Context in Indonesia 3.1 Overview of the current institutions in Indonesia involved in GHG Inventory, national communications and BUR The Government of Indonesia has issued a Presidential Regulation (Perpres) No. 61/2011 on the National Action Plan for Green House Gas Emission Reduction, and a Perpres No. 71/2011 on Implementation of National Green House Gas Inventory. Perpres No. 71/2011 regulates the implementation of national greenhouse gas inventory which intends to provide: Regular information on the level, status and trend of change of emission and removal of GHG including carbon stock at the national, provincial and district/city levels. Information on the achievement of GHG emission reduction from national climate change mitigation actions. Perpres No. 71/2011 orders relevant line ministries, provincial governors, head of regency (bupati) and city mayors to prepare their respective GHG inventories. According to the Perpres, Ministry of Environment is to prepare guidelines for the preparation, and implementation of GHG inventory. The Ministry of Environment is to function as coordinator in the preparation of National GHG Inventory and National Communications on Climate Change. Private businesses (industry, commerce) that are regarded as large GHG emitters are required to report their GHG inventory-related data to the corresponding governor/city mayor. In relation to verification, in Article 6 of Perpres No. 71/2011 it is stated that Provision on the implementation of verification of GHG inventory results and GHG emission reduction achievements from the national mitigation actions is established by the Minister of Environment. In summary, the institutions involved in GHG Inventory are as follow: Table 4: Institutions involved in GHG inventory Institution Role/Task/Function Ministry of Environment Coordinator of National GHG Inventory Relevant Line Ministries Provincial Governor Head of regency/city mayor Large private businesses(*) Prepare guideline for the development and implementation of GHG inventory Monitoring and evaluation on the process and results of GHG inventory Coordinator in the preparation of National Communication on Climate Change Verification of GHG inventory and achievement of emission reduction resulted from national climate change mitigation actions Prepare GHG inventory within each ministry Develop inventory methodology and emission factors for activities in the ministry Prepare GHG inventory in each province Prepare GHG inventory in each regency/city Report GHG inventory-related data to governor/city mayor 26

27 (*) The type/size of businesses that are regarded as large GHG emitter is to be determined by a Permen of the MoE First and Second National Communications (INC and SNC) Involvement of sectors in the development of the first and second NATCOMs was limited. In the INC, the analysis and the development of NATCOM documents were conducted by the experts hired from Universities. The sectors involved only in the consultation processes during the development of the documents. In the SNC, the production of the documents was still by expert team as consultant but sectors were more actively engage. Four Working Groups were established through a Permen No. 06/2008 of the Deputy Minister of Environment for Nature Conservation Enhancement and Environmental Destruction Control of MoE. Two of the working groups were in charge for the development of GHG inventory and mitigation analysis, and the other two groups were in charge for vulnerability and adaptation and national circumstances/other information. The member of the working groups consisted of representatives from different line ministries. The Working Group provided direction to the technical team (experts) and also provided support in collecting data and information required for the development of the SNC (Figure 6). The Working Groups held regular meetings under the coordination of the Deputy of Nature Conservation Enhancement and Environmental Destruction Control of MoE to review the progress and to provide inputs to the Technical Team. The working period of the Working Group ended after the submission of the SNC to UNFCCC. 27

28 Figure 6: Structure of institutional arrangement for the development of the SNC (MoE, 2010) Third national communications and BUR Reporting obligation of inventory results and progress of mitigation action implementation and impacts on emission reduction as well as support received must be met in December 2014 at the latest and then the next two years which can be integrated into the Third National Communications for Climate Change (TNC). With the increase of frequency of the reporting obligation, the process of the development of NATCOM / BUR should be institutionalized. Since the institutions have not been set up yet, the development of NATCOM / BUR will be carried out by two Working Groups namely BUR Working Group and NATCOM Working Group. These two Working Groups will work under the coordination of the National Director for NATCOM (NPD) namely Assistant Deputy Minister for Environmental Degradation Control and Climate Change with direction from NATCOM Steering Committee (Figure 6). The NPD will be supported by Unit Management which will coordinate the working groups and communicate regularly with other related working groups. 28

29 Figure 7: Coordination and Work Relations among working groups in the development of NATCOM / BUR (MOE and UNDP, 2013) MoE and the SIGN Centre The Ministry of Environment in line with the mandate stipulated in Perpres No. 71/2011 will also establish Centre for National GHG Inventory System (called as SIGN Centre) to coordinate the development of National GHG inventory. The SIGN Centre will be directed by the Steering Committee (SC) from GHG Inventory and will be supported by the Sectoral Working Groups of GHG Inventory (SWG) which will be officially established by the Permen of MoE (Figure 8). The roles of SC and SWGs are very instrumental in the capacity building. At the ministerial and provincial government levels working groups have been set up to develop GHG inventory at sectoral level. Experts will be hired, when necessary, to support the SC and SWGs (Figure 8). 29

30 Figure 8: Institutional Mechanism for National GHG Inventory System (SIGN) 3.2 Overview of the current institutions in Indonesia involved in the national GHG inventory and MRV of mitigations actions Perpres No. 61/2011 regulates the work plan for the implementation of various activities which directly and indirectly reduce greenhouse gas emission according to the national and local development targets. The regulation has an attachment that lists the national action plans with emission reduction targets (RAN-GRK). Perpres No. 61/2011 orders provincial governors to prepare regional GHG mitigation action plan (RAD-GRK) and submit the plan to BAPPENAS. The RAN-GRK has provided guidelines for line ministries in the planning, implementation and monitoring of mitigation actions and for provincial government in the development of regional GHG mitigation action plans (RAD-GRK). BAPPENAS prepared guidelines for the development of regional GHG mitigation action plans (RAD-GRK). The Ministry of Domestic Affairs, together with BAPPENAS and Ministry of Environment facilitate the development of Regional GHG Mitigation Action Plan (RAD-GRK). According to Perpres No. 61/2011, the RAN-GRK also serves as reference for general public and private sectors in the planning and implementation of GHG emission reduction activities. The implementation and monitoring of the National GHG mitigation action plan (RAN-GRK) is coordinated by the Coordinating Ministry of Economic Affairs. 30

