Download The National Climate Change Programme (NCCP), a unit within the

AV/2.10.02
MISSION REPORT
Dates:
29 August – 13 September 2002
Countries:
Bolivia, Ecuador, Guatemala
Project:
Capacity Development for CDM
Mission team: A. Villavicencio (UCC), Daniel Bouille and Osvaldo Girardin
(Bariloche Foundation - FB)
Objectives:
i) Work with national senior counterpart officials to define the
institutional frame for the CDM project and designate the agency
responsible for the project implementation.
ii) Define a workplan for the preparatory phase of the CDM project
(September – December 2002).
iii) Establish the criteria and guidelines for project activities in the year
2003 and identify a broad set of activities for years 2004/05.
iv) Identify technical assistance requirements and interventions from
UCC / FB.
Main findings and conclusions:
A summary of CDM institutional issues, ongoing CDM-related activities, and the
status of the project implementation in the three countries is presented in the next
sections. The following pharagraphs highlight some of the main topics addressed
during the meetigs held with local authorities.

Bolivia and Ecuador have already established bureaucratic structures to deal
with CDM issues. They vary mainly in the legal structure and responsibilities
with which they are entrusted. While in Bolivia, a fully governmental
organisation has been established to deal with both the regulation and
promotion of CDM projects, in Ecuador these functions have been assigned to
different entities: the Climate Change Unit under the Ministry for
Environment and CORDELIM, a semi-public organisation dedicated to the
promotion, capacity building and technical support to CDM projects.
Guatemala is in the process of defining an institutional structure for the CDM.
It is likely that CDM structure will result in an institutional arrangement inbetween of the corresponding entities in Bolivia and Ecuador: an independent
institution with public and private participation.

Discussions held in the three countries highlighted the need of maintaining
CDM focal points as minimals structures focused on a managable set of shortterm objectives. As these strucutures gain momentum, the consolidation of
1
more stable organisations will emerge as result of the accumulated experience
and the codification of rules and procedures. This strategy will also allow for
gradually accomodating local structures to the evolving rules and modalities of
the CDM.

The long-term viability of CDM offices was an important topic addressed
during the discussions with local authorities. It is expected that government
support together with revenues from levies on CDM projects will in the longterm cover the administrative costs of CDM focal points. However, public
funding constraints as well as the uncertainties affecting the carbon market
limit the sources of funding CDM entitites. A temporary solution consists in
using the project resources allocated to local contracts to partially support the
functioning of the CDM offices. In the first year (2003), up to 40 percent of
the total budget will be allocated to support both technical staff and
administrative costs. As the government support is expected to increase, this
porcentage will gradually decrease in the next two years.

It was stressed during the discussions the need of orienting the project
activities, at least in its initial stage, towards a dialogue and consultation
process aimed at achieving a supportive coalition for the national participation
in the CDM. This process is meant to serve several purposes: (i) a channel for
information dissemination; (ii) assess the policy and legal framework within
which CDM related activities are taking place; (iii) identify political trends
including ongoing reforms that will affect CDM projects; (iv) uncover
informal rules and norms that shape institutional links and relationships.
Additionally, the process of dialogue and consultation will provide the
capacity development with a strong sense of project ownership. Project
stakeholders will perceive the assumptions and nature of the ‘problems to be
solved’, the means to be employed, and the degree of innovation required not
as being externally imposed but as the outcome of their participation and
consultation.

It was also recognised the existence of both overlaps and potential synergies
between the CDM project and other activities being undertaken in the contex
of ongoing or planned studies and projects, in particular with the national
strategy studies supported by the World Bank. Avoinding duplicative efforts
and exploiting potential synergies will be important criteria for defining
specific activities under the CDM project.

The issue on sustainable development attributes of CDM projects requires a
closer examination. There is a danger of paying too much attention to the
‘technicalities’ of CDM projects – a carbon centric attitude, without careful
assessment of the noncarbon impacts. If the CDM is to achieve its dual
objective, a comprehensive assessment of project noncarbon attributes must be
the focus of training and capacity building activities.
2
BOLIVIA
Institutional Arrangements

The National Climate Change Programme (NCCP), a unit within the Ministry
for Sustainable Development, is in charge of implementing technical
commitments under the UNFCCC.

The Interinstitutional Council on Climate Change (CICC) is an interministerial
committee established to formulate government climate change policy and
strategy.

