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CLEAN DEVELOPMENT MECHANISM: OVERVIEW DENR Training Course November 4-6, 2003 Climate Change Information Center Manila Observatory Ateneo de Manila University
Contents ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
1. Problem of Climate Change
Rising temperatures results in changing weather patterns ,[object Object],[object Object],[object Object],Historic Temperature Data
 
Atmospheric CO 2  Concentration and Temperature Change 150   100   50   0 Thousands of Years ago Temperature change ( o C) Carbon dioxide (ppmv)
Climate Change ,[object Object]
Human Sources of GHGs Carbon Dioxide (CO 2 )  – Most prevalent GHG Methane (CH 4 )  – Second most common, 21x the potency of CO 2 Nitrous Oxide (N 2 O)  – 310x the potency of CO 2 Other Gases  – HFCs, PFCs, and SF 6  = range 600 – 23900x potency of CO 2   Transport Transportation Energy Generation Industrial Processes Land Use:  Agriculture & Forestry
GHG and Environmental Impacts Changes in temperature, weather patterns and sea level rise Agriculture:   Changes in crop yields Irrigation demands, Productivity Forests:   Change in Ecologies, Geographic range of species, and Health and productivity Coastal Areas:   Erosion and flooding Inundation Change in wetlands Water Resources:   Changes in water supply and water quality Competition/Trans-border Issues Human Health:   Weather related mortality  Infectious disease  Air quality - respiratory illness Industry and Energy:   Changes in Energy demand Product demand & Supply
Philippine Rice Production.   Arrows indicate El Ni ñ o events.   (source: Food and Agricultural Organization)
Vulnerability information systems El Ni ñ o - La Ni ñ a Vulnerability Map Support for Greenhouse Gas Inventory
Sea level rise 3D modeling and visualization tools are used for vulnerability assessment, exact location and quantification of areas which  are susceptible to  floods due to rise in sea level. Study area: Northern part of Navotas, Metro Manila
2.  UNFCCC and KYOTO PROTOCOL
United Nations Framework Convention on Climate Change ,[object Object],[object Object]
 
United Nations Framework Convention on Climate Change ,[object Object],[object Object]
 
