Download Slide 1

Development of carbon market and
provisions for credits from Least
Developed Countries in EU ETS and ESD
[email protected]
DG Climate Action
Unit B.3 International Carbon
Market, Aviation and Maritime
European Commission
1
“Offsetting” alone cannot solve
climate change problem
Figure 1: Projected development of greenhouse gas emissions in different
regions of the world
Gigatonnes CO2 equivalents
80
... If Annex I alone
reduces emissions to zero
70
60
50
Rest of World
40
Other annex 1
30
EU
20
... Global emission path
compatible with 2°C
scenario
10
0
1990
2050
Source: Greenhouse gas reduction pathways in the UNFCCC process up to 2025, CNRS/LEPII-EPE, RIVM /M NP,
ICCS-NTUA, CES-KUL (2003).
A vision: Concrete steps
forward
 Build an international carbon market
 To drive investments and achieve mitigation objectives at
least cost
 To generate important financial flows to developing
countries.
 Concrete steps:
 Link compatible domestic cap-and-trade systems to develop
an OECD-wide market
 New sector-wide market mechanisms for (advanced) DCs as
a step towards cap-and-trade systems
 Reform and better focus the CDM
 Outcome from Cancun: positive developments (i.e.
standardised baselines, CCS in CDM), but a lot of
work ahead on new market mechanisms
A vision:
carbon market transition
Relative share of global emissions
Bilaterally linked
cap and trade
Emissions not covered
by cap and trade
Sectoral crediting
applied
Reformed CDM
TIME
•Increasing focus on LDCs
•Strengthen governance
•Strengthen environmental integrity
Provisions for credits from
LDCs: EU ETS Directive
EU ETS provides certainty on acceptance of credits
from projects started in LDCs after 2012:
 when these projects are clearly additional and contribute to
sustainable development
Article 11a 4 of Directive 2009/29/EC: Use of CERs and
ERUs before entry into force of an international
agreement on climate change
To the extent that the levels of CER and ERU use, allowed to
operators or aircraft operators by Member States for the period from
2008 to 2012, have not been used up or an entitlement to use credits
is granted under paragraph 8, competent authorities shall allow
operators to exchange CERs issued in respect of emission reductions
from 2013 onwards for allowances from new projects started from
2013 onwards in LDCs
LDC clearly defined:
http://ec.europa.eu/clima/documentation/ets/docs/def_ldc.pdf
Provisions on credits in the
Effort Sharing Decision
Member States should ensure that their policies for purchasing these credits
enhance the equitable geographical distribution of projects, in particular by
increasing the share of CERs purchased from LDCs and SIDS
Article 5 of Effort Sharing Decision 406/2009/EC
5.1. Member States may use the following greenhouse gas emission reduction
credits [..]
(c) CERs issued in respect of emission reductions achieved from projects
implemented in LDCs which were eligible for use in the Community scheme
during the period from 2008 to 2012, until those countries have ratified a
relevant agreement with the Community or until 2020, whichever is the earlier;
5.5. Member States* [..] allowed to use additional credits amounting to 1 % of their
verified emissions in 2005 from projects in LDCs and SIDS each year, subject
to compliance with one of the following four conditions [..]
*Belgium, Denmark, Ireland, Spain, Italy, Cyprus, Luxembourg, Austria, Portugal,
Slovenia, Finland, Sweden
Other opportunities
 EU ETS:
 particular priority should be given to addressing the needs of
LDCs when revenues generated from auctioning are used to
facilitate developing countries’ adaptation to the impacts of
climate change
 Global Climate Change Alliance:
 Enhancing participation of LDCs and SIDS in the Clean
Development Mechanism as one of the five priority areas
 Proposed areas for intervention:
 Increasing capacity-building for participation in the CDM, and
providing technical support for cost-effective project
development
 Exploring options to showcase projects and project types that
are better suited to the specific conditions in LDCs and SIDS,
including through the development of methodologies for such
projects
GCCA priorities
► Adapting to climate change
► Promoting disaster risk reduction
► Reducing emissions from deforestation
and forest degradation (REDD)
► Enhancing developing countries’
participation in the Clean Development
Mechanism (CDM)
► Integrating climate change into poverty
reduction and development efforts
GCCA Progress to date
Policy dialogue and Country Support
 More than 30 countries/regions have received support since
2008 for a total amount of around €200M
 Several Joint Declarations on CC have been signed
GCCA SF
 Established in November 2009 with the objective of promoting
and facilitating efficient implementation of the GCCA actions in
target countries and regions (2.9 M€).
 Key tasks:
 enhance policy dialogue between the EU and target
countries/regions through organisation of high level
seminars (e.g. Bangladesh and Addis in 2010)
 assist in the identification and formulation of specific
cooperation activities in beneficiary countries.
 Provide training WS on integration of CC in countries‘
policies and strategies
The GCCA 2010 Countries
Country
Belize
Ethiopia
Mozambique
Nepal
Pacific Region
Date
Implementation
modality
2010
Contribution
agreement
with UNDP
2010
Indirect
centralized
manageme
nt to AFD
and GTZ
2010
Financing
Agreement
+ Indirect
centralized
manageme
nt with
DANIDA
2010
Financing
Agreement
+ Indirect
centralized
manageme
nt with
DFID
2010
Contribution
Agreement
with SPC
Total cost of the
Action
Focus of intervention
2.9
The overall objective of this project is to enhance adaptive
capacity and resilience to climate change in national
policies, including the water sectors in Belize: 1. Increase
national awareness for the effects of climate change; 2.
Mainstream climate change adaptation into national
development plans; and 3. Support implementation of the
National Adaptation Strategy to Address Climate Change in
the Water Sector
13.7
The overall objective is to contribute towards the construction of
a carbon neutral and climate resilient economy .The
specific objective is to increase the awareness and
capacity of targeted Government institutions both at
federal and regional levels and of the rural population at
large to deal with climate change. Sustainable land use
management and erosion control are the focus.
10.2
EC intervention will support the Government of Mozambique
(GoM) in tackling the adverse effects of climate change,
with a special focus on the most vulnerable communities in
the rural areas of the country. Focus on agriculture and
agroforestry sector
8.6
Build capacity of Government of Nepal to develop, cost, budget
and implement evidence-based policy and measures aimed
at mainstreaming climate change in key development
sectors (agriculture, forestry, water and energy). Main
focus will be on watersheds and their management.
11.4
Promote a long term/strategic approach to adaptation to CC
planning and budgets and to pave the way towards more
effective and coordinated aid delivery modalities at
GCCA Pilot Countries
2011/2012
Suggested
indicative
GCCA
allocation
(EUR million)
2011
Suggested indicative
GCCA
allocation
(EUR million)
2012
Direction
Region
Country/Region
C (ACP)
Africa
Mozambique
3 to 5
C (ACP)
Africa
Ethiopia
4 to 6
C (ACP)
Africa
Liberia
3 to 5
C (ACP)
Africa
Gambia
3 to 4
C (ACP)
Africa
Benin
4,5 to 6
C (ACP)
Africa
Uganda
7 to 11
C (ACP)
Africa
Sierra Leone
4 to 5
C (ACP)
Africa
Malawi
5 to 7
C (ACP)
Africa
Burkina Faso
5 to 7
C (ACP)
Africa
Kenya
To be decided
C (ACP)
Africa
Democratic Republic of Congo
To be decided
C (ACP)
Africa
Burundi
To be decided
Africa
Eastern and Southern Africa (COMESA-SADC-EAC) or
other subregional programme (e.g. CILSS or
CEDEAO)
C (ACP)