31 Table 5: Institutions involved in mitigation action Institution BAPPENAS Ministry of Environment Coordinating Ministry of Economic Affairs Ministry of Domestic Affairs Relevant Line Ministries Provincial Governor Community, private businesses Role/Task/Function Prepare guideline for the development RAD-GRK Coordinator in the review/assessment of RAN-GRK Collect reports on the implementation of RAN-GRK (submitted by line-ministries) Collect RAD-GRK (submitted by provinces) Facilitate the development of RAD-GRK Prepare guideline for MRV Verification of emission reductions from mitigation actions including RAN/D-GRK Coordinator of the implementation and monitoring of RAN-GRK Report the implementation of RAN-GRK Facilitate the development of RAD-GRK Development of RAN-GRK Implementation of RAN-GRK Preparation and implementation of mitigation actions in each province (RAD-GRK) Voluntary GHG mitigation actions Note that the sub-national institutions involved in GHG Inventory include province and regency/city, while the sub-national institutions responsible for the development regional GHG mitigation action plans (RAD-GRK) is at provincial level. Concerning NAMAs and MRV, as of now the institution(s) that is (are) assigned to deal with (coordinate, manage, execute) is not yet determined. The Perpres No. 61/2011 mandates BAPPENAS to develop a concept for nationally appropriate mitigation actions. Following this BAPPENAS developed a first NAMA framework concept in Another concept that was published in November 2013 further details national NAMA criteria and approval procedures. The verification of achievement of emission reduction resulted from national climate change mitigation activities is addressed in Perpres No. 71/2011 which states that the provisions regarding the verification is to be regulated by a Permen Monitoring, Evaluation and Reporting (MER) mechanism of RAN/D-GRK mitigation actions According to BAPPENAS (2011, p.1) the National Action Plan for Green House Gas Reduction (RAN-GRK) is the follow up of the commitment of the Government of Indonesia to reduce GHG emission by 26% in 2020 from the BAU level with its own efforts and up to 41% reduction with international support. The RAN-GRK was legalised under Perpres No. 61/2011, and consists of planned mitigation actions in five priority sectors (Agriculture, Forestry and Peat land, Energy and Transport, Industry, Waste Management) as well as supporting actions, to be undertaken by the Central Government. Furthermore, Provincial 31

32 Government has also developed Local Action Plan for Green House Gas Emission Reduction (RAD-GRK) throughout 2013 for the further achievement of national GHG emission reduction target. BAPPENAS has established a Climate Change Coordinating Team (CCNCT/ Tim Koordinasi Penanganan Perubahan Iklim) for the implementation of climate change actions (RAN-GRK and RAD-GRK) through Bappenas Ministerial Decree (Kepmen) No. 38/M.PPN/HK/03/2012. The mandate of the CCNCT is to 1) optimize the implementation of Perpres RAN-GRK, 2) coordinate the climate change mitigation and adaptation actions, and 3) increase the efficiency and effectiveness of RAN-GRK target achievement. To support the operation of CCNCT, the CCNCT Secretariat (also known as RAN-GRK Secretariat) was established. (for further assessment on the role of CCNCT, see Indonesia s Framework for Nationally Appropriate Mitigation Actions, 2013). BAPPENAS, assisted by CCNCT and the Secretariat, has developed two guidelines: General Guideline for Monitoring, Evaluation and Reporting (MER) of Implementation of RAN-GRK and RADGRK (2013); and Technical Guideline for Monitoring, Evaluation and Reporting (MER) of RAD-GRK Implementation (2013). Both provinces and line ministries are requested to report the implementation of the respective RAN-GRK and RAD-GRK twice a year. RANGRK and RADGRK monitoring report will be made available in According to these MER guidelines, the actions outlined in the RAN-GRK and RAD- GRK shall comply with the two following elements: GHG emission reduction impact: This is typically measured by comparing the Business as Usual scenario with the GHG emissions in the actual activity scenario. The non-ghg sustainable development impact: In selecting potential GHG mitigation actions, other sustainable development aspects must be considered to ensure that RAN/D-GRK-GRK mitigation actions and NAMAs are in line with the priorities of developing countries development Registration of NAMAs The submission procedure for NAMAs proposed by central government, local government and non-governments (private sector/community association/organisation) to UNFCCC (as unilateral or supported NAMAs), is outlined in Indonesia s Framework for Nationally Appropriate Mitigation Actions (2013). The submission procedure is in line with Perpres No. 10/2011 on Mechanism on Receiving Foreign Loan and/or Grant. All unilateral and supported NAMAs will be integrated into national and provincial development reports. Thus following the regulation, all NAMA proposals will be submitted by Line Minister/Head of Government Agency, or by private sector and community association/organization, to BAPPENAS. And the foreign aid/grant7 received will be managed in compliance with the Indonesian public finance management regulation and mechanism. The NAMA proposals will be subject to review and approval process in a multi-stakeholders meeting. The review and approval process will be conducted by Steering Committee of 7 Foreign aid/grant mechanism is explored in the Government Regulation No. 10 year 2011 as revenue of the national government which comes in the form of foreign exchange (devisa), foreign exchange converted into Indonesian Rupiah, Rupiah, goods, services, and/or securities, as received from the Grant provider, which does not have to be paid back, which could be from domestic source or foreign source. 32

33 National Coordination Team, called as SC CCNCT. All mitigation actions submitted as NAMAs should meet certain criteria and standard as required considering the unilateral NAMAs will subject to domestic verification and the supported NAMAs will be subject to domestic verification which will operate in conjunction with the international verification process. In this regards, mitigation actions which are not approved as NAMA will not require domestic verification MoE regulation on implementation of MRV of national mitigation actions According to Article 6 of Perpres No. 71/2011 it is stated that Provision on the implementation of verification of GHG inventory results and GHG emission reduction achievements from the national mitigation actions is established by the Minister of Environment. In line with this provision the ministry of environment (MoE) is currently in the process of drafting a ministerial regulation (Permen) called Regulation of Minister of Environment on Implementation of Measurement, Reporting and Verification of National Climate Change Mitigation Actions (referred to in the following as MoE s draft Permen on MRV). This draft Permen aims to regulate the MRV of mitigation actions. It targets accurate, transparent and accountable mitigation actions. The MoE Permen on MRV will deal only with mitigation actions that are already being implemented. The emission reductions will be recorded in the National Registry System when mitigation actions meet its MRV requirements. Thus the Permen facilitates the development of domestic verification process to cover those mitigation actions that are to be reported as NAMAs internationally. The verification of mitigation actions will be conducted by a committee called National Committee on MRV (Komisi MRV Nasional or NC MRV). The NC MRV will verify reported verified emission reduction of either government agencies or others (private sector and NGOs). In this regards, the role of the NC MRV is to ensure that all the reported verified emission reduction meets the standard and requirements following the COP s decision Institutions involved in REDD+ Perpres No. 62/2013 establishes the national REDD+ Managing Agency. Next to coordinating the country s REDD+ strategy, it also coordinates the MRV of REDD+. This regulation is in line with Indonesia s National REDD+ Strategy that was designed in 2012 by the Indonesian REDD+ Task Force in reference to Perpres No. 61/2011 No. 71/2011 to support the achievement of these targets. It announces several national REDD+ institutions (inclulding an MRV agency), provincial-level and in some cases district-level REDD+ Institutions and working groups. Article 24 of the regulation describes that REDD+ mitigation actions are to carry out the measurement of GHG according to the REDD+ Managing Agency s guidelines. The agency reports to MoE which conducts the verification of REDD+ mitigation actions. The regulation does not elaborate on a registry of REDD+ mitigation actions, although the REDD+ strategy had made reference to it. Also, the regulation clearly states that the responsibility for monitoring and evaluating REDD+ mitigation actions lies with the agency. 33

