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International Support for Domestic Action INTERNATIONAL SUPPORT FOR DOMESTIC ACTION Mechanisms to Facilitate Mitigation in Developing Countries Karsten Neuhoff DIW & Climate PolicyInitiative Copenhagen 14/12/09 INTERNATIONAL SUPPORT FOR DOMESTIC ACTION Federal Government Plan “The National Plan on Logistics and Transport: a policy that can promote a significant change in the modal split in the country” The reduction of freight by road has potential to mitigate GHG: 10 to 20% of freight emissions Workshop conducted to assess how to achieve the target. Source:PNLT, 2007 INTERNATIONAL SUPPORT FOR DOMESTIC ACTION 3. International mechanisms Capacity Building Technology Cooperation 1. Low-carbon - emission Development plan Strategy 2. NAMA Autonomous mitigation action Domestic 4. Reporting International International Verified INTERNATIONAL SUPPORT FOR DOMESTIC ACTION INTERNATIONAL SUPPORT FOR DOMESTIC ACTION INTERNATIONAL SUPPORT FOR DOMESTIC ACTION INTERNATIONAL SUPPORT FOR DOMESTIC ACTION Role of Public Sector Role of Private Sector Domestic International Capacity building / Technical assistance Capacity building Technical assistance New business practises Remove regulatory barriers Experience / Technology Technology / Skills Investment Costs Power sector $ billions in 2030 250 Additional fuel supply Energy cost savings Subsidy removal Carbon pricing Carbon markets Public transfers Incremental costs Support incremental costs Offset mechanisms (e.g. CDM) 200 Shift operation costs to investment 150 Shift finance / investment 100 Technical assistance Transparency, outside commitment Loans Risk guarantees 50 Reference Mitigation Scenario (Conventional technology & practises) (Low carbon technology & development) INTERNATIONAL SUPPORT FOR DOMESTIC ACTION Facilitating access to finance Contribution to investment and operation Public Finance Mechanism Up-front grant - Standard Technical assistance grants - ‘Smart’ grants Funding during operation Provision of equity - Private equity - Venture capital Direct support International to project GEF grants Other bilateral and multilateral DFIs Risk coverage - Full or partial guarantee - Policy to cover specific causes of non performance or all - Other financial products International to national National to project ODA Investment support Grant linked to continuous delivery (finance +regulatory stability) *Incremental payment to renewable *Removal of energy subsidies * Carbon tax/cap and trade scheme ADB Clean Energy PE fund n/a Carbon Trust VC fund IFIs e.g. EBRD, IFC IMF and WB loans Offset mechanisms (CDM) WB support Provision of debt - Loans - Credit lines Indirect support MIGA political risk insurance WB/IFC Partial Credit and Partial Risk Guarantees Export credit agency guarantees INTERNATIONAL SUPPORT FOR DOMESTIC ACTION INTERNATIONAL SUPPORT FOR DOMESTIC ACTION Mutlilateral Finance Grant Project Upfront Country Bilateral Project Country Majority of grants provided bilaterally Operation Equity Debt Illustrative Majority of finance provided with multilateral mechanisms Match needs of lowcarbon development Guarantee Carbon revenue • Auction revenue • Aviation&shipping • Risk management • Offsets Increasing role for facilitating access to finance? INTERNATIONAL SUPPORT FOR DOMESTIC ACTION INTERNATIONAL SUPPORT FOR DOMESTIC ACTION In Support of Programme Implementation and Management INTERNATIONAL SUPPORT FOR DOMESTIC ACTION LEVEL OF REPORTING NATIONALLY DEFINED & REPORTED NATIONALLY DEFINED & INTERNATIONALLY REPORTED Increased local ownership/participation Tailored to specific requirements INTERNATIONALLY DEFINED & REPORTED Facilitates benchmarking Ensures difficulties reported Accountability to third parties Contributes to international learning Accountability to cooperation partner INTERNATIONAL SUPPORT FOR DOMESTIC ACTION 3. International mechanisms Capacity Building Technology Cooperation 1. Low-carbon - emission Development plan Strategy 2. NAMA Autonomous mitigation action Domestic 4. Reporting International International Verified INTERNATIONAL SUPPORT FOR DOMESTIC ACTION International Support for Domestic Climate Policies in Developing Countries, Climate Policy 9.5 Editor: Karsten Neuhoff Six case studies explore the domestic drivers and barriers for policies with climate (co-)benefits in developing countries and show that international support can help to overcome these constraints by providing additional resources for incremental policy costs, technical assistance, and technology cooperation to build local capacity. EDITORIAL Understanding the roles and interactions of international cooperation on domestic climate policies, Karsten Neuhoff SYNTHESIS Using intermediate indicators: lessons for climate policy, James Cust Policy targets: lessons for effective implementation of climate actions, Sarah Lester, Karsten Neuhoff A history of conditionality: lessons for international cooperation on climate policy, Maike Sippel, Karsten Neuhoff COUNTRY STUDY Brazilian low-carbon transportation policies: opportunities for international support, Haroldo Machado-Filho Policy and regulatory framework for renewable energy and energy efficiency development in Ghana, William Gboney Domestic climate policy for the Indian steel sector, Umashankar Sreenivasamurthy Climate co-benefit policies for the Indian power sector: domestic drivers and North-South cooperation, Anoop Singh Concentrated solar power in South Africa, Kate Grant China’s wind industry: policy lessons from domestic government interventions and international Support, Xiliang Zhang, Shiyan Chang, Ruoshui Wang, Molin Huo OUTLOOK Twinning: lessons for a South-North climate policy context, Zsuzsanna Pato INTERNATIONAL SUPPORT FOR DOMESTIC ACTION Climate Strategies’ Contact Details: UK - Managing Director: Jon Price ([email protected]) US - Research Director: Thomas L. Brewer Secretariat: Climate Strategies c/o University of Cambridge 13-14 Trumpington Street Cambridge, CB2 1QA, UK +44 (0) 1223 748812 www.climatestrategies.org Climate Strategies aims to assist governments in solving the collective action problem of climate change. It connects leading applied research on international climate change issues to the policy process and to public debate, raising the quality and coherence of advice provided on policy formation. We convene international groups of experts to provide rigorous, fact-based and independent assessment on international climate change policy. To effectively communicate insights into climate change policy, Climate Strategies works with decision-makers in government and business, particularly, but not restricted to, the countries of the European Union and EU institutions. Climate Strategies is grateful for funding from the government of Australia, Agence de l'environnement et de la maîtrise de l'énergie (ADEME) in France, Ministry of Foreign Affairs (MFA) in Norway, Swedish Energy Agency, Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) in Germany, Department for Environment, Food and Rural Affairs (DEFRA), the Office of Climate Change (OCC), Department for International Development (DFID) in the UK, The Carbon Trust in the UK, Corus Steel, Center for International Public Policy Studies (CIPPS) in Japan, European Climate Foundation (ECF), and the German Marshall Fund of the United States.