The National Joint Implementation Programme (PRONIC) was established as
mixed institution with representatives from the private and public sector to
address the AIJ pilot phase. A technical unit was also designed to provide
technical support to the Programme on joint implementation. Actually, the
PRONIC has never been operational and with the creation of the Office for
CDM (see below) the idea of an independent unit to deal with CDM issues
has been abandoned.
Ongoing Activities

The NCCP is about to start the Second National Communication. Final
administrative arrangements with UNDP are going on and related activities are
expected to start off in the coming weeks.

The study on the National Strategy for the country participation in the CDM
has been accomplished under the World Bank National Strategy Studies
Programme. The study was undertaken by the NCCP.
CDM Institutional setup
Bolivia has decided not to proceed with the creation of an independent entity to deal
with the CDM, but rather to incorporate the functions into an existing government
agency. A unit, the Office for Clean Development (ODL), has been established within
the National Climate Change Programme. While the National Authority for the CDM
resides within the Vice-Ministry for Environment and Natural Resources, the ODL is
meant to provide technical support and advice on the regulation process for CDM
projects evaluation and approval.
The ODL is at the moment in the structuring phase. The unit is staffed by two
proffesionals full time assigned to defininig the ODL mandates as well as to
establishing rules and procedures for CDM project cycle management.
3
National Programme
for Joint Implementation
PRONIC
(Executive Board)
Ministry for
Sustainable
Development
Council on
Climate Change
ICCC
Vice- ministry
for Environment
And Nat. Res.
PRONIC
Technical Unit
National Climate
Change Programme
NCCP
Inventories and
Mitigation Unit
Vulnerability and
Adaptation Unit
Clean Development
Unit
ODL
Capacity Development for CDM
a)
Definition Phase

The contract for the execution of the Definition Phase of the project has been
signed with the Vice/ministry for Environment and Natural Resources. The
NCCP is the executing agency. Financial resources under the contract will
partially be allocated to support new ODL staff.

The UNDP Office in La Paz will manage the financial resources under the
contract.

A detailed working plan of the activities scheduled under the Definition Phase
of the CDM Project are summarised in the Annex A.

The national workshop is scheduled the 14 November.
b)
Working Plan for year 2003

Make operational the Office for Clean Development. This includes: i) define
the ODL mission and objectives; ii) establish links with the rest of units and
institutions involved in climate change policies and strategies; iii) attain broad
stakeholder participation in the ODL activities; and iv) secure financial and
non-financial resources.

Analysis of the legal framework for CDM project investments. This includes:
i) review of norms and procedures adopted by other Latin American countries
and that could be applied into the Bolivian context; ii) review of the national
legislation regarding foreign investment (remission of profits, tax incentives,
4
incentives for renewable energy projects, regulations and rules concerning
exploitation of natural resources, water in particular, import duties, power
sector reforms); and iii) assessment on how foreign investment rules could
affect (positively and negatively) CDM projects.

Establishment of the enabling regulatory frame for evaluating and approval of
CDM projects. This includes: i) develop national criteria and respective
information requirements to ensure a coherent, justifiable and transparent
assessment of CDM projects in accordance with the CDM Executive Board’s
decisions; ii) ensure the compliance of CDM projects with relevant policy and
regulatory national regimes; and iii) elaboration of guidelines and procedures
for project approval.

Formulate and start off a training programme.
c)
Project management

Through a MOU between the Vice-ministry for Environment and UCC, the
Ministry for Enviroment endorses the project execution to the National
Programme on Climate Change (PNCC).

The PNCC will coordinate execution of the project. The PNCC will act as a
local counterpart for project definition and management issues.

The Office for Clean Development under the PNCC will be the technical unit
for implementing the project activities.

The PNUD Office will administrate the resources allocated to local contracts.
5
ECUADOR
Institutional Arrangements

The National Committee on Climate Change (NCCC) is the national entity
encharged of climate change policy and strategy formulation. The NCCC,
chaired by the minister for environment and managed by the Meteorological
Institute, is an ad-hoc committee under the National Council for Sustainable
Develepment. It comprises representatives from the national government
(ministries for Foreign Affairs, Energy, and Africulture), the Entreprenurial
Association, and NGOs (acting as an umbrella group). The main role of the
NCCC is to harmonise climate change policies with the national development
objectives.