34 3.3 Gaps in the current regulations for mitigation actions The current MRV framework still has gaps in its treatment of mitigation actions. These were identified by a careful side-by-side analysis of the international UNFCCC decisions on MRV requirements and Perpres No. 61/2011, No. 71/2011, No. 62/2013, the draft of Permen MoE on MRV, the MER guidelines and the National REDD+ Strategy. Important aspects that still need to be clarified include: The role of REDD+ Agency in providing approval of REDD+ programs, and how these will be treated considering the Perpres No. 10/2011 (see section 3.2.2). As REDD+ may receive foreign grant/loan and also be integrated into national and provincial development reports, SC CCNCT may also involve in the approval process. Therefore working relationship between the SC CCNCT, REDD+ Agency and the Committee for MRV, as well as other line ministries (BAPPENAS, Ministry of Forestry, Ministry of Home Affairs, etc.) should be clearly defined. The reporting and recording of the sustainable development impacts, as opposed to GHG impacts. According to the international decision texts (Decision 2/CP.17) MRV is to cover a range of other information for mitigation actions beyond GHG impacts. The MER Guidelines require NAMAs to monitor and report on this, but it is not yet clear how this is fed into NATCOM / BUR process. The same applies to the international financial support provided for NAMAs. The MRV and registry guidelines for REDD+ are not yet fully defined. Although there are draft MRV guidelines for REDD+ available these still leave questions open regarding how the national-level GHG inventory and the activity-level GHG inventory work together. 4. Recommended institutional design for the national GHG inventory process 4.1 The ongoing BUR preparations As shown in Figure 9 below, the preparation of BUR will be conducted by a Working Group. The working groups will be represented by line ministries and national agencies, including representative from local government associations (e.g. APEKSI, APKASI). The development of NATCOM / BUR in a sustainable manner is done by National MRV and Registry Institution established under the coordination of Ministry of Environment. To ensure the smooth flow of information between the working groups and the other working groups under SIGN and technology transfer (TT), NPD of the TNC (See Figure 9) will be supported by a Unit Management. The unit management will have full time staff responsible for strengthening the coordination between the NATCOM / BUR working groups and other working groups under SC-SIGN and SC-CCNCT (Figure 9). 34

35 Figure 9: Coordination and Work Relations among working groups in the development of NATCOM / BUR SC-SIGN NSC SC CTNCC National Project Director (NPD) Sectoral WGs under SIGN Six-WGs under SC CTNCC WG for the Preparation of BUR WG for the Preparation of TNC Instruction Coordination 4.2 Institutional design for the national GHG inventory (SIGN Centre) The Ministry of Environment in line with the mandate stipulated in Perpres No. 71/2011 established a Centre for National GHG Inventory System (called as SIGN Centre) to coordinate the development of National GHG inventory. The SIGN Centre is aimed to be directed by the Steering Committee (SC) from GHG Inventory and supported by the Sectoral Working Groups of GHG Inventory (SWG) which will be officially established by the Permen of the MoE (see Figure 8 above). At the ministerial and provincial government levels working groups have been set up to develop GHG inventory at sectoral level. Experts will be hired, when necessary, to support the SC and SWGs (see Figure 8 above). The National GHG inventory is to be developed using guidelines prepared by MoE using IPCC 2006 guideline as reference. The development of inventory of each sector activity is to be carried out by the relevant line ministries. Each of the ministries will have certain unit assigned to develop GHG inventory. The institution responsible for the development of National GHG Inventory is listed in Table 6. The calculation was carried out by units under line ministries. 35

36 Table 6: Institution responsible for the development of National GHG Inventory Sectors (Sources of GHG ) GHG from Energy Activity Responsible Ministry Units Within the Responsible Ministry Reference Approach ESDM Pusdatin ESDM - Power Generation Plant Oil and Gas (Fuel + Fugitive) Coal Mining (Fuel + Fugitive) ESDM Pusdatin ESDM PLN Supporting Parties in Calculating GHG (not only data supply) IPP (Independent Power Producer) ESDM Pusdatin ESDM Oil/Gas Companies (Pertamina& Production Sharing Contract) ESDM Pusdatin ESDM Coal companies Transportation ESDM Pusdatin ESDM MoT Energy in Industry ESDM Pusdatin ESDM MoI, large industries/companies Energy in Commercial ESDM Pusdatin ESDM - Energy in Residential ESDM Pusdatin ESDM - GHG from IPPU Industrial Process MoI PusatPengkajian Industri Hijau& LH Product Use To be determined GHG from Waste Treatment Municipal Solid Waste (MSW) Domestic Liquid Waste Industrial Solid Waste (includes medical/ pharmaceutical waste) Industrial Liquid Waste To be determined MoE Deputy IV MoE - Large industries/companies To be determined MoE To be determined Ministry of Public Work MoE To be determined Pusat Pengkajian Industri Hijau & LH MoI MoE Deputy II MoE Pusat Pengkajian Industri Hijau & LH MoI 36

37 Agriculture MoA Planning Bureau MoA Rice Cultivation MoAgric Planning Bureau MoA Livestock MoAgric Planning Bureau MoA Agriculture Soils MoAgric Planning Bureau MoA Prescribed Burning Savanna Field Burning of Agriculture Residues Forest and Land Use Change Agriculture Plantation Land use change and forestry MoA, MoFor Planning Bureau MoA MoA Planning Bureau MoA MoA Planning Bureau MoA MoFor WG on Climate Change at the MoFor IAARD IAARD, Dijten Tanaman Pangan IAARD, Ditjen Peternakan IAARD, Asosiasi perkebunan (GAPKI IAARD, FORDA IAARD IARRD and Ditjen Perkebunan Ditjen Planology (MoFor), Puspijak and Pustanling As mentioned previously, the party responsible in coordinating all activities of the above institutions (see Table 4) is MoE. Recently, MoE and line ministries have established framework of institutional arrangement for developing National GHG inventory. This framework will be part of National GHG Information System (SIGN) Centre that will be established by MoE. More detail information concerning the SIGN Centre is elaborated in Chapter 3. According to Perpres No. 71/2011, results of all GHG calculations are to be checked through a verification process. In the existing plan, the task to verify results of GHG emission inventory is to be carried by a MRV unit/agency. More detail information of the MRV unit/agency is elaborated also in Chapter 3. Specific units within line ministries and supporting parties that are assigned to developed National GHG inventories has been determined (see Table 4). The supporting parties are not only responsible in calculation of their respective inventory but also responsible in data collection and supplied. In collecting the data, line ministries and the supporting parties will be assisted by parties or institutions that have capacity to supply the data related GHG inventory. These institutions work in a particular inventory sector (i.e. Energy, IPPU, AFOLU, and Waste) in a form a working group (WG) led by units of the line ministries. For example, in energy sector, the WG is led by Pusdatin of ESDM, while the member of the WG includes MoI, MoT, relevant supporting parties (PLN, IPP, Pertamina, PSC, etc), and parties/institutions that has capacity to supply data (Ditjend Migas, EBTKE, BPS, PLN, Pertamina, etc. see Table 6). One representative of MoE is assigned as a member of each WG. The WG of each inventory sector were established through Ministerial Notice from MoE. Results of the work of these working groups will be discussed in higher forum (consultation forum) organized by MoE within the context of SIGN Centre. 37

