The Role of Carbon Pricing. in Côte d Ivoire s. Climate Change Policy. PMR Partnership Assembly Wednesday, October, 26, 2017 Tokyo, Japan

Transcription

1 The Role of Carbon Pricing in Côte d Ivoire s Climate Change Policy PMR Partnership Assembly Wednesday, October, 26, 2017 Tokyo, Japan Rachel BOTI-DOUAYOUA CDM-DNA Coordinator Ministry of Environment, Côte d Ivoire

2 Facts & Figures West african country Official language: French Area: sq km (about 2x California) Population: 24 million (54 th worldwide) GDP (nominal, 2017 estimate): 36.9 billion USD total 1,477 USD per capita Share of agriculture in GDP: 24% World s largest producer of cocoa Access to electricity: 56% of households

3 Greenhouse gas emissions Power generation, transport, agriculture and waste as main emitters GHG emissions reduction target of -28% by 2030 under the Paris Agreement (unconditional) Renewable energy target of 42% in power mix Currently two coal-fired power plants of 350 MW each in planning

4 National motivation and benefits sought Going beyond the traditional CDM approach and providing potential new (and more stable and predictable) resources for low-carbon project developers Mobilizing new resources to fund renewable and low carbon activities, including to benefit industrial and commercial entities to support less carbon-intensive activities and technologies Contributing to achieve the NDC objectives by reducing emissions at home in a costefficient way

5 Regulatory basis Polluter-pays principle Côte d'ivoire adopts Decree No of 24 October 2012 setting the detailed rules for the application of the polluter-pays principle as defined by Act No of 03 October 1996, Environment 2015 INDC (before PA) Côte d'ivoire states in its report on its INDC (now NDC) its clear intent to "explore the opportunity of setting up a carbon market and a carbon price at the national level" Paris Agreement Côte d'ivoire endorses the Paris Agreement and its decisions which encourage amongst others "incentives for the implementation of emission reduction activities, including tools such as national policies and carbon pricing (Decision 1 / CP21 para 136)

6 Steps already taken in CPLC High-Level Assembly Washington D.C. in April 2016 Brainstorming workshop, November 2015 Accession to the Carbon Pricing Leadership Coalition (CPLC) and Prime Minister s intervention in CPLC High-Level Assembly, April 2016 Self-funded feasibility study on national carbon price September-October 2016 Validation workshop of this study, December 2016 Validation workshop in Abidjan in December 2016

7 Steps already taken in 2017 Prime Minister s intervention at the CPLC High-Level Assembly, April 2017 Preliminary stakeholder consultations, March-July 2017 Ministerial participation in Africa Carbon Forum, June 2017 Stocktaking workshop, September 2017 Participation in the African Consultative Expert Dialogue on Carbon Pricing, October 2017 Expression of interest to the PMR, October 2017 Co-founder of the West African Alliance on Carbon Markets and Climate Finance, November 2017 (to be announced at COP23) - upcoming High-Level Session at Africa Carbon Forum in Cotonou in June 2017 CPLC High-Level Assembly in Washington D.C. in April 2017

8 Carbon pricing approach (1) National carbon price which maximizes development benefits High-Level Session at Africa Carbon Forum in Cotonou in June 2017 Based on previous feasibility study: Policy instrument Carbon tax (in the medium term) possibly ETS (in the long term, subject to common approach at regional level) Côte d Ivoire s NDC, p.1: Explicit strong willingness to reduce the country s carbon footprint while privileging mitigation policy options which can lead to important development co-benefits

9 Carbon pricing approach (2) Brainstorming workshop in Abidjan in November/December 2016 African Consultative Expert Dialogue in Nairobi in October 2017 Sector coverage: Energy including transport sectors Considerations to also include forestry Tax base: Energy including transport sectors: based on the consumption of any petroleum-related products such as natural gas, gas, diesel or heavy fuel Forestry sector: based on the sale of exported wood, fire wood or charcoal Tax rate: CFA (USD 1.67) in a low-case scenario and CFA 2, 500 (USD 4.17) in high-case scenario Rates have been suggested based on a review of carbon prices in other jurisdictions worldwide and on a subjective estimate of psychologically acceptable price for consumers Application level: Plan to apply the tax upstream in the value chain

10 Carbon pricing approach (3) Revenues estimates: GHG emissions avoided annually (MtCO2e) Annual revenues if carbon tax is CFA/tCO2e (in bn FCFA) [in USD] Annual revenues if carbon tax is CFA/tCO2 (in bn FCFA) [in USD] Tax on petroleum products [20 m] 27.7 [50 m] Tax on wood products [850 m] 1,206 [2,150 m] Self-funded feasibility study from December 2016 Total [900 m] 1,233.7 [2,200 m]

11 Activities planned (1) ACTIVITY 1: Defining the policy objectives of a carbon tax given the national circumstances TASK 1.1 Organization of an inter-ministry dialogue TASK 1.2 Consultations with private sector TASK 1.3 Integration into international carbon pricing support initiatives ACTIVITY 2: Analyzing the performance and impacts of the carbon tax TASK 2.1 Mapping of existing related policies to identify potential synergies/adjustments needed TASK 2.2 Definition of scenarios for modeling analysis TASK 2.3 Assessment of the fiscal policy consequences and macroeconomic stability TASK 2.4: Quantification of co-benefits

12 Activities planned (2) ACTIVITY 3: Designing the main elements of a carbon tax TASK 3.1 Optimization of the performance of the carbon tax (determination of optimal options for tax base and tax rates) TASK 3.2 Analysis of unwanted effects TASK 3.3 Discussion on the use of revenues TASK 3.4 Examination of the institutional setup for oversight/compliance TASK 3.5 Assessment of impacts on prices in regional power pools TASK 3.6 Exploration of regional and international cooperation potential ACTIVITY 4: Selecting the final carbon tax design and preparing its implementation TASK 4.1 Discussion of results with key stakeholders TASK 4.2 Selection of the final carbon tax design TASK 4.3 Preparation of an implementation plan TASK 4.4 Development of legal documents TASK 4.5. Capacity building for domestic public technical staff on implementation, operation, and enforcement

13 Timeline and Budget PMR resources USD k Potential opportunities for co-funding CPLC - USD 100k (TBC), e.g. analysis distributional impacts, analysis power pools UNFCCC - USD 80k (TBC), e.g. analysis regional approach January April 2018 May April 2019 March June 2018 July December 2019 ACTIVITY 1: Defining the policy objectives of a carbon tax given the national circumstances ACTIVITY 2: Analyzing the performance and impacts of the carbon tax ACTIVITY 3: Designing the main elements of a carbon tax ACTIVITY 4: Selecting the final carbon tax design and preparing its implementation

14 Challenges identified High-level political support Technical assistance Financial support Inclusive process for all stakeholders Strong support from the Prime Minister s Office Some support from UNFCCC, BOAD and CPLC, but more expertise/experience required Very limited resources available domestically Consultations well started, but to be extended and deepened

15 Working with the PMR Peer exchange Technical assistance Financial support Pioneer role and insights into carbon pricing potential in low-income countries Leadership in subsharan Africa