The Unit for Climate Change, a unit within the Ministry for Sustainable
Development, is in charge of implementing technical commitments under the
UNFCCC and the Kyoto Protocol. Main tasks of the unit are: i) prepare the
national communications; ii) coordinate the activities of the NCCC; and iii) act
as a technical unit for CDM isues.
National Council for
Sustainable Development
NCSD
National Committee
For Climate Change
NCCC
Ministry for
Environment
Unit for
Climate Change
CCU
Coordination with
NCCC
GGH Inventories
And National
Communication
MDL National
Authority
Ongoing Activities

The Ministry for Environment is finalising administrative arrangements with
the UNDP Office in Quito in order to start the elaboration of the Second
National Communication.

Preliminary talks are goin on between the Unit for Climate Change and World
Bank National Strategy Studies programme in order to undertake a national
strategy study in Ecuador. The study is expected to start off early next year.
6

A project on Institutional Support to the Corporation for the Clean
Development Mechanism – CORDELIM (see below) is in progress. The
project is supported by the Andean Corporation for Development – CAF under
its Latin American Carbon Programme. Activities under the project include: i)
the establishment of national information system on CDM; ii) one-week
training seminar conducted by the Andean Centre for CDM; iii) support to
CDM project formulation; and iv) elaboration of strategic planning studies to
support CDM activities. Total resources allocated to the project amounto to
US$ 67.000 and the project is expected to finalise early next year.

Four project information notes (PIN) have been summitted by private
investors to the Prototype Carbon Fund. The PINs are being considered by the
PCF.
CDM Institutional setup
In addition to the Unit for Climate Change at the Ministry for Environment, the
Corporation for Clean Development has been established with the main responsibility
of promotion, building capacity and, at the request of project developers, to provide
technical support to project development and formulation. According to this
institutional setting, regulation functions (evaluation and approval of projects) resides
on the Ministry for Environment (Climate Change Unit), while activities related to
dissemination of information, capacity building and project promotion have been
asigned to a separate institution. This separation of functions respond to the concern
of avoinding possible conflicts of interest in the process of project formulation and
approval.
CORDELIM is meant to work in close collaboration with the CCU in developing the
criteria required for project evaluation and approval. In the same line, CORDELIM
will provide CCU with technical support on the formulation of CDM related policies
and strategy. CORDELIM shares its Board of Directors with the National Committee
on Climate Change. At the moment CODELIM is staffed by one profesional
supported by the Ministry for Environment and full-time assigned to the CORDELIM.
Additional support to limited training and information dissemination is being
provided by the CAF within the context of the Latin American Carbon Programme.
Unit for Climate Change
CDM National Authority
CORDELIM
Project approval criteria:
• baselines
• sustainability
Promotion and
diffusion
CDM policy formulation
and strategy
Evaluation and
approval
Capacity
building
Monitoring
verification
7
Technical
support
Despite its short period of being operational, CORDELIM has managed to draw
attention from a relatively broad spectrum of stakeholders potentially involved in
CDM issues. CORDELIM has clearly defined its mission and objectives and
promising links with government units (CCU) and private sector are being developed.
At the moment the Ministry for Environment supports CORDELIM with basic
personnel and office facilities, however the long-term support and funding remains an
open question.
Capacity Development for CDM
a)
Definition Phase

It was agreed that no contract was necessary to undertake the activities
envisaged in the preparation phase. It was also agreed that the funds allocated
to this phase would be used to support the project activities expected in the
next year.

A detailed working plan of the activities scheduled under the Definition Phase
of the CDM Project are summarised in the Annex B.

The national workshop is scheduled to take place 27 November.

CORDELIM and the Climate Change Unit will host the first regional
workshop (28-29 November).
b)
Working Plan for year 2003
Given: i) the relatively degree of institutional consolidation for CDM issues; ii) the
local authorities’ commitment to support CDM activities; and iii) the private sector
interest on participating in CDM projects, the project activities in the next year will be
focused on the following tasks:

Facilitate the access to and dissemination of information through the
establishment of an information system on CDM related topics. The
information system is seeing as a crucial mechanism for promoting a broad
participation in the CDM. Since the rules and procedures for CDM are still
being negotiated, it is important to provide stakeholders with updated
information on the latest CDM developments. The information system will
include data on i) Executive Board rules and procedures for CDM; ii) internal
procedures for project evaluation and approval; iii) status of CDM projects
submitted for evaluation and approval; iv) potential CDM projects; v) roster of
local institutions and consultants; and vi) ongoing national activities on CDM.