Division of Parties by Annex Australia / Austria / Belgium / Canada / Denmark / EC / Finland / France / Germany / Greece /Iceland / Ireland / Italy / Japan / Luxembourg / Netherlands / New Zealand / Norway / Portugal / Spain / Sweden / Switzerland / Turkey / United Kingdom / USA Annex I Belarus / Bulgaria / Croatia / Czech Republic / Estonia / Hungary / Latvia / Liechtenstein / Lithuania / Monaco / Poland / Romania / Russian Federation / Slovakia / Slovenia / Ukraine   Non-Annex I Countries = All the Rest of Ratifying Countries Annex II
Kyoto Protocol ,[object Object],[object Object],[object Object]
Selected Quantified Emission Limitation (%) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Kyoto Protocol ,[object Object],[object Object],[object Object],[object Object]
Kyoto Protocol: Flexibility Mechanisms Present day 2012 (BaU) Assigned Amounts Joint Implementation Annex I   GHG Emissions Clean Development Mechanism 2012 with KP - 5% 1990 level Domestic Actions Emission Trading
3. Clean Development Mechanism
Clean Development Mechanism ,[object Object],[object Object],[object Object],[object Object]
What can the  CDM  do for developing countries ,[object Object],[object Object],[object Object],[object Object],[object Object]
What are the Criteria for  CDM   Projects? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
4. CDM Eligible Projects
CDM Eligible Projects ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Renewable energy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Renewable energy ,[object Object],[object Object],[object Object],[object Object],[object Object]
Renewable energy ,[object Object],[object Object],[object Object]
Fuel switching ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
End-use energy efficiency improvements ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Supply-side energy efficiency improvements ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Agriculture ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Industrial processes ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Sink projects ,[object Object],[object Object],[object Object],[object Object]
Clean Development Mechanism ,[object Object],[object Object],[object Object],[object Object]
5. Environmental Benefits of CDM
CDM Project ,[object Object],[object Object]
Simplistic numerical example ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Simplistic numerical example ,[object Object],[object Object],[object Object]
Simplistic numerical example ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Additionality ,[object Object],[object Object],[object Object],[object Object],[object Object]
Project Additionality ,[object Object]
Project Additionality ,[object Object],[object Object]
Environmental Additionality ,[object Object]
Environmental Additionality ,[object Object],[object Object],Emission Reductions = hypothetical  baseline  emissions  –  effective (project) emissions
Environmental additionality and baseline   CO 2  Emissions CDM project CO 2  emissions ( observable ) Real ,  measurable  and  long-term Additional  CO 2  emissions reduction Years Baseline scenario   CO 2  emissions  ( that would occur )
6. Mechanics of CDM
Starting Point: Viable Project ,[object Object],[object Object],[object Object],[object Object]
CDM Project Cycle C D C D 4 M I C C C Project Design & Formulation Project Design Document
Contents of CDM-PDD A. General description of project  activity   B. Baseline methodology     C. Duration of the project activity/  Crediting period     D. Monitoring methodology and plan   E. Calculations of GHG emissions  by sources     F.  Environmental impacts   G. Stakeholders comments
CDM Project Cycle C D C D 4 M I C C C Project Design & Formulation National Approval Project Design Document
National Approval ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
CDM Project Cycle C D C D 4 M I C C C Project Design & Formulation National Approval Validation / Registration Project Design Document Operational Entity A
Validation ,[object Object],[object Object],[object Object],[object Object],[object Object]
Registration ,[object Object],[object Object]
CDM Project Cycle C D C D 4 M I C C C Project Design & Formulation National Approval Validation / Registration Project Financing Monitoring Verification / Certification Issuance of CERs Project Design Document Monitoring Report Verification Report /  Certification Report / Request of CERs Operational Entity A Investors Project Participants Operational Entity B EB / Registry
Verification ,[object Object],[object Object],[object Object],[object Object]
Issuance of CERs ,[object Object],[object Object],[object Object]
7. Basics of CDM Financing
Total Project Costs and Sources of Finance   ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Financing Options in a CDM Project ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
How Carbon Funds Work.. Industrialized Governments and Companies Developing Countries and Communities Carbon Fund $ Technology Finance $ Technology Finance CO  Equivalent 2 Emission Reductions CO  Equivalent 2 Emission Reductions
Banks Investor Debt Equity Power Purchase Agreement $$ Electricity $$ Carbon Credits Nature of Carbon Financing Contract Carbon Fund $ $ 2 2 Emission Reduction Purchase Agreement
Financing Options in a CDM Project ,[object Object],[object Object]
Emission Reduction Purchase Agreement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
How CDM can matter FIRR CER income 0 Without CERs implemented With CERs not implemented No CDM Without CERs not implemented; with CERs implemented CDM
Impact of Carbon Finance on  Project Financial Rate of Return ,[object Object],[object Object],Methane Kick 5-10+ Municipal Solid Waste 3-7 Crop/Forest  Residues 0.8-2.6 Hydro, Wind, Geothermal  IRR Technology
Lessons from PCF: Carbon Prices $3.60  [+option] Romania  Afforestation $4.00 Czech small-scale energy efficiency $3.75  + 0.2 South Africa Durban waste management $3.50  + 0.5 Colombia wind farm  $3.50 C. America small wind/hydro $3.50 Poland District Heating Fuel Switch – Coal to Geothermal and Biomass $3.50 Brazil sustainable charcoal replacing coal/coke $3.50  [ +option] Chile: 25 MW hydro run-of-river $3.00 Uganda small hydro (5&1.5 MW) remote area
ODA and CDM Funding ,[object Object],[object Object],[object Object]
Banks Investor Debt Equity Power Purchase Agreement $$ Electricity $$ Carbon Credits Emission Reduction Purchase Agreement ODA Non-ODA Carbon Fund $ $ 2 2 Emission Reduction Purchase Agreement
8. Philippine participation in CDM
Requirements for the Philippines to Participate in CDM ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Requirements for the Philippines to Participate in CDM ,[object Object],[object Object],[object Object]
Roberto C. Yap, S.J., Ph.D. Environmental Economist Climate Change Information Center Manila Observatory Ateneo de Manila University Tel +63 2 426-6144 Fax +63 2 426-6070 [email_address]

