Financing of Nationally Appropriate Mitigation Actions (NAMAs) in the context of national climate strategies

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1 Financing of Nationally Appropriate Mitigation Actions (NAMAs) in the context of national climate strategies Laura Würtenberger GIZ, Competence Centre for Climate Change Gudrun Bruzak GIZ IS International Conference on Circular Economy Trier, 6 November 2013 Page 1

2 GIZ Mission to promote international cooperation for sustainable development. GIZ is an implementing organisation with a special focus on long-term capacity development programmes GIZ operates in over 130 countries with more than 17,000 staff members GIZ implements 392 climate-related projects with a project value of 1.3 billion EUR, projects with climate focus account to 20% of GIZ portfolio 02/12/2013 Page 2

3 Outline Background on Nationally Appropriate Mitigation Actions (NAMAs) Financing NAMA implementation 02/12/2013 Page 3

4 Outline Background on Nationally Appropriate Mitigation Actions (NAMAs) Financing NAMA implementation 02/12/2013 Page 4

5 The need for mitigation actions in developing countries According to IPCC AR4, need for global emission reductions by at least 50% below 1990 levels by 2050 to achieve stabilization of atmospheric GHG concentrations at 450 ppm CO2-eq Emission reductions be developed countries only would not be sufficient 2010/COP16: The Parties recognized «that deep cuts in global greenhouse gas emissions are required...to hold the increase in global average temperature below 2 C above preindustrial levels...» Developed countries: Economy wide emission reduction targets to achieve the goal of 25 40% emissions reductions below 1990 level by Developing countries: to implement Nationally Appropriate Mitigation Actions (NAMAs) with the goal to achieve deviation from BAU emissions in 2020 Page 5

6 History of NAMAs: international climate negotiations Kyoto Protocol: 5% emissions reduction by 2012 compared to 1990 Bali Action Plan: Nationally appropriate mitigation actions in a measurable, reportable and verifiable manner Cancùn: NAMAs in the context of sustainable development, deviation in emissions relative to business as usual emissions in UNFCCC (Rio): common but differentiated responsibilities to mitigate GHG emissions Copenhagen: Internationally supported NAMAs to be recorded in a registry along with relevant support. Actions will be added to appendix II. Durban: Decision to create a NAMA registry prototype Page 6

7 A few important characteristics of NAMAs Creates jobs Protects biodiversity Adapted from Sakamoto, 2013 Page 7

8 A few important characteristics of NAMAs A voluntary mitigation action by a developing country government embedded in national sustainable development priorities. NAMA-types: Unilateral: for recognition, no outside support Supported: (Some part of) action is conditioned upon international support (Credit-generating: Carbon credits sold by developing country on international carbon market for emission reductions below an agreed baseline. Not part of UNFCCC negotiations; discussions on New Market Mechanism ongoing) NAMAs tend to aim for transformational change of a sector towards a low-emissiond development pathway Page 8

9 NAMAs in the context of Low Emission Development Strategies (LEDS) LEDS Overarching framework for mitigation in the country Energy sector NAMA Transport sector NAMA Industry sector NAMA Multisectoral NAMA Concrete sectoral and cross-sectoral mitigation actions that contribute to sustainable development Measuring, reporting, verification Page 9

10 Different types of NAMAs: Strategy policy - project Page 10

11 Examples of NAMAs in the waste sector Chile National Programme for for Catalyzing Industrial and Commercial Organic Waste Management Colombia - Solid Waste NAMA Phillippines Solid Waste Management NAMA Overall 73 NAMAs under development 3 NAMAs under implementation (Source: Vietnam CH4 reduction from landfills Page 11

12 Outline Background on Nationally Appropriate Mitigation Actions (NAMAs) Financing NAMA implementation 02/12/2013 Page 12

13 There is no such thing as one NAMA financing mechanism Page 13

14 Different NAMAs have different scopes cover different sectors and use different policy, regulatory and financial instruments Source: NAMA database Page 14

15 ...and thus require individual financing solutions and different financing instruments/mechanisms Many NAMAs are likely to have a policy / regulatory / capacity building component and a financial component aim at incentivizing private sector investments include domestic and international public finance Page 15

16 Sources of NAMA Finance Page 16

17 International climate finance for NAMA implementation Various international climate finance sources becoming available now for financing of NAMAs: UK / German NAMA Facility launched in December 2012 GEF 6 ( ) likely to include funding for NAMA implementation Green Climate Fund expected to be fully operational in 2014 In addition, NAMA implementation is expected to be financed bilaterally in the short- to medium term through existing channels of cooperation 02/12/2013 Page 17

18 The UK/German NAMA Facility Announced at COP-18 in Doha (2012) Germany and the UK jointly provide 70m to support the implementation of NAMAs in developing countries Focus on supporting transformational NAMAs and generation of lessons learnt Support provided as financial assistance (grants, concessional loans and guarantees), and as technical assistance (e.g. capacity building) where closely aligned with financial instruments First call for outlines at the end of June 2013, selection of NAMAs Support Projects for funding in October 2013 Technical Support Unit hosted by KfW and GIZ 02/12/2013 Page 18

19 NAMA Facility: Ambition criteria The NAMA Facility aims to support the most ambitious projects available (which meet the eligibility criteria) Transformational Change Potential Does the NAMA support project contribute to a transformation of the national or sectoral development towards a less carbon-intensive development path? Co-benefits Does the NAMA support project provide important additional development cobenefits beyond the reduction of GHG emissions? Financial Ambition Does the NAMA support project foresee or enable a substantial funding contribution from other sources? Mitigation Potential Does the NAMA support project foresee substantial direct and indirect GHG emission reductions? 02/12/2013 Page 19

20 Potential roles of international climate finance in NAMA implementation Support for developing policy and regulatory framework and capacity building Cover / contribute to incremental costs May be used to cover risks which national public budgets are not willing to take Flexible Potential way to introduce innovative approaches to financing 02/12/2013 Page 20

21 Example: Proposal for waste NAMA in the Philippines Slow implementation of law mandating conversion of open waste dumps Waste sector contributes to 11% of national GHG emissions Proposed NAMA would use international climate finance for Revolving fund providing concessional loans to waste management facilities Support for development of viable PPP schemes, identification of Best-Available Technologies, development of system for Monitoring, Reporting and Verification of GHG emission reductions, cooperation between EU and Philippine universities Source: Government of Philippines, /12/2013 Page 21

22 Conclusions NAMAs are still a relatively new international climate policy instrument NAMA development and implementation should be part of sectoral development strategies and budgeting International climate finance for NAMAs can provide additional financing which cannot be covered by private sector, national budgets or traditional development assistance 02/12/2013 Page 22

23 Thank you for your attention! Contact: Laura Würtenberger 02/12/2013 Page 23

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