Accounting for flexibility against uncertain baselines: lessons from case studies in the eastern European energy sector

The Kyoto Protocol defines two project-based flexibility mechanisms: joint implementation (JI) and the clean development mechanism (CDM). The main methodological problem associated with both these mechanisms is the choice of an appropriate baseline: since the baseline is, by definition, counterfactual, it imposes considerable uncertainty on the accounting framework. Little work to date has been carried out on trying to estimate how large this uncertainty might be for particular project types. This paper aims to fill this gap by proposing an approach to baseline construction which explicitly acknowledges this uncertainty. This approach is illustrated through the examination of pilot JI projects in the energy sector in eastern Europe, and then discussed in terms of its implications for climate policy. The results presented are estimates of the range of counterfactual uncertainty in greenhouse gas emission reductions based on the construction of a number of possible baselines for each project. This range is found to be about ±35% for demand side projects, ±45% for heat supply projects, ±55% for cogeneration projects, and ±60% for electricity supply projects. Estimates of uncertainty in the costs of the pilot projects are also found to be high. The paper discusses the problems arising from such large uncertainty and starts to indicate how this uncertainty may be managed.     

Combining cap-and-trade with offsets: lessons from the EU-ETS

Linking a cap-and-trade with an offset mechanism has many theoretical advantages: it reduces compliance costs, extends the price signal outside the cap-and-trade, and triggers technology transfer. However, it is feared that such linking will induce outsourcing of emissions reduction at a low price and undermine the price incentive in the cap-and-trade. The EU Emissions Trading Scheme (EU ETS) is the first full-scale example of a cap-and-trade system linked to project-based mechanisms such that offsets have effectively been used by industrial installations. This article is an ex post analysis of EU ETS data for the years 2008 and 2009, and the characteristics of the link and its efficiency are evaluated. Although offsets have been much used, their use is concentrated and not very intense or frequent, which allays the fear that offsets will flood the market. Although the majority of surrendered CERs effectively come from the largest and oldest projects, the credits surrendered are similar to those available on the market. Possible factors that contribute towards inefficiency are the rules for using offsets, transaction costs affecting the participation of small installations, awareness and openness to market-based instruments, and uncertainties regarding CERs offer and demand from other markets. However, the impact on EUA equilibrium price still needs to be quantified.     

Developing institutions for the clean development mechanism (CDM): African perspectives

Abstract

The clean development mechanism (CDM) requires developing countries to set up designated national authorities (DNAs). The DNA should be designed to both attract investment and to establish an effective regulatory framework for project approval—including assessment to ensure that CDM projects contribute to national sustainable development objectives. Since CDM investment flows to Africa are uncertain, however, countries cannot risk large investments in institutional infrastructure and need to build on existing institutions. This article examines the critical functions that a DNA has to fulfil, and outlines several institutional models. It concludes that models that minimize institutional cost by drawing on existing institutions for environmental impact assessment and promotion of foreign direct investment are likely to be the best starting-point for DNAs in many African countries.     

全球气候治理背景下的船舶营运能效评级方法

为共同应对全球气候变化,国际海事组织(IMO)计划制定一套强制性船舶营运能效(碳排放强度)国际机制,与现有强制性船舶设计能效机制互为补充.然而,由于受诸多因素影响,船舶营运能效具有较大的随机性和不确定性,为相关国际机制的构建带来巨大挑战.文中通过构建带有年份虚拟变量的碳强度分位数回归模型,实现了对不同时期海运船队碳排放...     

A conceptual framework and its application for addressing leakage: the case of avoided deforestation

Abstract

One of the most challenging technical issues associated with project-based mechanisms is that of leakage. A conceptual framework is proposed for the identification and analysis of leakage potentially generated by a project. The categorization of leakage based on the actors responsible for their manifestation is proposed, which divides sources of leakage into primary and secondary types. It is the actors or agents responsible for the baseline activities that cause primary leakage. Secondary leakage occurs when the project's outputs create incentives for third parties to increase emissions elsewhere. This distinction, based on the source of leakage, provides a basis for the analysis outlined in the paper. The extent and type of leakage will vary depending on the project typology and design. Using a decision tree approach, the process of identifying potential sources of leakage is demonstrated for the case study of avoided deforestation projects. If the main elements determining a baseline are properly identified and understood, in particular the ‘baseline agents’, a combination of the decision tree approach and apportioning responsibility, can assist in the quantification and monitoring of primary leakage. An analysis at the project design stage can also assist in minimizing the risk of future leakage. Econometric methods may prove more useful in analyzing secondary leakage.     