38 The issuance of Perpres No. 71/2011 also raises issues on reporting process from local government and industries/companies to central government as the responsible parties in developing GHG inventory not only include central government but also regional government and industries/companies. Before the issuance of this regulation, the production of national GHG inventory was still carried out by experts although relevant sectors were actively engage in the process of the development of the inventory. Formal Working Group (WG) on Inventory represented by various related sectors was formed to work with experts in producing GHG inventory. During WG meeting, the technical team (experts) discussed data for verification before it is used to estimate GHG emissions level. 4.3 Institutional design for baseline setting at the national level Baseline emission is a reference emission trajectory under business as usual scenario (without mitigation actions). The emission trajectory resulted from mitigation actions (mitigation emission) should be lower than the baseline emission. The emission reduction is the difference between baseline and mitigation emissions. The reduction definition is applicable for various level of mitigation actions, i.e. national, sub-national (regional/ provincial or city/regency), corporate/company, community, as well as project level. Baseline emission for national and sub-national consist of emission from several sectors/sub-sectors. The national/sub-national baseline emission depends on many drivers, i.e. population, economic development, fuel price, technology development/penetration, etc. Meanwhile, baseline emission for company or project level is determined base on the performance of technology used by the company or project before the implementation of mitigation actions. The baseline emission is to be used as reference in calculating emission reduction resulted from mitigation actions, therefore, it has to be accepted by its stakeholders. It is therefore recommended to establish a new unit within MoE that will handle baseline emission issues. This unit has to work closely with line ministries or subsector institutions because the party that will prepare the baseline is the line ministries or relevant institutions in sub-national level. Thus, this unit will facilitate the sectors through BAPPENAS (SC-CCNCT) in setting baseline emission among stakeholders, including the determination of base year, assumptions and model to be used for forecasting the baseline emission trajectory, regulations and programs to be included in the BaU. The establishment of this new baseline unit under the MoE is in line with letter from the Head of UKP4 to the MoE on 30 August 2013 (No. B-692/UKP-PPP/08/2013) that the MoE will be the responsible agency in coordinating the establishment of baseline emission as stated in MORA2P4A23 resulted from inter-ministrial/sectoral meeting held on 19 August Since baseline emission is to be MRV-ed, the baseline unit has to work closely with the to be established National MRV Committee (Komisi MRV Nasional) that will facilitate the MRV of mitigation actions carried out by sectors (baseline and mitigation achievement). The national MRV committee will facilitate the communication concerning the MRV through SC- CCNCT. It should be noted that development of baseline should be based on recent trends and future prospects in energy, industrial production, agricultural production, waste and forestry and land use change trends. It would use economic and engineering models to forecast demand and supply changes, price changes and their impact on underlying production and emission patterns. The tracking of mitigation targets (26% and 41%) will take place at the national level, where the GHG inventory will be compared against the 38

39 national baseline. However, the achievement of mitigation actions cannot directly be determined from comparing this national GHG inventory with the national baseline since the GHG inventory in a certain year was not only resulted from mitigation actions but also several factors or circumstances, such as global worsening of global economic conditions, and natural disaster. There could also be natural reduction of energy consumption, which cannot be considered as mitigation efforts. Therefore, to measure the real achievement of GHG mitigation actions, the unit has to determine the national baseline by developing GHG emission level projection under BAU scenario. With the same model, the unit could then develop projection of GHG emission level under mitigation scenarios by including the various mitigation policies of the Indonesian government including the mitigation actions proposed under RAN-GRK/RAD-GRK. The real achievement of each mitigation action can be monitored from implementation of each activity and put all actions under mitigation scenario. The achievement of GHG emission reduction is estimated difference between this level and the baseline level 4.4 Capacity development requirements for the national GHG inventory Indonesia has prepared two national communications on climate change, the content of which include national GHG inventory. As mentioned previously, the role of line ministries and staffs in the preparation of national inventories was limited as climate change and the related issues is a new subject for most of Indonesian government staffs. For future national GHG inventory preparation the involvement of line ministries and staffs has to be increased. To do so, the capacity of line ministries and staffs has to be enhanced. In addition, according Perpres No. 71/2011, regional government (provincial) is obliged to prepare GHG inventory for provincial level. Therefore, the capacity enhancement should also include provincial government and staffs. In the coming years, Indonesia has to prepare climate change documents more frequently (BUR, NATCOM) and with higher quality as these document will have go through MRV and ICA processes. Future GHG inventories for NATCOM/BUR therefore have to have a higher quality (compared to previous inventories), i.e., by improving inventory methodology by increasing Tier and improving and expanding activity data. As the inventory will become more complex, the capacity of line ministries and staffs and also local government and staffs need to be enhanced accordingly. In general, the capacity that is required to carry out GHG inventory includes the capacity to: determine key sources (including key sources analysis) collect credible activity data determine emission factor select proper methodology (determine Tier 1 or higher Tier) estimates GHG emission level carry out uncertainty analysis for activity data, emission factor, and GHG estimates carry out quality control of the whole process of GHG inventory understand the process of quality assurance that will be carried out by third party understand archiving system of data and information related to the GHG inventory. 39

40 GHG inventory is to be developed by individuals/persons who have the above capacity. According to Perpres No. 71/2011, individuals that will carry out GHG inventory should meet certain criteria and competency standard for the above capacity. However, these criteria and competency standard have not been established and are still being prepared by MoE. Based on Assessment of Capacities in Managing Data Relevant for GHG Inventories and Monitoring of GHG Mitigation Actions In The Energy, IPPU and Waste Sectors at The National Level (Ministry of Environment, 2013), the need for capacity building varies between sectors. The capacity building needs in various sectors are as follows: Energy sector: The capacity of PUSDATIN-ESDM in the producing GHG emission inventory from energy sector is sufficient but limited to TIER-1 method. Therefore, for higher TIER, capacity strengthening of this institution is recommended. Application of higher TIER methodology will require support from several relevant ministries/institutions, particularly Ministry of Transport (MoT) and Ministry of Industry (MoI). It should be noted, MoT will include several directorate generals or offices under MoT to support detail activity data regarding the energy consumption in transport sector. In addition, MoI will also include several directorate generals/offices/units under MoI as well as industries and relevant association to support detail activity data regarding the energy consumption in industrial sector. Therefore, the strengthening of capacity for developing GHG inventory from energy sector should also include MoT and MoI and their relevant institutions. The capacity building should include improvement in application of higher TIER methodology for estimating GHG, improvement in data collection/development (produce acceptable data estimates whenever needed data are not available), development local emission factor and other relevant parameters. IPPU: The capacity of MoI, which is the responsible party for GHG inventory of IPPU sector, is sufficient but still limited in TIER-1 approach. Capacity strengthening of MoI in GHG inventory, particularly for higher TIER methodology, is therefore recommended. As inventory of emissions from industrial process will involve industries (private sectors), establishment of means/mechanism for facilitating close communication between MoI and industries is recommended. Discussions concerning inventory of GHG emissions from product uses has so far been limited. It is recommended therefore to strengthen the capacity of MoI and relevant ministries (probably Ministry of Trade) in developing GHG inventory from product uses. Waste: GHG Inventory of waste sector is the responsibility of Deputy IV of MoE (Management of Hazardous Substances and Wastes). Data collection for establishing the inventory will heavily rely on the report from sub-national government (city wastes) and industries. Technical assistance for strengthening the capacity of Deputy IV for data collection, compilation and processing into GHG inventory is recommended. Personnel of waste sector in sub-national level also need to be improved particularly in activity data collection (i.e. MSW weight data instead of volume data), development of local emission factor and other relevant parameters). Capacity building of sub-national personnel is important because the data source of waste sector rely on report from sub-national government. It should be noted that the capacity building activities should include also staff of local universities in order to ensure that the knowledge obtain during the capacity building activity will be sustainable. AFOLU: GHG Inventory of AFOLU sector will be responsibility of the Ministry of Agriculture and the Ministry of Forestry. Some of capacity buildings required by the sectors include 40