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Cdm Overview

  • 1. CLEAN DEVELOPMENT MECHANISM: OVERVIEW DENR Training Course November 4-6, 2003 Climate Change Information Center Manila Observatory Ateneo de Manila University
  • 2.
  • 3. 1. Problem of Climate Change
  • 4.
  • 5.  
  • 6. Atmospheric CO 2 Concentration and Temperature Change 150 100 50 0 Thousands of Years ago Temperature change ( o C) Carbon dioxide (ppmv)
  • 7.
  • 8. Human Sources of GHGs Carbon Dioxide (CO 2 ) – Most prevalent GHG Methane (CH 4 ) – Second most common, 21x the potency of CO 2 Nitrous Oxide (N 2 O) – 310x the potency of CO 2 Other Gases – HFCs, PFCs, and SF 6 = range 600 – 23900x potency of CO 2 Transport Transportation Energy Generation Industrial Processes Land Use: Agriculture & Forestry
  • 9. GHG and Environmental Impacts Changes in temperature, weather patterns and sea level rise Agriculture: Changes in crop yields Irrigation demands, Productivity Forests: Change in Ecologies, Geographic range of species, and Health and productivity Coastal Areas: Erosion and flooding Inundation Change in wetlands Water Resources: Changes in water supply and water quality Competition/Trans-border Issues Human Health: Weather related mortality Infectious disease Air quality - respiratory illness Industry and Energy: Changes in Energy demand Product demand & Supply
  • 10. Philippine Rice Production. Arrows indicate El Ni ñ o events. (source: Food and Agricultural Organization)
  • 11. Vulnerability information systems El Ni ñ o - La Ni ñ a Vulnerability Map Support for Greenhouse Gas Inventory
  • 12. Sea level rise 3D modeling and visualization tools are used for vulnerability assessment, exact location and quantification of areas which are susceptible to floods due to rise in sea level. Study area: Northern part of Navotas, Metro Manila
  • 13. 2. UNFCCC and KYOTO PROTOCOL
  • 14.
  • 15.  
  • 16.
  • 17.  
  • 18. Division of Parties by Annex Australia / Austria / Belgium / Canada / Denmark / EC / Finland / France / Germany / Greece /Iceland / Ireland / Italy / Japan / Luxembourg / Netherlands / New Zealand / Norway / Portugal / Spain / Sweden / Switzerland / Turkey / United Kingdom / USA Annex I Belarus / Bulgaria / Croatia / Czech Republic / Estonia / Hungary / Latvia / Liechtenstein / Lithuania / Monaco / Poland / Romania / Russian Federation / Slovakia / Slovenia / Ukraine Non-Annex I Countries = All the Rest of Ratifying Countries Annex II
  • 19.
  • 20.
  • 21.
  • 22. Kyoto Protocol: Flexibility Mechanisms Present day 2012 (BaU) Assigned Amounts Joint Implementation Annex I GHG Emissions Clean Development Mechanism 2012 with KP - 5% 1990 level Domestic Actions Emission Trading
  • 23. 3. Clean Development Mechanism
  • 24.
  • 25.
  • 26.
  • 27. 4. CDM Eligible Projects
  • 28.
  • 29.
  • 30.
  • 31.
  • 32.
  • 33.
  • 34.
  • 35.
  • 36.
  • 37.
  • 38.
  • 40.
  • 41.
  • 42.
  • 43.
  • 44.
  • 45.
  • 46.
  • 47.
  • 48.
  • 49. Environmental additionality and baseline CO 2 Emissions CDM project CO 2 emissions ( observable ) Real , measurable and long-term Additional CO 2 emissions reduction Years Baseline scenario CO 2 emissions ( that would occur )
  • 51.
  • 52. CDM Project Cycle C D C D 4 M I C C C Project Design & Formulation Project Design Document
  • 53. Contents of CDM-PDD A. General description of project activity   B. Baseline methodology   C. Duration of the project activity/ Crediting period   D. Monitoring methodology and plan   E. Calculations of GHG emissions by sources   F. Environmental impacts   G. Stakeholders comments
  • 54. CDM Project Cycle C D C D 4 M I C C C Project Design & Formulation National Approval Project Design Document
  • 55.
  • 56. CDM Project Cycle C D C D 4 M I C C C Project Design & Formulation National Approval Validation / Registration Project Design Document Operational Entity A
  • 57.
  • 58.
  • 59. CDM Project Cycle C D C D 4 M I C C C Project Design & Formulation National Approval Validation / Registration Project Financing Monitoring Verification / Certification Issuance of CERs Project Design Document Monitoring Report Verification Report / Certification Report / Request of CERs Operational Entity A Investors Project Participants Operational Entity B EB / Registry
  • 60.
  • 61.
  • 62. 7. Basics of CDM Financing
  • 63.
  • 64.
  • 65. How Carbon Funds Work.. Industrialized Governments and Companies Developing Countries and Communities Carbon Fund $ Technology Finance $ Technology Finance CO Equivalent 2 Emission Reductions CO Equivalent 2 Emission Reductions
  • 66. Banks Investor Debt Equity Power Purchase Agreement $$ Electricity $$ Carbon Credits Nature of Carbon Financing Contract Carbon Fund $ $ 2 2 Emission Reduction Purchase Agreement
  • 67.
  • 68.
  • 69. How CDM can matter FIRR CER income 0 Without CERs implemented With CERs not implemented No CDM Without CERs not implemented; with CERs implemented CDM
  • 70.
  • 71. Lessons from PCF: Carbon Prices $3.60 [+option] Romania Afforestation $4.00 Czech small-scale energy efficiency $3.75 + 0.2 South Africa Durban waste management $3.50 + 0.5 Colombia wind farm $3.50 C. America small wind/hydro $3.50 Poland District Heating Fuel Switch – Coal to Geothermal and Biomass $3.50 Brazil sustainable charcoal replacing coal/coke $3.50 [ +option] Chile: 25 MW hydro run-of-river $3.00 Uganda small hydro (5&1.5 MW) remote area
  • 72.
  • 73. Banks Investor Debt Equity Power Purchase Agreement $$ Electricity $$ Carbon Credits Emission Reduction Purchase Agreement ODA Non-ODA Carbon Fund $ $ 2 2 Emission Reduction Purchase Agreement
  • 75.
  • 76.
  • 77. Roberto C. Yap, S.J., Ph.D. Environmental Economist Climate Change Information Center Manila Observatory Ateneo de Manila University Tel +63 2 426-6144 Fax +63 2 426-6070 [email_address]