A conceptual framework and its application for addressing leakage: the case of avoided deforestation

One of the most challenging technical issues associated with project-based mechanisms is that of leakage. A conceptual framework is proposed for the identification and analysis of leakage potentially generated by a project. The categorization of leakage based on the actors responsible for their manifestation is proposed, which divides sources of leakage into primary and secondary types. It is the actors or agents responsible for the baseline activities that cause primary leakage. Secondary leakage occurs when the project’s outputs create incentives for third parties to increase emissions elsewhere. This distinction, based on the source of leakage, provides a basis for the analysis outlined in the paper. The extent and type of leakage will vary depending on the project typology and design. Using a decision tree approach, the process of identifying potential sources of leakage is demonstrated for the case study of avoided deforestation projects. If the main elements determining a baseline are properly identified and understood, in particular the ‘baseline agents’, a combination of the decision tree approach and apportioning responsibility, can assist in the quantification and monitoring of primary leakage. An analysis at the project design stage can also assist in minimizing the risk of future leakage. Econometric methods may prove more useful in analyzing secondary leakage.     

Policy making for renewable energy in India: lessons from wind and solar power sectors

It is clear that developing countries will have to be part of the global mitigation effort to avoid ‘dangerous climate change’, and, indeed, many of them are already undertaking significant actions on multiple fronts to help address this problem, even if they have not yet taken on legally binding commitment under the United Nations Framework Convention on Climate Change (UNFCCC). Since the deployment of GHG-mitigating technologies is already a significant part of this effort and likely to be even more so in the future, drawing lessons from existing programmes can help accelerate and enhance the effectiveness of this deployment process. Accordingly, this article aims to examine the deployment of wind and solar power in India, paying specific attention to the role of public policy in incentivizing and facilitating this deployment, how these policies have evolved over time, what has shaped this evolution, and what the learning has been over this period. Through this analysis, the intention is to draw out key lessons from India's experience with deployment policies and programmes in these two sectors and highlight the issues that will need to be given particular consideration in the design of future domestic policies and international cooperation programmes to enhance the move towards climate-compatible development in India. Many of these lessons should also be relevant for other developing countries that are attempting to balance their climate and developmental priorities through the deployment of renewable energy technologies.     

Challenges in financing public sector low-carbon initiatives: lessons from private finance for a school district in British Columbia,Canada

Governments are major investors in climate change mitigation, but aversion to public indebtedness has led to reliance on private finance to deliver public assets. Compounding this challenge, financing through Energy Service Contracts is ruled out by accounting rules. With public and traditional private funding avenues closed, government departments have sought contracts that do not disclose the full cost of borrowing, such as the Public–Private Partnership (PPP) described in this case study. We unpack the utility contract filed with the provincial regulator to show that circumventing budgetary constraints cost the Delta School Board (DSB) 8.75% per annum on borrowed private funds while public finance would have cost 4%pa. All levels of the public sector are keen to play their role in climate mitigation. Climate policy is about not passing our burden of unbridled fossil fuel use and greenhouse gas emissions to future generations. If we do not exempt public sector capital investments for decarbonization from deficit regulations, we risk passing an unnecessary economic burden to future generations.

Key policy insights

• Transition to a low-carbon economy requires public sector investments that exceed budget deficit regulations and political aversion in many jurisdictions;

• Private–Public Partnerships are currently viewed as the solution to this self-imposed fiscal constraint;

• PPPs without clear performance targets or contractual templates will expose less experienced public sector investors to high costs and emissions above expectations.

     

Transaction costs for firms in the EU ETS: lessons from Ireland

Until now, there has been little empirical evidence that EU Emissions Trading Scheme (ETS) transaction costs are incurred at firm level. The transaction costs (internal costs, capital costs, consultancy and trading costs) incurred by Irish firms under the EU ETS during its pilot phase (2005–2007) were measured and analysed. Evidence for the sources of transaction costs, their magnitude and the distribution of costs shows that these were mainly administrative in nature. Considerable variation in costs was found due to economies of scale, as the costs per tonne of CO₂ were lower for participants with larger allocations. For the largest firms—accounting for over half the emissions—average transaction costs were €0.05 per tonne. However, for small firms, average transaction costs were €2.02—over 18% of the current allowance price. This supports the concerns that transaction costs are excessive for smaller participants. The immediate policy implication is that additional attention will be needed to address different sizes of firms, number of installations per firm, and the size of the initial allocations.     