41 (i) Development of dedicated data collection division at the Kementan and Kemenhut and their inclusion in National Inventory System; (ii) Capacity development of inventory team in preparing the GHG inventory at higher Tier methodology; (iii) Enhancement of capacity of GHG Inventory Team in deriving or generating activity data whenever not available: survey, proxy, etc.); and (iv) Strengthening data collection and emission factor development capacities of local personnel following the available Standard National Indonesia (SNI). Local Government: Provincial government will be responsible in preparing inventory at provincial level. Currently, provincial government has difficulties in collecting data of energy sector and IPPU due to the authority aspect and not due to capacity. Therefore, it is recommended that in the near future provincial government concentrate on the GHG inventory of waste sector. In the long run, if it is deemed necessary and practical, GHG emissions from energy and IPPU are calculated by sub-national government. If that is the case, capacity building for sub-national personnel in energy and IPPU sector are needed. In addition, data needed for developing sub-national GHG inventory can be provided by central government, i.e. Pusdatin ESDM. 41

42 5. Recommended institutional design of MRV for Mitigation Actions 5.1 Overview In this chapter the institutional design for MRV of mitigation actions will be recommended based on the analysis in Chapter 2 and 3. First of all, following the description of MoE s draft Permen on MRV as outlined in Chapter 3 the following five types of mitigation actions are identified: A. Government-led mitigation actions to be subdivided in: RAN/D-GRK actions not approved as NAMAs RAN/D-GRK actions approved as NAMAs (unileteral and supported) REDD+ mitigation actions B. Other (private sector or NGO initiated) mitigation actions that seek national recognition (e.g. climate village, green buildings) or that have been approved as NAMA by the SC CCNCT Based on the analysis in Chapter 2 the following components of MRV are considered relevant: An approval process for mitigation actions Registration of mitigation actions Monitoring and reporting guidelines Verification guidelines The recommended institutional structure will build on existing institutions and initiatives for climate change mitigations while trying to address the gaps that still exist. The gaps between the MRV requirements as outlined in Chapter 2 and a full-blown MRV process for the above 5 types of mitigation actions include (see also Chapter 3 for a more detailed explanation): There is currently no agency/unit/committee responsible for domestic NAMA verification of RAN/D-GRK actions There is currently no agency/unit/committee responsible for the domestic verification / quality checking of REDD+ mitigation actions. The role of MoE in the NAMA and REDD+ identification processes to ensure compliance with MRV requirements is not yet clarified. The M&R and registry guidelines for REDD+ are not yet fully defined. The recording of sustainable development impacts, as opposed to GHG impacts, and the international financial support is not dealt with. The figure below provides an overview of the proposed MRV cycle for each type of mitigation actions. 42

43 Figure 10: Overview of types of mitigation actions and related guidelines and registries RAN/D-GRK activities (not approved as NAMAs) RAN/D-GRK activities approved as domestic NAMAs RAN/D-GRK activities approved as supported NAMAs Other mitigation actions (non governmental) REDD+ mitigation actions Approval of mitigation actions SC-CCNCT SC-CCNCT SC-CCNCT MoE National REDD+ Management Agency Registration of mitigation actions RAN/D-GRK database + National Registry System (NRS) RAN/D-GRK database + NRS RAN/D-GRK database + NRS NRS NRS + National REDD+ Registry Monitoring and reporting guidelines MER guidelines MER guidelines MER guidelines MoE's Permen on MRV National M&R guidelines for REDD+ Verification guidelines MoE MoE GL for domestic verification MoE GL for domestic verification + int'l NAMA verification MoE GL for domestic verification MoE GL for domestic verification+ Int'l REDD+ technical assessment Figure 10 provides an overview of the MRV process for each type of mitigation action including both existing institutions with their existing roles as well as suggested new roles for these institutions. Table 7 below provides a distinction between existing and new roles of the MRV institutions mentioned in Figure 10: Table 7: Existing and additional roles for MRV institutions Institution Existing role in MRV (as laid out in Chapter 3) Proposed additional role in MRV Steering Committee for Climate Change National Coordination Team (SC-CCNCT) RAN/D-GRK MER guidelines Approval of government led mitigation actions Guidelines for monitoring and reporting MoE representative in SC-CCNCT to ensure mitigation actions meet MRV requirements Require NAMAs to report on international financial support 43

44 RAN/D-GRK database (managed by the RAN/D-GRK Secretariat) MoE will mandate to National Committee on MRV (NC MRV) Annex to MoE s draft Permen on MRV MoE s National Registry System for Climate Change Mitigation (NRS) National REDD+ Management Agency emission and development impact of RAN/D-GRK-GRK activities / NAMAs Recording the mitigation impact of RAN/D-GRK activities / NAMAs Coordination of verification for mitigation actions in line with draft Permen on MRV Guidelines for monitoring and reporting of implemented mitigation actions Recording of implemented and achievement of emission reduction of all mitigation actions Approval of REDD+ mitigation actions Guidelines for monitoring and reporting of REDD+ mitigation actions received Record the development impact and international financial support received Coordination of domestic verification for NAMAs Coordination of domestic verification / quality checking for REDD+ mitigation actions Appointed a unit within the MoE (e.g. mitigation division of Deputy III) to verify (internal quality check) for all MER of RAN/D-GRK submitted by Government Agencies to BAPPENAS (see section 5.5 and 6.2) Include REDD+ mitigation actions Include REDD+ mitigation actions establish MRV Agency for REDD+ coordinate with line ministries and subnational governments on national and subnational MRV The remainder of this chapter will describe the involved steps in the MRV process in more detail. In describing the MRV process we follow the steps in the MRV cycle as laid out in section 2.1, above, and as summarized in Figure 11, below. 44

45 Figure 11: The steps of the MRV cycle and respective sub-chapters 5.2 Identification and approval of mitigation actions Several institutions have important contributions to mitigation actions. Most importantly, the activities themselves mostly originate in the sector ministries. DNPI as the climate change focal point constitutes an agency responsible for registering mitigation action activities to be proposed as NAMAs to the UNFCCC. Meanwhile, BAPPENAS is the ministry responsible for coordinating the implementation of the RAN/D-GRK framework which is the basis for further NAMA development (see Section above). Some sector ministries have also developed programmes to encourage various parties and private sectors to conduct mitigation actions in support of the national programme. Also other stakeholders and in particular the private sector have prepared mitigation actions outside RAN/D-GRK. In summary, the following institutions play a role in identification and approval of mitigation actions, NAMAs and REDD+ mitigation actions: 45 Sector ministries developed mitigation action plans (RAN-GRK, Perpres) and provincial government developed mitigation action plans (RAD-GRK, governor decree). NAMAs are derived from RAN/D-GRK mitigation actions. Non-governmental stakeholders and the private sector develop other mitigation actions besides the ministries. REDD+ agency: The newly established REDD+ Management Agency will play an important role for REDD+. The Ministry of Forestry will also be important in this context. Full clarity on how these work together yet has to emerge. RAN/D-GRK Secretariat (or proposed CCNCT Secretariat). The secretariat functions as the center for information and consultation on technical issues in mitigation action development. Its role is to facilitate Local Governments in RAD-GRK development and coordinate the implementation of RAN-GRK review. The SC-CCNCT shall facilitate the approval process of the NAMAs among relevant institutions including BAPPENAS as the RAN-GRK coordinator, the respective line ministry proposing the NAMA, Ministry of Environment in regard to GHG emission impacts, Ministry of Finance being responsible for national budgeting.

