Building blocks for successful PoAs and the possible role of Annex I governments

Transcription

1 Building blocks for successful PoAs and the possible role of Annex I governments Belgian ji / cdm programme Seminar: CDM Programme of Activities (PoA) in LDCs Brussels, 30 June 2011

2 Agenda 1. PoA Support Center Germany 2. Why PoAs in LDCs? 3. Building Blocks for PoA Success 4. Potential Roles for Annex I governments 2

3 PoA Support Center Germany A flagship initiative for PoAs Established October 2008 on behalf of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) Objective: Disseminate PoA-know-how in CDM/JI countries! Actions taken: Country workshops Help local stakeholders to identify PoA potential Develop concrete and realizable PoA proposals in partnership with potential PoA CME Advise on implementation and operation Grants for PIN and PDD development Advise on PoA funding and marketing of carbon credits Develop further tools and concepts for carbon markets PoA Blueprintbook with lessons learnt available at:

4 PoA Support Center Germany PoA Pipeline PoA Pipeline as of June projects Sector Region Operator (CE) Energy Efficiency in Buildings Poland, Estonia, Israel Banks + Public Supply Company Energy Efficiency in SMEs Household Stoves Biogas Poland, India Nepal, Nigeria, Mexico China, India Banks NGO, Banks Public Institutions Renewable Energy (Solar Water Heater / Mini Hydro) South Africa, Central America, Philippines, Nepal Vietnam, East Africa Banks Private companies 4

5 Agenda 1. PoA Support Center Germany 2. Why PoAs in LDCs? 3. Building Blocks for PoA Success 4. Potential Roles for Annex I governments 5

6 Why PoA s in LDCs? Reaching untapped areas Industry large scale Small Hydro CH4: Animal waste / WW / landfill Cookstove Mini- Hydro SWH CFLs E X A M P L E S Figueres / ESMAP

7 Why PoAs in LDCs? Relevance for low income countries PoA brings projects to regions which are underrepresented by classic CDM! % comparison of regional distribution of pcdm and CDM 90% 80% 81% Number Crunching 70% 60% 61% 30% PoAs vs 73% CDM in BIC (Brazil, India, China) 50% 40% 30% 20% 10% 0% 16% 15% 0% 1,0% Latin America Asia & Pacific Europe & Central Asia pcdm CDM 22% Africa 2,6% 1% 1,1% Middle East 11% PoAs vs 1.7% CDM in LDCs! 92 PoAs in UN Pipeline 8 PoAs registered Source: UNEP Risoe CDM/JI Source: Worldbank

8 Why PoAs in LDCs? Experience so far Very few registered CDM projects in LDCs Only about 50,000 CERs issued in total Reasons: Small economic potential and high risks Low CDM capacity / knowledge of Implementing Agencies Lack of experience at national (DNA) level leads to long processes Few project developers / CDM consultants based in LDCs Lack of Finance However: Situation is improving EU-ETS regulation makes LDCs attractive for compliance buyers Development Impact of CDM is generally bigger than in other countries 8

9 Agenda 1. PoA Support Center Germany 2. Why PoAs in LDCs? 3. Building Blocks for PoA Success 4. Potential Roles for Annex I governments 9

10 Building Blocks for PoA Success Rules Finance Scale Capacity 10

11 Building Blocks for PoA Success Rules & Finance Rules Currently too complicated Major hurdles: DOE liability, Additionality testing / sampling We need more simplifications (e.g. standardized baselines, deemed davings, positive lists etc.) Progress: Simplified additionality for micro scale projects in LDCs Finance True Carbon Finance is not yet existing! Carbon payments currently on ex post basis Most PoAs require seed funding to pre finance incentives (e.g. subsidies for equipment; low cost CFLs) Transform ex post Carbon Finance into ex ante Carbon Finance Key Question: How to make future CERs bankable? 11

12 Building Blocks for PoA Success Capacity & Scale Capacity CME function is new to most entities Apart from sector know how, CDM know-how and financial strength on a long term basis is required (PoA up to 28 years) Support measures for capacity building are needed particularly in LDCs Scale in LDCs: scale up PoAs to achieve critical mass in non-ldcs PoAs may lose their major market (EU ETS) how could PoAs serve as a basis for new market mechanisms? 12

13 Agenda 1. PoA Support Center Germany 2. Why PoAs in LDCs? 3. Building Blocks for PoA Success 4. Potential Roles for Annex I governments 13

14 Potential Roles for Annex I Governments Some Ideas Support PDD, Methodology, Baseline Development Rules Capacity PoA Design Facility; Support Seed & Project Finance Capacity Finance Foundations; Grant Funds; Structured Funds; guarantees Support CME / DNA Capacity Building Strategic Purchase Programme with TA, Finance and Key Partners Capacity CME Support Facility; Consultant assignments; expert secondmendts Rules Capacity Finance Scale Organize key stakeholders to implement PoAs from scratch! (CME, DNA, Financiers, Advisors, Technology Providers) 14

15 Conclusions and Recommendations PoA in LDC makes a lot of sense! Successful PoA implementation is hard work and needs a lot of expertise CDM reform steps and EU-ETS rules bare new chances for CDM in LDCs Success of PoA in LDC will often depend on public support Annex I governments can play a key role in providing well selected support However, PoA in LDC is no one size fits all! Stand alone projects are also important. New market mechanisms for non LDC countries necessary. 15

16 Thank you for your attention! Contact: Florian Sekinger Head of Division Competence Center for Carbon Credits KfW Carbon Fund KfW Bankengruppe Palmengartenstraße 5-9 D Frankfurt Tel.: