Download Doing Business while Mitigating Climate Change

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Doing Business
while
Mitigating Climate
Change
Moekti H. Soejachmoen -Yayasan Pelangi Indonesia
Jakarta, 25 January 2006
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Structure of presentation
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Climate change – what is it
Causes of climate change
Impacts of climate change – in Indonesia?
Tackling climate change globally –
UNFCCC
More actions – the Kyoto Protocol
Clean Development Mechanisms
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WHAT IS CLIMATE
CHANGE?
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CAUSES
OF
CLIMATE CHANGE
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Natural Causes of Climate Change
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Volcanoes eruption
Forest fire
Respiration process – O2  CO2
Organic decomposition – CH4
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Anthropogenic Causes
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Fossil fuel combustion
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Industrial process
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Electricity & power generation
Transportation
Cement industries
Hydrocarbon based industries
Non-energy activities:
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Agriculture, farming & husbandry
Waste disposal – municipal waste
Deforestation & land clearing
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IMPACTS
OF
CLIMATE CHANGE
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Diseases outbreak at El-Nino 1997/98
(WHO)
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Annual Rainfall (A) 1931-1960 and (B) 1961-1990
(Source: Kaimudin, 2000)
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Predicted Impacts
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Shifting of seasons – length and characteristics as
well as period and duration
Changing of precipitation – strength, length and
characteristics
Extreme weather – stormy weather, typhoon,
extreme drought
Desertification – especially for arid area
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Predicted Impacts
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Melting of ice (cryosphere) – not only polar ice but
also other ice-caps
Sea level rise – small and flat islands
Tropical diseases – malaria, dengue
Degradation of biodiversity – coral reef, fishes
Food (in-)security – failed harvesting
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Impacts in Indonesia
In Indonesia, based on studies (1994, 1998):
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Sea level rise – most coastal zone especially in
northern Java; eastern Sumatera; southern, eastern
& western Kalimantan; western Sulawesi; swamp
area in western and southern of Papua.
Impacts will be:
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Relocation of coastal population
Loss of land
Infrastructure and communication damages
Special case for Jakarta – already sinking due to draining
of groundwater table, soil compression because of heavy
construction. The sea level has risen 4.5 mm annually due
to tectonic movements
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Agriculture – as impact of drought, flooding and
shift of precipitation pattern:
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Deterioration of soil quality
Soil erosion/land slides
Abrupt changes in water supplies
Declining of agricultural products
Coastal zone:
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Sea water warming (0.2-2.5C)
Coral bleaching
Diminishing of productivity of marine resources
Migration of marine species
Marine-based tourism will be affected heavily
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Human health – increase of diseases
incidence:
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Malaria – due to changes in mosquito breeding
habitat and changes in incubation period
Dengue fever – (similar case as malaria)
Cholera & diarrhea – due to contamination of
water supply by flooding
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TACKLING
CLIMATE CHANGE
GLOBALLY
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End of
1980s
World Meteorological Organization
(WMO) observed changes of world
climate and meteorology
1988
Intergovernmental Panel on Climate
Change (IPCC) was established by WMO
and UNEP
1991
Intergovernmental Negotiating Committee
(INC) was established by UNGA
1992
Earth Summit in Rio de Janeiro: The
UNFCCC was signed
1994
UNFCCC has entered into force
1995
1st Session of the Conference of the Parties
(COP-1) to the UNFCCC
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1997
Kyoto Protocol was adopted
2005
Kyoto Protocol has entered into force
2005
11th Session of the Conference of the Parties
to the UNFCCC, Serving as the 1st Meeting
of the Parties to the Kyoto Protocol (COP11/MOP-1)
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United Nations Framework
Convention on Climate
Change [UNFCCC]
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The Ultimate Objective
… is to achieve, in accordance with the relevant
provisions of the Convention, stabilization of
greenhouse gas concentrations in the atmosphere
at a level that would prevent dangerous
anthropogenic interference with the climate
system.
Such a level should be achieved within a time-frame
sufficient to allow ecosystems to adapt naturally
to climate change, to ensure that food production
is not threatened and to enable economic
development to proceed in a sustainable manner.
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Parties under the UNFCCC
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Annex I Countries – industrialized and
countries with economy in transition.
Commit to limit and to reduce their GHG
emissions.
Non-Annex 1 Countries (Developing
Countries) – voluntarily limiting and
reducing their GHG emissions while
developing the countries in a sustainable
manner.
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Entered into force in 1994 after ratified by
50 countries
Number of ratifying countries: 189
COP-1 to COP-10:
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Berlin Mandate (COP-1)
Kyoto Protocol (COP-3)
Buenos Aires Plan of Actions (COP-4)
Deadlocked (COP-6)  COP-6bis
Marrakech Accord (COP-7)
The Delhi Ministerial Declaration on Climate
Change and Sustainable Development (COP-8)
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KYOTO PROTOCOL
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The Target of Kyoto Protocol
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The Parties included in Annex I shall, individually
or jointly, ensure that their aggregate
anthropogenic carbon dioxide equivalent
emissions of the greenhouse gases listed in Annex
A do not exceed their assigned amounts,
calculated pursuant to their quantified emission
limitation and reduction commitments inscribed
in Annex B and in accordance with the
provisions of this Article, with a view to
reducing their overall emissions of such gases by
at least 5 per cent below 1990 levels in the
commitment period 2008 to 2012.
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Flexibility Mechanisms
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To assist Annex I to fulfill their
commitment
Between Annex I:
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Joint Implementation
Emission Trading
With Non-Annex I:
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Clean Development Mechanism
However, Annex I has to undertake
‘Domestic Action’
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Entered into force: 16 Februari 2005 after
ratified by 141 countries
Ratifying countries: 156
1st Meeting of the Parties to the KP during
the 11th COP to the UNFCCC in Montreal,
end of 2005
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CLEAN DEVELOPMENT
MECHANISMS
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Objectives of the CDM
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To assist developing countries to support
sustainable development and to
contribute to the objective of the
UNFCCC;
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To assist industrialized countries to fulfill
their emissions limitation and reduction
commitments;
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How does CDM work?
Emissions
Reduction
Industrialized
countries
Developing
countries
Targeted
Emissions
Reduction
Certified
Emissions
Reduction
(CERs)
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Buyers
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Governments – Annex I: Netherlands,
Denmark, Canada, Austria, etc.
Commercial funds – Natsource,
EcoSecurities, etc.
Public private funds – World Bank CF, KfW
CF, Japanese CF, etc.
Large companies – Shell, Mitsui, etc.
Traders – RWE Trading, Shell Trading, etc.
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Sellers – CDM Developers
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Consultants and developers – DPSolusi,
PEACE, etc.
Technology providers
Utilities
Large industries – Indocement
Municipalities
Companies
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Institutional setting of CDM
Conference of the
Parties serving as
Meeting of the Parties
(COP/MOP)
Secretariat
(Accredited)
Operational
Entities:
Verification
Countries / Parties
CDM Executive
Board
(Accredited)
Operational
Entities:
Validation
Designated
National Authority
(DNA)
Project Proponents
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CDM Executive Board
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Members:
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Representing:
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10 members
10 alternate members
Annex I countries
Non- Annex I countries
5 UN region
SIDs (small islands developing states)
Supported by:
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CDM Secretariat
CDM Methodologies Panel
CDM Accreditation Panel
CDM Afforestation and Reforestation Working Group
CDM Small-Scale Projects Working Group
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Designated Operational Entity (DOE)
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Validate the proposed CDM project activities
Verify and certify the reduction of GHGs
Complies with host country laws
Demonstrate that has no potential conflict of
interest
Maintain publicly available list of CDM it works
on
Submit annual report to EB
Make information from CDM project
participants publicly available
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Designated Operational Entity (DOE)
Up to 24 January 2006:
 12 OEs accredited and provisionally designated
for validation
 3 OEs (of those 12) also accredited for
verification and certification
 24 Accredited Entities with indicative letter
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Sectors under CDM*
Sectoral Scope
Approved methodologies
1.