Carbon accounting for sinks in the CDM after CoP-9

Abstract

The role of sinks in the clean development mechanism (CDM) has been a subject of controversy for several reasons; one being that temporary carbon storage in forests appeared to prevent any opportunity to use them as an option to reduce permanent greenhouse gas (GHG) emissions. In Milan (December 2003), the Conference of the Parties (CoP) decided to address this problem by introducing two types of expiring units: temporary CERs (tCERs) and long-term CERs (lCERs). Countries committed to emission reductions may acquire these units to temporarily offset their emissions and thus to postpone permanent emission reductions. As further decided by the CoP, baseline emissions of GHGs and the enhancement of sinks outside the project boundary will not be accounted for in the calculation of tCERs or lCERs. The contribution of CDM-sink projects to GHG emissions abatement will therefore be greater than what will be credited to them. On the other hand, permanent GHG emissions that may result as a consequence of the implementation of sink project activities are treated as non-permanent. If these emissions are above avoided baseline emissions, CDM-sinks will result in net increases of GHG emissions into the atmosphere. After briefly reassessing the non-permanence problem, this article explains how tCERs and lCERs should be quantified according to Decision 19/CP.9 of CoP-9 and how calculations are implemented in the forthcoming software CO₂ Land. Using a simple numerical example, it illustrates how the GHG accounting rule adopted at CoP-9 may result in net increases of GHG emissions. In the conclusion, a possible solution to this problem is proposed.     

多台国内外先进天气现象仪对比分析

业务降水现象仪作为一种降水滴谱测量设备,可以用于天气现象判断,其包含的降水滴谱信息更是反映了诸多降水微物理特征,而不同设备的观测特性和精度存在一定的差异,了解不同设备的差异,对其资料的后续应用有重要的意义。本文利用2018年湖北省咸宁市黑山观测站8次液态降水过程中地面降水观测、DSG5型业务降水现象仪与同址的Parsivel型降水滴谱仪测量的降水粒子谱信息及其反演的物理参量,共1 503对样本开展对比分析,研究结果表明：(1)相比于地面自动站降水数据,Parsivel与地面观测一致性较高,DSG5则有一定的偏小。(2)相对于DSG5,Parsivel观测的粒子数浓度N_w相对较多、质量加权平均直径D_m则相对较小。(3)对于分钟雨强RR≥20 mm·h^-1的降水,Parsivel粒子直径小于(大于)3 mm数浓度高于(低于) DSG5的观测。(4)对于直径大于4 mm的粒子,Parsivel的观测的下落速度略低于理论值,DSG5则明显大于理论值。另外,2次雨雪转换过程中降水现象观测对比研究表明DSG5对降水现象有着良好的观测,相比于Parsivel,其在降水相态转换过程中的天气现象与人工观测结果一致性更好。

     

Ethnic conflict as a risk amplifier for resurgent P. vivax malaria in temperate zones: A case study from the Caucasus region

One of the most protracted post-Soviet conflicts of the 1990s was a territorial dispute between Armenia and Azerbaijan over the contested Karabakh region. Years of ethnic violence led to the displacement of nearly a million refugees, as well as a public health crisis that included epidemics of malaria, diphtheria and other preventable diseases. Malaria is not usually considered a health risk in temperate climates, but seasonal epidemics were widespread throughout the Caucasus in the early decades of the twentieth century. This paper combines qualitative historical research with geospatial analysis to explore how endemic malaria was controlled during the Soviet era, and how ethnic conflict reconfigured local ecologies to facilitate the re-emergence of P. vivax after the Soviet collapse in the 1990s. This research reveals that ethnic conflicts have specific qualities that increase risks of infectious and vector borne disease outbreaks, even in places that have successfully achieved a modern health and mortality profile. The risk amplifiers of ethnic conflicts include 1) the creation of contested spaces controlled by separatists that are outside of any national public health surveillance system; 2) mass population movements and refugee outflows due to ethnic violence; and 3) changes in land use that expand potential mosquito breeding sites throughout the conflict zone. Continued hostilities between Armenia and Azerbaijan, combined with the repopulation of key vector species (specifically An. sacharovi) lead us to conclude that populations in the Caucasus remain vulnerable to resurgent outbreaks of ethno-nationalist violence as well as the return of seasonal malaria, even after decades of successful control.