46 Private sector: The private sector has the possibility to engage in mitigation actions via the Clean Development Mechanism. Currently over 147 amount of CDM projects have been registered in Indonesia and 9 Programme of Activities. The latter are a special type of CDM projects that can bundle a large amount of similar projects in one sector (e.g. biogas digesters, small hydro). MoE: The MoE will contribute to the approval and identification process by approving the MRV arrangements of proposed mitigation actions as part of the CCNCT approval process. A set of documents need to underlie the registration procedures for mitigation actions. Such documentation should essentially summarize most of the information that will later need to be available for registration (see section 2.5 on information requirements). Importantly the documents need to include a monitoring plan. A key recommendation of this report is that a registration of mitigation actions is already carried out after their approval. This means that there is a two-step process: a check on the approval of the mitigation action takes places early on in the cycle; a check on its performance takes places at a later stage for an already registered mitigation action. A further key recommendation of this report is to require the activity proponents to prepare a Mitigation Action Design Documentation8 (MADD) that would provide the relevant information components of the mitigation actions for the national registry system in a way that it would cover international reporting obligations. This means that the MADD of mitigation actions would need to report on the information as laid out in Table 8, below. Table 8: Information requirements for the BURs, supported NAMAs and for the NRS BUR information requirements for mitigation actions name and description of mitigation actions, including information on nature of action, scope (namely sector and emission), quantitative goals and indicators of progress; Objectives of the action and steps envisaged to achieve that action; information on methodology and assumptions; International information requirements for supported NAMAs a description of the mitigation action and the national implementing entity, including contact information; the expected time frame for the implementation of the mitigation action; other relevant information, including the co-benefits for local sustainable development; the estimated emission reductions; other indicators of Suggested NRS information requirements Name of the mitigation action National implementing entity including contact information Sector and kind of emissions Objectives Description of activities Expected time frame for the implementation Co-benefits for local sustainable development Progress indicators (including emission reductions and others) 8 In line with the concept of a Project Design Document under the CDM 46

47 information on the progress of implementation of mitigation actions and the underlying steps taken or envisaged, and the results achieved, such estimated outcomes (metric depending on the type of action) and estimated emission reductions, to the extent possible; information on international market mechanism; Information of funding and support implementation; the estimated full cost of the preparation; the estimated full cost and/or incremental cost of the implementation of the mitigation action; the amount and type of support (financial, technology and capacity-building) required to prepare and/or implement the mitigation action; Targets for the progress indicators (including emission reductions and others) Methodological information for progress indicators Current state of the progress indicators (including emission reductions and others) Which international carbon finance mechanisms are applied? (CDM, REDD+, supported NAMA, unilateral NAMA, etc.) Estimated cost of preparation Estimated cost of implementation Amount and type of other support required 5.3 Registration of mitigation actions A key recommendation of this report is that MoE coordinates mitigation actions via a new national registry system of mitigation actions (NRS). The NRS keeps track of all mitigation actions including RAN/D-GRK activities, non-governmental sector mitigation actions seeking recognition, activities developed for the carbon markets (whether CDM or voluntary carbon markets), NAMAs and REDD+. The MoE is assigned to develop NATCOMs / BURs. So all mitigation action plans which will become part of the national mitigation action or be proposed to get international recognition as NAMAs or REDD+ must all be recorded at MoE. Based on the existing and current condition, the relevant arrangements follow the scheme as shown in Figure

48 Figure 12: Role of the NRS as a central data repository to collect information on mitigation actions With the NRS, the institutions involved in mitigation actions play the following roles: Public sector (sector ministries) and private sector: develop the mitigation actions for inclusion in the RAN/D-GRK and/or for inclusion under the NAMA and REDD+ schemes. BAPPENAS: coordinates the sector ministries with the RAN/D-GRK. Steering Committee CCNCT: identifies NAMAs from the activities included in the RAN/D-GRK and other activities. MoE: records all mitigation actions from the RAN/D-GRK, from REDD+ and other sources in its NRS (list of mitigation actions). Verifies the measurement results of NAMAs and REDD+ mitigation actions. Prepares the NATCOM / BUR. REDD+ agency: leads the national identification of REDD+ mitigation actions and has the national REDD+ registry. As national focal point, facilitates international communication around REDD+. DNPI: reports NAMAs to the international NAMA registries. Reports NATCOMs / BURs to the UNFCCC. It is suggested to design the NRS in a way that it would meet information requirements for the relevant international reporting tasks: BUR, NAMAs and REDD+. This means that it would need to cover the necessary information for BUR reporting on mitigation actions and for reporting of verification results to the international NAMA registry. It should be noted that there are no specific international information requirements for domestic NAMAs; it is 48

49 however suggested to treat these similar to supported NAMAs and other mitigation actions. For REDD+ international reporting on individual mitigation actions is not required. To facilitate the recording of development impacts it is recommended that the RAN/D- GRK database under management of BAPPENAS systematically records these impacts when mentioned in NAMAs and reports on these to MoE for inclusion in the NRS. Likewise, the same is recommended for international financial support received by NAMAs (to be recorded by the RAN/D-GRK database and reported to MoE NRS). 5.4 Monitoring and reporting of mitigation actions Monitoring and reporting of emissions In order to analyse the monitoring requirements for mitigation actions the same distinction as above is useful: The monitoring and reporting of RAN/D-GRK activities is governed by the MER guidelines; The monitoring and reporting of REDD+ mitigation actions will be regulated by particular guidelines for such activities that yet need to be developed at the national level; For other non-governmental mitigation actions MRV needs to follow the regulations of MoE s Permen on MRV directly. The MER guidelines regulate reporting for the mitigation actions that are included in the RAN/D-GRK (see section 3.2.1, above). The sector ministries and the provinces are required to report on progress achieved in the mitigation actions to the RAN-GRK Secretariat at BAPPENAS. For reporting the secretariat has developed a set of sector templates that need to be used. Although the guidelines do not elaborate on quality checking or reviews, it is recommended that the secretariat carries out such a basic quality checking of information received. For REDD+ mitigation actions, a set of national registry an MRV guidelines needs yet to be developed. Such guidelines would likely describe in detail how data are collected, processed and evaluated at the provincial levels. The guidelines would need to contain not only information on the handling of data but also on its management in terms of quality checking, documentation and archiving. Importantly, these guidelines will need to ensure full consistency between values reported for individual mitigation actions, the national GHG inventory and the national reference levels. The REDD+ registry needs to be built in a way to reconcile these data from different levels. The MRV of other, non-governmental mitigation actions is regulated in the MoE s draft Permen on MRV. It contains several annexes that would describe the reporting and the verification of mitigation actions. The reporting includes that mitigation actions submit monitoring reports on the information collected during ongoing measurement of emission reductions as well as other parameters that are line with the monitoring plan. The reporting needs to cover the information requirements of the relevant registries. 49