Establishment of the enabling regulatory frame for evaluating and approval of
CDM projects. This includes: i) develop national criteria and respective
information requirements to ensure a coherent, justifiable and transparent
assessment of CDM projects in accordance with the CDM Executive Board’s
decisions; ii) ensure the compliance of CDM projects with relevant policy and
8
regulatory national regimes; and iii) elaboration of guidelines and procedures
for project approval.

c)
Analysis of the legal framework for CDM project investments. This includes:
i) review of norms and procedures adopted by other Latin American countries
and that could be applied into the Ecuadorian context; ii) review of the
national legislation regarding foreign investment (remission of profits, tax
incentives, incentives for renewable energy projects, regulations and rules
concerning exploitation of natural resources, water in particular, import duties,
power sector reforms); and iii) assessment on how foreign investment rules
could affect (positively and negatively) CDM projects.
Project management

Through a MOU between the Vice-ministry for Environment and UCC, the
Ministry for Enviroment endorses the project execution to the CORDELIM.

CORDELIM in close collaboration with the Climate Change Unit will be the
technical unit for coordinating and implementing the project. Therefore,
CORDELIM is the local counterpart in the execution of the project.

The Unit for Project Management (UPM) will manage the financial resources
of the project. UPM is an independent unit within the Ministry for
Environment established to administrate externally supported projects. The
unit has proved to be an effective mechanism for managing resources of a
number of projects, in particular the World Bank funded projects.
9
GUATEMALA
Institutional Arrangements

The Permanent Council for Climate Variability and Change (CVCC) is the
national entity encharged of climate change policy and strategy formulation.
The CVCC includes representatives from the national government (seven
ministries plus the Secretariat for Planning – SEGEPLAN, the National
Councel for Protected Areas and the Institute for Forestry), the Entreprenurial
Associations, and the academic sector. The main objective of the CVCC is to
formulate policies and strategies to reduce the country’s vulnerability to
climate change. The Council is supported by a technical unit.

The National Climate Change Programme (NCCP), a unit within the Ministry
for Environment and Natural Resources, is in charge of implementing
technical commitments under the UNFCCC.

The National Comission for Joint Implementation (OGIC) was established as
mixed institution with representatives from the private and public sector to
address the AIJ pilot phase. A technical unit – OGIC (Office for Joint
Implementation) was also designed to provide technical support to the
Comission. At its inception the OGIC was supported by FUNDESA, a NGO
established by the private sector to promote development projects. At the
present the OGIC is managed by an academic institution (Universidad del
Valle).
Ongoing Activities

The NCCP is finalising administrative procedures with the UNDP office in
Guatemala in order to initiate the second national communication.

The study on the National Strategy for the country participation in the CDM is
beeing jointly executed by the the OGIC and the OGIC.

The market assessment of renewable energy technologies in power generation
is carried out by the Directorate for Energy at the Ministry for Energy and
Mines. The study is part of the PLANER project under the EU SYNERGY
Programme.

The Directorate for Forestry is involved in a FAO regional project on forestry
and climate change. The project is focused on defining a common regulatory
framework for CDM projects among the countries in the region. Six Central
american countries are participating in the project under the coordination of
EcoSecurities.

The Governments of Guatemala and the Netherlands have signed an MOU for
negotiating up to 10 million tons of carbon in the context of CDM.
10
CDM Institutional setup
Guatemala is the process of designating an appropiate focal point agency that will
cooordinate CDM activities. Two options are at the moment envisaged by local
authorities: either to convert the existing OGIC structure into an office for CDM
issues or to endorse CDM related fuctions to Programme on Climate Change under
the Ministry for Environment and Natural Resources. Despite the comptetition for
leadership among these two institutions, it is likely that the the first option will
materialise.
It worth to note that in addition to the possibility of benefiting from the carbon offset
market, the government interest in climate change responds to the increansingly
concern on the country’s vulnerability to climate change and variability.
Capacity Development for CDM
a)
Definition Phase

Both the OGIC and the National Climate Change Programme are working
together on identifying and designing the action plan for the year 2003.

A detailed working plan of the activities scheduled under the Definition Phase
of the CDM Project are summarised in the Annex C.