Notes de l'éditeur

  1. Slide: taken from the web and modified
  2. Slide modified from Whitehouse webpage
  3. El Nino and La Nina are extreme phases of naturally occuring climate cycle referred to as the El Nino Southern Oscillation (ENSO). Both terms refer to large-scale changes in sea-surface temperature across the eastern tropical Pacific. Usually, sea-surface readings off South America's west coast range from 60-70 deg F (16-21 deg C), while they exceed 80 deg F (27 deg C) in the "warm pool" located in the central and western Pacific. This warm pool expands to cover the tropics during El Nino, but during La Nina, the easterly trade winds strengthen and the cold upwelling along the equator and the West coast of South America intensifies. Sea-surface temperatures along the equator can fall as much as 7 deg F (-14 dg C) below normal. El Nino and La Nina conditions recur every few years and can persist for as long as two years. (source: http://www.noaa.gov) Sources: - Base Map with Administrative Boundaries (UTM Projection), NAMRIA - Field Information Manual on El Nino July 1997, BSWM - 1998 Philippine Statistical Yearbook, NSO - El Nino and La Nina Definition, NOAA Methodology: Degree of Vulnerability of El Nino and La Nina based on PAGASA's Climate Map, slope, flooding and elevation. Note to Users: This map is version 1.0 and is under development. The Manila Observatory would appreciate feedback on the veracity of spatial data. Manila Observatory Support for Greenhouse Gas Inventory Philippine Climate Change Program Development, 1999
  4. Carbon dioxide methane nitrous oxide hydrofluorocarbons perfluorocarbons sulfur hexafluoride