UNDP presentation by Marina Olshanskaya

1. Carbon Finance for Beginners Part 1: Kyoto Protocol and its mechanisms Wednesday 28 March, 2007 Bratislava, Slovakia

4. Direct Observations of Recent Climate Change Gobal mean temperature Global average sea level Northern hemisphere Snow cover Source: WG I Contribution to the IPCC Fourth Assessment Report, February 2007

5. Climate change: how it works Source: Department of Environment and Heritage. Government of South Australia

7. Annual greenhouse gas emission by sector Source: Global Warming Art

9. Climate change: General UN Message Science is clear : warming of climate system is unequivocal and attributable to human activities Severe impacts of climate change are already being felt, particularly in developing countries, and demand an urgent response Economic assessments indicate that cost of inaction will exceed the cost of taking action now by several orders of magnitude.

15. Kyoto Architecture: Cap&trade, JI & CDM Bulgaria Denmark CAP Trade in AAUs Italy Difference between trade in AAUs, ERUs & CERs - PRICE CDM projects Trade in CER (Certificates from CDM projects) Emissions in reporting year Allocated allowances (AAU) Surplus of allowances Deficit of allowance JI projects Trade in ERUs (Certificates from JI projects) Ukraine ?

21. Selection of project baseline Source: GTZ

26. CDM Eligibility Requirements: Additionality tool Step 1. Identify legal alternative scenarios to the project Step 2. Investment analysis Step 3. Barrier analysis Step 4. Common practice analysis Step 5. Impact of CDM The proposed CDM project activity is additional

27. a) Rigorous process led by CDM Executive Board. b) Project Design Document (PDD) as the centerpiece of the CDM process. The PDD includes: ・ project description ・ additionality argumentation ・ CER calculation c) The PDD will be subject to ・ public comments ・ scrutiny by an independent third party called the Designated Operational Entity (DOE) 24 CDM Project Cycle

28. CDM Project Cycle (1) Identifying CDM project (PIN) PPs (2) Preparing Project Design Document (PDD) - PPs (3) Getting approval from each Party involved - DNA (4) Validation - DOE (5) Registration – CDM EB (6) Monitoring - PPs (7) Verification and Certification - DOE (8) Issuance of CERs – CDM EB (9) Distribution of CERs - PPs PPs – project participants; DNA – Designated National Authority DOE – Designated Operational Entity, CDM EB – CDM Executive Board

34. CDM Project Cycle Vs GEF Project Cycle Step CDM GEF Project identification and development PIN/PDD PDGs/FSPs BUT: for CDM the existence of an “underlying project” is crucial (feasibility study, business plan, investors identified) before PIN/PDD Getting National approval Designated National Authority GEF Operational Focal Point Independent review DOE STAP Registration CDM EB GEF Monitoring PPs based on PDD and approved Monitoring Methodology IAs based on IAs’ rules and approved prodoc Evaluation DOE Independent evaluators

36. Overview of carbon markets: volume (tCO2) and value ($)

37. Overview of carbon markets: volume (tCO2) and value ($) EU-ETS Takes All: Shares of Volume (left) and Value (right) Transacted in the Carbon Market (2006 until September 30)

39. Type of technology in emission reduction projects (as a share of volume contracted)

42. THANK YOU FOR YOUR KIND ATTENTION