50 5.4.2 Monitoring and reporting of development impact and international financial support The MER guidelines of the RAN/D-GRK require RAN/D-GRK activities to monitor and report on the sustainable development impact of their activities to ensure that RAN/D-GRK mitigation actions and NAMAs are in line with the priorities of developing countries development. Currently it appears that international financial support received for NAMAs is not yet monitored and reported and it is recommended that the MER Reporting Guidelines are expanded to require NAMA participants to report on received international financial support. While recognising that development impacts can vary largely depending on activity and circumstances it is recommended that with experience in NAMA development and implementation reporting guidelines are developed that aim to standardized format and terminology used between NAMAs. This would facilitate the incorporation of this information in national and international reporting and registration (such as the NRS and in BUR). 5.5 The verification of mitigation actions According to the international context for mitigation and MRV in section 3.2.3, the following verification and review processes for GHG measurements and reports of verification actions are relevant. (In the below, a distinction is made between different kinds of international reporting on mitigation actions not so much the actions themselves: e.g., land-use related activities could be reported under either NAMAs or REDD+.) The domestic verification for NAMAs will be defined and carried out by the country where the NAMA is to be implemented. It applies to both NAMAs with domestic financing only and also with international financing. The international verification for NAMAs will have to be determined in close collaboration with the international donor that supports the NAMA. In addition, the UNFCCC may develop further guidance on minimum verification requirements for international verification which then need to be adopted by the NAMA supporters. For REDD+ there is a process of technical assessment of REDD+ results and reference levels that considers national aggregate information. At the national level, it may be advisable to have a more detailed quality checking of information to be collected in the national REDD+ registry. Figure 13 below provides an overview of the relevant elements in the verification process for the most important processes covering the identified five types of mitigation actions. 50

51 Figure 13: Overview of types of verifications Quality checking of mitigation action from nongovernment al sectors Quality checking of RAN/D-GRK mitigation actions Domestic verification of NAMAs International verification of NAMAs International technical assessment for REDD+ Scope private sector and NGOs RAN/D-GRK mitigation actions not NAMAs All NAMAs Supported NAMAs Activities and nat'l inventory Governing body MoE Bappenas and MoE MoE (NC MRV) UNFCCC (?) TBD Standard MoE's Permen on MRV MER guidelines MoE's Permen on MRV Int'l guidelines Int'l guidelines Accreditation process Managed by MoE Not relevant Managed by MoE Managed by UNFCCC (?) Nomination Reviewer / verifier Sector ministries or auditors Not relevant Sector ministries or auditors Auditors Nominated int'l experts Appeals procedure Not relevant Not relevant Managed by MoE/Others Managed by UNFCCC (?) Managed by UNFCCC Among the above kinds of verification process, most relevant for MoE is the domestic NAMA verification. MoE will carry out verification of GHG emission reduction according to the provisions in the Perpres No. 71/2011 on the GHG inventory and No. 62/2013 on the REDD+ agency. The level of verification to be carried out within MoE needs to meet international requirements (see Figure 13, above), including regarding the typical components verification systems (see section 2.6, above). Entities eligible for conducting the verification of the mitigation actions should be accredited. The accreditation of the verification entities may be managed by a unit at the MoE responsible for the standardization process. Related sector ministries could develop a unit responsible for doing internal verification as long as meeting the standard which has been defined by the MoE otherwise it can be done by other external auditor from accredited verification entities. Also relevant for MoE are any quality checks to be carried out in connection to the NRS. For all mitigation actions to be included in the NRS an internal quality check should be carried out. The internal quality check would focus on a plausibility check of submitted data and checking whether or not the proposed mitigation actions are subject to some sort of 51

52 quality control or verification of the data. As it is assumed that the NRS will contain the same activities as the chapter for mitigation actions in the BUR, the NRS quality check and the ICA apply to both of these in the same way. Once the quality checking process is completed, the reports will be included in the NRS. As mandated by the PP71/2011, the quality checking or verification of all reported emission reduction of the RAN/D GRK (MER reports) should be done by the MoE. The quality checking may take two stage processes. The first stage called in desk review which will review all the MER reports (consistency with MER Guideline, completeness of information etc.). The second stage called centralized review which will be conducted if from the in desk review, the review team found data or information in the MER reports which need clarification from the mitigation implementing agencies. In this stage, the person in charge in preparing the MER Report in each government agencies will be called for centralized review meetings for clarification on the data and information. The result of these review processes will be used for providing recommendation to the mitigation implementing agencies for the improvement of the MER of the mitigation actions. In the next submission of the MER, the mitigation implementing agencies should clearly describe how the recommendation is taken for the improvement of the quality of the mitigation actions. 5.6 Conclusion: Step-by-step breakdown of the MRV process for the different kind of mitigation actions This section summarizes the MRV processes for the five main kinds of mitigation actions identified in section 5.1. It needs to be read together with the graph in that section that breaks down MRV by its components (approval registration measurement / reporting verification). Conversely, this section describes the same process from the perspective of the different kind of mitigation actions (private-sector actions seeking recognition, RAN/D- GRK actions, actions for REDD+). Other mitigation actions Draft Ministerial Regulation of MoE on MRV indicates that MoE through the NC MRV can decide to approve and recognize the private sector s efforts contribute to the national mitigation targets. Recognition does not involve seeking funding under international NAMA or REDD+ schemes, but it involves registering private-sector actions and including them in the national registry system and the international NATCOM/BUR reporting. The privatesector is responsible for regular measurement of emission reductions achieved according to the provisions of the monitoring plan in the mitigation action design documentation and reporting on its results with a monitoring report. MoE uses external auditors to verify results before including mitigation achievements as outlined in the verification report in the national registry system (cf. registry accounting). RAN/D-GRK activities Perpres No. 61/2011 lays out a national strategy for mitigation actions, the RAN/D-GRK. Provincial-level government and sector ministries are held to identify mitigation actions. There is no clear approval required but the RAN-GRK Secretariat collects tabular submissions functioning as mitigation action design documentation and includes them in a database (cf. registration). Measurement is carried out according to the MER guidelines and 52