Energy industries (renewable/nonrenewable sources)
Large scale, small scale,
consolidated
2.
Energy distribution
Small scale
3.
Energy demand
Large scale, small scale
4.
Manufacturing industries
Large scale, small scale,
consolidated
5.
Chemical industries
Large scale
6.
Construction
-none-
7.
Transport
Small scale
8.
Mining/mineral production
Consolidated
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Sectors under CDM*
Sectoral Scope
Approved
methodologies
9.
Metal production
-none-
10.
Fugitive emissions from fuels (solid, oil
and gas)
Large scale, small
scale, consolidated
11.
Fugitive emissions from production and
consumption of halocarbons and sulphur
hexafluoride
Large scale
12.
Solvent use
-none-
13.
Waste handling and disposal
Large scale, small
scale, consolidated
14.
Afforestation and reforestation
Large scale
15.
Agriculture
Large scale, small
scale
* As per 24 January 2006
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2
Methodological
approval
1
Feasibility & Due
Diligence
2
Documentation
3
Public consultation
5
Approval by
National Authority
4
Validation by
Operational Entity
6
Registration by
Executive Board
7
Implementation &
Monitoring
8
Verification &
Certification by OE
9
Issuance of CERs by
EB
10
Transaction of CERs
Steps to develop a CDM
project
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Methodology
To define baseline and/or monitoring methods
Up to 24 January 2006:
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25 methodologies for large scale projects
14 simplified small scale methodologies
8 consolidated methodologies
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Additionality
To show that the proposed CDM project will
reduce the GHG emissions compared to the
baseline – to ensure that the proposed
project is not (part of) the baseline scenario
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Validation
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The process of independent evaluation of
the project activity by a Designated
Operational Entity:
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Requirement of CDM
Annexes and relevant decision of COP/MOP
Based on Project Design Document
Up to 24 January 2006: 84 project
activities are open for public comments
under validation process
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Host Country Approval
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Host country Designated National Authority to
endorse and approve the CDM project:
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The project is voluntary
Support achievement of the national sustainable
development goal
The letter of approval to be attached to the PDD
for registration to the EB
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Registration
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The formal acceptance of by the Executive
Board of a validated project as a CDM project
activity
Is a prerequisite for the verification, certification
and issuance of CERs
Up to 24 January 2006:
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77 project activities are registered
62 project activities are submitted for registration
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Project Implementation and
Monitoring
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Implementation of CDM projects after
registration – some projects can start before
the registration
Monitoring of project performance in
reducing GHG emissions – based on the
Monitoring Plan
Up to 24 January 2006: 9 projects have
published their monitoring report
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Certification/Verification of CDM
project
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Verification is the periodic independent review
and ex post determination by the DOE of the
monitored reductions during the verification
period
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Verification of CDM project activity based on the
monitoring report
Verification report will be submitted by the Designated
Operational Entity to the CDM-EB
Certification is the written assurance by the DOE
that, during a specified time period, a project
activity achieved the reductions as verified.
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Issuance & Transaction of CERs
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The certification report shall constitute a request
for issuance to the CDM-EB of CERs equal to the
verified amount
Up to 24 January 2006:
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5 project activities (issued) – 646,561 CERs
2 project activities (request for issuance) – 1,674,763
CERs
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Price of CERs
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Risks:
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Project risks
Project partner risks
Registration risks
Delivery risks
Transfer and issuance risks
Co-benefits:
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Social benefit
Environmental benefit
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THANK YOU
Pelangi
Jalan Pangeran Antasari 10
Kebayoran Baru, Jakarta 12150
Indonesia
Tel: +62 (21) 7280-1172
Fax: +62 (21) 7280-1174
www.pelangi.or.id
[email protected]
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