The national workshop is scheduled the 25 November.
b)
Working Plan for year 2003
Since Guatemala is in the process of building up institutional structures for the CDM,
the main concern during the first project year will be focused on hand on determining
the organisational structure of the focal point agency, and on the other on defining the
regulatory frame for project development. The guidelines for defining the project
workplan are as follows:

Make operational the Office for Clean Development. This includes: i) define
the ODL mission and objectives; ii) establish links with the rest of units and
institutions involved in climate change policies and strategies; iii) attain broad
stakeholder participation in the ODL activities; and iv) secure financial and
non-financial resources.

Establishment of the enabling regulatory frame for evaluating and approval of
CDM projects. This includes: i) develop national criteria and respective
information requirements to ensure a coherent, justifiable and transparent
assessment of CDM projects in accordance with the CDM Executive Board’s
decisions; ii) ensure the compliance of CDM projects with relevant policy and
regulatory national regimes; and iii) elaboration of guidelines and procedures
for project approval.
11
c)
Project management

Through a MOU between the Vice-ministry for Environment and UCC, the
Ministry for Enviroment endorses the project execution to the National Focal
Point.

The Focal point will coordinate execution of the project and will act as a local
counterpart for project definition and management issues.

The PNUD Office will administrate the resources allocated to local contracts.
12
CAPACITY DEVELOPMENT FOR THE CDM – PROJECT DEFINITION PHASE
ANNEX A
BOLIVIA
September
(week)
Activities
Responsibility
37
38
October
(week)
39
Working Plan 2003 – 2005: first draft
ODL
Review an comments to the first draft of the
Working Plan
I
Identification of themes and activities for UCC/FB
support to the local team
UCC / FB
Definition of UCC/FB technical assistance
UCC/FB, ODL
Final draft of the Working Plan
UCC/ FB, ODL
Preparation of the national workshop
ODL
National workshop (14 November)
UCC/FB, ODL
Regional workshop (28-29 November)
UCC/FB, ODL
Incorporation of workshops’ conclusions and
recommendations into the Working Plan
UCC/ FB, ODL
ODL
UCC – NCCP agreement on the project execution UCC, NCCP
NCCP – UNDP agreement on project
management
NCCP, UNDP
13
40
41
42
November
(week)
43
45
46
47
December
(week)
48
49
50
CAPACITY DEVELOPMENT FOR THE CDM – PROJECT DEFINITION PHASE
ANNEX B
ECUADOR
September
(week)
Activities
October
(week)
November
(week)
December
(week)
Responsibility
37
Working Plan 2003 – 2005: first draft
CORDELIM
Review an comments to the first draft of
the Working Plan
UCC / FB
Identification of themes and activities for
UCC/FB support to the local team
CORDELIM
Definition of UCC/FB technical assistance
UCC/FB, CORDELIM
Final draft of the Working Plan
UCC/FB, CORDELIM
Preparation of the national workshop
CORDELIM
National Workshop (27 November)
UCC / FB, CORDELIM
Regional workshop arrangements
(agenda, participants, logistic)
UCC / FB, CORDELIM
Regional workshop
UCC / FB, CORDELIM
Incorporation of workshops’ conclusions
and recommendations into the Working
Plan
UCC / FB- CORDELIM
UCC – CORDELIM agreement on the
project execution
UCC, CORDELIM
38
39
40
14
41
42
43
45
46
47
48
49
50
CAPACITY DEVELOPMENT FOR THE CDM – PROJECT DEFINITION PHASE
ANNEX C
GUATEMALA
September
(week)
Activities
Responsibility
Working Plan 2003 – 2005: first draft
CCU / OGIC
Review an comments to the first draft of the
Working Plan
I
Identification of themes and activities for UCC/FB
support to the local team
UCC / FB
Definition of UCC/FB technical assistance
UCC/FB, CCU
Final draft of the Working Plan
UCC/ FB, CCU
Preparation of the national workshop
CCU / OGIC
National workshop (14 November)
UCC/FB, CCU
/ OGIC
Regional workshop (28-29 November)
UCC/FB, CCU
/ OGIC
Incorporation of workshops’ conclusions and
recommendations into the Working Plan
UCC/ FB
UCC – MARN (?) agreement on the project
execution
UCC, MARN
MARN (?) – UNDP agreement on project
management
UNDP, MARN
37
38
October
(week)
39
CCU / OGIC
15
40
41
42
November
(week)
43
45
46
47
December
(week)
48
49
50
16