Institute for Global Environmental Strategies Towards sustainable development - policy oriented, practical and strategic research on global environmental issues Readiness for Market Mechanism in Myanmar 13 November 2012 Nay Pyi Taw, Myanmar Green Economy Green Growth-Myanmar Kazuhisa KOAKUTSU Deputy Director, Market Mechanism Group Institute for Global Environmental Strategies (IGES)
Market Mechanism (CDM) Has Contributed to Low Carbon and Green Development 4000 3500 3000 2500 2000 1500 1000 3390 Figure: Number of Total Registered CDM s 4,915 CDM s Registered 110,000 MW Capacity Installed Mostly Renewable energy USD 215 Billion Investment 816 500 0 Renewable energy (Hydro, Wind, Biomass, Solar, Tidal, Waste Management (LFG, Compost, etc) 255 Waste gas utilization (Cement, Steel Plant) 137 114 203 Energy Efficiency (Commercial & household, Factory, Power Generation) Industrial gas (HFCs, N2O, SF6, PFCs) Others (transport, etc) Source: IGES CDM Database (as of 31, Oct. 2012), Spalding-Fecher et al (2012) 2
Market Mechanism (CDM) is Offering Various Investment Opportunities for LDCs Figure: Share and Types of Registered CDM s In LDCs Cement (energy efficiency): Ethiopia, 1 Waste gas/heat utilization: Lao PDR (cement plant), 1 Hydro power: Uganda, Lao PDR, Madagascar, Bhutan, 13 Total of 49 s Afforestation & reforestation: Uganda, Senegal, Ethiopia, 9 Biogas: Cambodia, Nepal, 8 Source: IGES CDM Database (as of 31, Oct. 2012) Wind power: Senegal (150MW), PV 1 (Solar): Rwanda, 2 Biomass power and heat: Senegal, 3 Energy efficiency: Senegal, Bangladesh, Nepal, Rwanda, Lao PDR, 5 Landfill gas, compost: Uganda, Congo, Bangladesh, 6 3
Various mechanisms can channel variety of investment opportunities for Low Carbon and Green Development Mechanisms under Kyoto Protocol Bilateral, domestic and voluntary Regional, national, sub-national trading scheme CDM JI Bilateral/ Joint credit mechanism (BOCM/JCM) Emission Trading A IET Mechanism under COP Domestic offset scheme (VER) Emission Trading B Source: Author New Market Mechanism VCS, Gold standard Emission Trading C 4
Bilateral (Joint) Mechanism to Provide Investment in Low Carbon Technology Partner Country Joint Agreement Joint Committee Japan Technology/Knowhow/Investment Emission Reduction Credit Third Party Entity Source: Ministry of Environment Japan (2012) 5
Any Mechanisms have common process and similar standards Prepare project design document (PDD) Approval from Government involved Validation Registration Monitoring Verification and certification Issuance of Credit 6
4 Important Steps for the Market Mechanism to be Fully Functional; All the Steps are Required!! Step 4 Step 3 Domestic Market Mechanisms Step 2 Management Management Step 1 Database/ Facilitation Database/ Facilitation Database/ Facilitation Approval Approval Approval Approval Source: Author 7
Step by Step Approach is Required, but International Experience Could Support Institutional setting ( Approval) Approval rules, procedures and time Relevant laws and regulations Database/ Facilitation relevant data (emission factor) Web publishing, conference Management monitoring data and system Fund scheme, certification scheme Domestic Market Mechanisms Design own scheme and objectives Verified emission reduction (VER), Emission Trading System (ETS) Source: Author - Wealth of Experience from the countries participating to the CDM - Grid Emission Factor - Standardized baselines - DNA Website - Programme CDM Management - Monitoring & Reporting - MRV methodology - Link with Nationally Appropriate Mitigation Actions (NAMAs) 8
How to Move Forward In Myanmar To establish efficient regulatory structure with clear rules and timelines for project approval to facilitate private initiative is the first step forward (Step 1) To make the most frequently used datasets (i.e. emission factors from the grid power) available could make the process streamlined (Step 2) Ultimately, country can own and operate their market mechanisms reflecting national and local circumstances (Step 3 and 4) Start from the international scheme (CDM) with the wealth of experience and knowledge accumulated for the effective operation of the market mechanism. 9
Proposed Milestone for Promoting Market Readiness in Myanmar Year 1 Year 2 Year 3 Step 1. Institutional setting Step 2. Database/ Facilitation Step 3. Management Step 4. Domestic Market Mechanisms 10