Analysis of demand for and usage of methodologies developed top-down

Transcription

1 (a) Analysis of demand for and usage of methodologies developed top-down CDM EB 91 Bonn, Germany, 13 to 17 September 2016 UNFCCC Secretariat SDM programme

2 Procedural background EB 90 requested the secretariat to prepare an information note containing an analysis of the demand for, and usage of, methodologies developed top-down, specifically including the analysis of the frequency with which different top-down methodologies are utilized by project activities and PoAs. 2

3 Purpose The purpose of this document is to present the analysis and findings of the demand for, and usage of, methodologies developed top-down 3

4 Analysis Key Features: CMP mandates received over the years related to top down work on methodologies (Demand) Data analysis on the usage of methodologies developed bottom-up and top-down (Usage) Comparative data on the cost to develop bottom-up methodologies vs topdown (Demand) Dedicated stakeholder survey (Demand) Literature review on the value of methodologies developed top-down (Demand and Usage) 4

5 Analysis ( Categorization of methodologies and their share) Majority of SSC meths developed top-down Majority of LSC meths developed bottom-up Methodology Category Large Scale (AMs/ACMs) Small Scale (AMSs) Total Methodologies Bottom up 114 (80%) 34 (36%) Top Down 5 (4%) 54 (57%) Consolidated/Hybrid (bottom-up/top down) 23 (16% ) 7 (7%) 5

6 Analysis ( Usage of methodologies) Proportion of the top-down /hybrid methodology used in average by projects/poas is substantially higher as compared to bottom-up Meth Category Number of meths available Number of meths used Large scale Projects Number of PAs/PoAs registered Average project per methodologyused Average project per methodology available Bottomup Topdown Hybrid Bottomup Small Scale Sale Projects Top-down Hybrid

7 Analysis (evolution of projects/poas vs application of meths) The application of top-down and hybrid methodologies has been predominant, irrespective of the market factors (e.g. post-2012). 7

8 Analysis (Use of topdown meth in PA vs PoAs) Application of topdown/hybrid meths predominant in PAs and even more in PoAs Only PoAs Only Projects 8

9 Analysis (share of top-down, hybrid and bottom-up methodologies) Proportion of the application of top-down/hybrid methodologies accounting for >90 % of the projects/poas since

10 Analysis: Distribution of projects in LDCs and category of methodology applied LDC % Share Total %Share AR 16 7% 73 1% Bottom-up 11 5% 622 7% Hybrid 61 27% 4,464 50% Top-down % 3,705 42% Total % 8, % > 60 % of PAs/PoAs in LDCs have applied top-down developed methodologies (mostly small-scale), while few bottom-up methodologies have been applied Top down methodologies the main stay for PoAs in LDCs 10

11 Analysis (Distribution of registered PAs/PoAs by region, applying small-scale or micro-scale additionality tool for automatic additionality) Registered Regular Region Projects Registered PoAs Africa 17 (5.4%) 55 (36.7%) Americas 18 (5.7%) 18 (12%) Asia 278 (87.7%) 75 (50%) Europe 3(0.9%) - Oceania 1 (0.3%) 2 (1.3%) Total Among 3083 registered small-scale CDM projects and 235 PoAs, 317 project activities and 150 have applied small-scale or micro-scale additionality tool (developed top own) for automatic additionality. 11

12 Survey Results on the value addition of top-down methodologies 59 completed surveys were received (out of 297) with an overall positive response: a) ~ 80 % of respondents believe that the absence of applicable meths or SBL is a barrier to the development of PAs/PoAs; b) ~ 14 % of respondents believe that PPs have the capability to develop suitable meths or SBLs on their own; c) ~ 90% of respondents believe that the top-down development of meths makes it easier to develop PAs/ PoAs for sectors or project types where meths or SBL do not currently exist; and d) ~ 86% of respondents believe that the top-down development of meths or SBL helps increase the development of PA/ PoAs in countries with low capability. 12

13 Survey Results on the value addition of top-down methodologies Respondents also indicated that: The top-down development of standardized approaches can greatly reduce TCs and contribute to scaled-up mitigation efforts; bottom-up methodologies are often too specific, applicable to a very small number of cases, require specific skills and expertisepiecemeal approach to mitigation; Limited funding to support the development of bottom-up SBLs, it would be prudent to scale up the support from the EB for topdown development of SBLs More guidance should be developed in navigating the right choice of methodology/sbl for a given mitigation activity The processing time to develop top-down methodologies needs to be reduced; 13

14 Literature Review on the value addition of top-down methodologies Top down meths taking into account suppressed demand, establishing positive list for additionality and allowing the use of SBL facilitate implementation of energy access projects and contribute to improved geographical distribution of the CDM; The limitations of the bottom-up approach, though providing flexibility and opportunities for meths of all types of projects to be considered, results in fewer general and broadly accessible meths; Defending broader meths as compared to more narrowly defined meths may take more time and therefore lead to higher costs (e.g. USD 125,000 per methodology). Top down meths in new areas may be able to consolidate the learning by doing in order to enhance predictability and efficiency as well as unleash a new path for a different type of PA/PoA to access to carbon finance; Other offset schemes (e.g. in Australia, Canada and the USA) make wide use of standardized approaches developed top-down 14

15 Cost of top-down and bottom-up methodologies Developing the top-down CDM methodology is more cost-effective Cost of developing Bottom-up CDM methodology (Literature ) Cost of developing Topdown CDM methodology Approximately USD 125,000 a Approximately USD 17,432- Euro ,000 b USD 50, ,000 c 35,000 a: World Bank, 2010 b: Michaelowa, 2012 c: Asian Development Bank,

16 Key Findings Top-down meths have been frequently and predominantly applied for PoAs, in underdeveloped regions and LDCs contributing to enhanced regional distribution; The demand for top-down development of methodologies is high, particularly from countries with low capability; The usage of top-down methodologies, particularly SSC is much higher than the usage of bottom- up methodologies, particularly in countries with low capability; Top-down methodologies have also significantly contributed to expand the reach of the CDM in new mitigation areas and to the uptake of PoAs The CMP has consistently emphasized the development of topdown methodologies as one of the critical elements in achieving regional distribution 16

17 Recommendations to the Board The secretariat recommends that the Board take note of the information contained in this document, and may wish to provide further guidance 17