53 sectoral templates that function as monitoring plan and monitoring report, which are reported to the RAN-GRK Secretariat. Although the Secretariat does not carry out a detailed quality checking of submissions (cf. verification) and does not issue a related statement or verification report numbers are continuously updated in their database and MoE also periodically integrates all data in the national registry system (cf. registry accounting). Domestic and supported NAMAs On top of the regular process for mitigation actions under the RAN/D-GRK, the actions to be developed as NAMAs undergo the process according to the strategy in the draft Indonesian National NAMA framework. Sector ministries identify NAMA proposals among those already included in the RAN/D-GRK. The Steering Committee of the Climate Change National Coordination Team at the RAN-GRK Secretariat approves of proposals based on yet to be defined mitigation action design documentation that is likely to be more complete than the RAN/D-GRK documentation and to also include a monitoring plan. NAMA proposals are then included in the international NAMA registry (cf. registration). Once funded for implementation, implementers measure mitigation achievements and report to MoE with a yet to be defined monitoring report. MoE uses external auditors to verify results before including mitigation achievements as outlined in the verification report in the national registry system (cf. registry accounting). For NAMAs receiving international support, there will be an international verification according to international guidelines that are still under discussion. REDD+ mitigation actions The national REDD+ strategy is available with the work of the Satgas REDD+ and with Perpres No. 62/2013. A range of actors, potentially including the private sector, identify such mitigation actions and propose them with a yet to be defined mitigation action design document for the approval of the national and sub-national REDD+ agencies. The national REDD+ agency includes mitigation actions in the national REDD+ registry (cf. registration). The implementers themselves are responsible for measurement according to yet to be defined REDD+ MRV guidelines that function as monitoring plan, reconciling activity-level measurements with the national GHG inventory and submit results to the REDD+ agency using a yet to be defined monitoring report. After the REDD+ agency reports to MoE, the MoE verifies the monitoring results and issues a yet to be defined verification report, so that the REDD+ agency can use to update numbers in the national REDD+ registry, while a reduced set of such information will also be included in the national registry system (cf. registry accounting). Furthermore, the results will be subject to a technical REDD+ assessment in conjunction with the ICA (cf. international verification). 53

54 6. Conclusions on institutional arrangements for MRV in Indonesia 6.1 Key conclusions MRV of national GHG Inventory With regard to the institutional design for MRV of the National GHG Inventory this report recommends that the current institutional design of the Centre for National GHG Inventory System (called SIGN Centre) to coordinate the development of National GHG inventory is adequate including its relations with MoE, line ministries, local governments and external experts from universities (see Figure 8 above). It is recommended that the Indonesian Government supported by international partners further invests in its domestic capacity to execute and expand its national GHG Inventory process. These activities would include: Energy sector: Expand the capacity of PUSDATIN-ESDM in the producing GHG emission inventory from energy sector beyond the tier-1 method and provide support to supporting ministries in particular Ministry of Transport (MoT) and Ministry of Industry (MoI). IPPU: Expand the capacity of Ministry of Industry (MoI), which is the responsible party for GHG inventory of IPPU sector beyond TIER-1 approach. As inventory of emissions from industrial process will involve industries (private sectors), establishment of means/mechanism for facilitating close communication between MoI and industries is recommended. It is also recommended to strengthen the capacity of MoI and relevant ministries (probably Ministry of Trade) in developing GHG inventory from product uses. Waste: GHG Inventory of waste sector is the responsibility of Deputy IV of MoE (Management of Hazardous Substances and Wastes). Technical assistance for strengthening the capacity of Deputy IV for data collection, compilation and processing into GHG inventory is recommended. Personnel of waste sector in sub-national level also need to be improved particularly in activity data collection (i.e. MSW weight data instead of volume data), development of local emission factor and other relevant parameters). It should be noted that the capacity building activities should include also staff of local universities in order to ensure that the knowledge obtain during the capacity building activity will sustainable. AFOLU: It is recommended to develop the following capacities: (i) Development of dedicated data collection division at the Kementan and Kemenhut and their inclusion in National Inventory System; (ii) Development of capacity of inventory team in preparing the GHG inventory at higher Tier methodology; (iii) Enhancement of capacity of GHG inventory team in deriving or generating activity data whenever not available: survey, proxy etc.); (iv) Strengthening data collection and emission factor development capacities of local personnel following the available Standard National Indonesia (SNI) MRV of national mitigation actions With regard to the MRV procedures for the five types of mitigation actions identified in Chapter 5, Figure 10 (above) summarizes the institutions involved in the MRV cycle. In 54

55 terms of institutional design the new roles as summarized in Table 7 (above) need to be further developed within BAPPENAS and MoE. Referring to initiative from the MoE relating to MRV (see section 3.2.2) and related COP decision on NAMAs and REDD+, proposed working mechanisms between REDD+ Agency, SC CCNCT and NC MRV might follow Figure 14. Figure 14: Working relationship between REDD+ Agency, SC CCNCT and NC MRV All mitigation actions which have been recorded in the national recording system (NRS) could be categorized into two namely mitigation actions which are still at planning stage and the other ones already at the implementation stage. Mitigation actions which are still at planning stage and will be submitted to UNFCCC for seeking international support and recognition as supported and unilateral NAMA should get approval from SC CCNCT, while for REDD+ mitigation actions, it may be approved by the REDD+ Agency. Once the mitigation actions enter the implementation stage, they should subject to national verification which will be done by the NC MRV. It should be noted that the NC MRV is only to ensure that the reported verified emission reduction claimed by an entity who implement the mitigation actions meets the standard and requirements as defined by the COP s decision (see Section 3.2.2). This means that before submitting its request to NC MRV for getting national recognition, the mitigation implementing entity must have verified its reported emission reduction. The NC MRV will issue the emission reduction certificate if the reported verified emission reduction meets the standard and the requirements. In the case where entities have implemented mitigation actions and previously have not got endorsement from the SC CCNCT as NAMAs, they are also eligible to get national recognition as long as their reported verified emission reduction meets the standard and the requirements as defined by the NC MRV. This allows Government of Indonesia to report these emission reductions as unilateral NAMA. For activities getting support from international as supported NAMAs will be subject not only to national verification but also to international verification developed for those activities. The verified resulted emission from the implemented NAMAs and REDD+ mitigation actions will be certified and registered in the separate section of the NRS. For mitigation actions 55

56 which are not proposed as NAMA will not required approval from SC CCNCT but they can be reported in BUR. 6.2 Institutional setup for MRV of GHG emissions within MoE NC MRV could be operated in transition period before MoE established its own MRV unit. This unit will integrate the implementation of the important elements in mitigation actions, namely: GHG inventory implementation, MRV system, and Registry system as shown in Figure 15. Figure 15: MoE s suggested new unit for the MRV of greenhouse gas emissions While the SIGN centre is already available to work with the national GHG inventory and emissions projects, as seen in the graph, three new sub-units could be set up to work on the emission projection, the reporting and the verification of mitigation actions. Firstly, a new sub-unit on emission projection should be responsible for addressing the emission projection issues. This unit will facilitate the sectors through BAPPENAS in setting baseline emission among stakeholders, including the determination of base year, assumptions and model to be used for forecasting the baseline emission trajectory, regulations and programs to be included in the BaU as well as forecasting the emission under mitigation scenarios. As defined in Section 4.3, the achievement of mitigation actions cannot directly be determined from comparing the national GHG inventory with the national baseline since the GHG inventory in a certain year was not only resulted from mitigation actions but also several factors or circumstances, such as global worsening of global economic conditions, and natural disaster. Thus, the use of the model is very important to justify the effectiveness of mitigation policies/programs in reducing the GHG emission following the emission reduction target. Secondly, a new sub-unit could be set up to deal with the reporting of mitigation actions. The activities include: 56