Tenders: an option for developing countries to support renewable energies under the CDM

Abstract

Renewable energy sources are generally considered as an important tool on the way towards sustainable development. However, if developing countries want to actively promote renewable energies, they may need to face the problem that current legislation conflicts with the clean development mechanism (CDM) rules, and especially with the additionality concept. Thus, CDM projects may become impossible to implement. This article presents an approach to overcoming these potential difficulties. One solution lies in offering a tender specifically for RE-CDM-projects.     

Developing country perspectives on ‘mitigation actions’, ‘NAMAs’, and ‘LCDS’

The MAPS programme, which seeks to deepen mitigation ambition in developing countries, is engaged in exploring the concepts of Nationally Appropriate Mitigation Actions (NAMAs) and Low Carbon Development Strategies (LCDS) from a developing country perspective. Here, climate mitigation practitioners in six developing countries were surveyed for their understanding of these concepts (anonymous, personal communications with climate mitigation practitioners in Argentina, Brazil, Chile, Colombia, India, and South Africa). It is found that there is much scope for clarity and conceptual elaboration in this policy space. NAMAs are largely interpreted as mitigation activities packaged for submission to the United Nations Framework Convention on Climate Change (UNFCCC) registry, but are not held to constitute the full set of mitigation activity in a developing country. New terminology may be needed to describe this broader set. A tighter interpretation of LCDS to distinguish between a strategic or coordinating policy action may be useful. Other themes arising include the way ‘national appropriateness’ is reflected in the concepts, and the role of international policy in deepening mitigation action in developing countries.     

Climate mitigation finance across developing countries: what are the major determinants?

This empirical study assesses the relationship between the characteristics of developing countries and the amount of official climate mitigation finance inflow. A two-part model and robustness checks were used to analyse 1998–2010 Rio Marker data on 180 developing countries. The results show that developing countries with higher CO₂ intensity, larger carbon sinks, lower per capita gross domestic product (GDP) and good governance tend to be selected as recipients of climate mitigation finance, and receive more of it. CO₂ emission is not used as a determinant of mitigation finance until the actual financial disbursement. Poverty aid tends to be allocated to countries with low CO₂ emissions, possibly to avoid diverting aid from poorer developing countries. However, such a diversion is unavoidable if the share of mitigation finance in climate finance and in overall official development assistance (ODA) continues to escalate. This study calls for an equitable allocation of total ODA mitigation and adaptation finance in addition to the 0.7% ODA/gross national income target, and for transparent criteria and the verification of reporting on the allocation of mitigation finance.     

Delivering the two degree global climate change target using a flexible ratchet framework

Global climate negotiations have been characterized by a divide between developed and developing nations – a split which has served as a persistent barrier to international agreement within the United Nations Framework Convention on Climate Change process. Notable progress in bridging this division was achieved at the 21st Conference of the Parties meeting in Paris through the introduction of Intended Nationally Determined Contributions (INDCs). However, the collective ambition of submitted INDCs falls short of a global 2°C target, requiring an effective ratchet mechanism to review and increase national commitments. Inequitable distribution of additional responsibilities risks re-opening historic divisions between parties. This article presents a flexible ratchet framework which shares mitigation commitments on the basis of per capita equity in line with emerging requirements for a 2°C target. The framework has been designed through convergence between developed and developing nations; developed nation targets are based on an agreed standardized percentage reduction wherever emissions are above per capita equity; developing nations are required to peak emissions at or below per capita equity levels by an agreed convergence date. The proposed framework has the flexibility to be integrated with current INDCs and to evolve in line with shifting estimates of climate sensitivity.

Policy relevance

The outcome of the 21st Conference of the Parties (COP21) negotiations in Paris offered mixed results in terms of level of ambition and submitted national commitments. A global agreement to keep average global temperature rise below two degrees was maintained; however, current pledged Intended Nationally Determined Contributions (INDCs) are projected to result in an average warming of close to three degrees. The implementation of a global ratchet mechanism to scale-up national commitments will remain key to closing this ambition gap to reach this two degree target. How this upscaling of responsibility is shared between parties will be a defining discussion point within future negotiations. This study presents a standardized, equity-based framework for how this ratchet mechanism can be implemented – a framework designed to be flexible for evolution in line with better understanding of climate sensitivity, and adaptable for integrations with current INDC proposals.     

The leaky sink: persistent obstacles to a forest carbon sequestration program based on individual projects

Abstract

One strategy for mitigating the increase in atmospheric carbon dioxide is to expand the size of the terrestrial carbon sink, particularly forests, essentially using trees as biological scrubbers. Within relevant ranges of carbon abatement targets, augmenting carbon sequestration by protecting and expanding biomass sinks can potentially make large contributions at costs that are comparable or lower than for emission source controls. The Kyoto protocol to the framework convention on climate change includes many provisions for forest and land use carbon sequestration projects and activities in its signatories' overall greenhouse gas mitigation plans. In particular, the protocol provides a joint implementation provision and a clean development mechanism that would allow nations to claim credit for carbon sequestration projects undertaken in cooperation with other countries. However, there are many obstacles for implementing an effective program of land use change and forestry carbon credits, especially measurement challenges. This paper explains the difficulty that even impartial analysts have in assessing the carbon offset benefits of projects. When these measurement challenges are combined with self-interest, asymmetries of information, and large numbers, it prevents to a project-based forest and land use carbon credit program may be insurmountable.     

Sustainable development policies and measures: institutional issues and electrical efficiency in South Africa

An innovative approach is introduced for helping developing countries to make their development more sustainable, and also to reduce greenhouse gas (GHG) emissions as a co-benefit. Such an approach is proposed as part of the multilateral framework on climate change. The concept of sustainable development policies and measures (SD-PAMs) is outlined, making clear that it is distinct from many other approaches in starting from development rather than explicit climate targets. The potential of SD-PAMs is illustrated with a case-study of energy efficiency in South Africa, drawing on energy modelling for the use of electricity in industry. The results show multiple benefits both for local sustainable development and for mitigating global climate change. The benefits of industrial energy efficiency in South Africa include significant reductions in local air pollutants; improved environmental health; creation of additional jobs; reduced electricity demand; and delays in new investments in electricity generation. The co-benefit of reducing GHG emissions could result in a reduction of as much as 5% of SA's total projected energy CO₂ emissions by 2020. Institutional support and policy guidance is needed at both the international and national level to realize the potential of SD-PAMs. This analysis demonstrates that if countries begin to act early to move towards greater sustainability, they will also start to bend the curve of their emissions path.     

Technology transfer by CDM projects

Abstract

Technology development and transfer is an important feature of both the United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol. Although the Clean Development Mechanism (CDM) does not have an explicit technology transfer mandate, it may contribute to technology transfer by financing emission reduction projects using technologies currently not available in the host countries. This article analyses the claims about technology transfer made by CDM project participants in their project design documents. Roughly one-third of all CDM projects, accounting for almost two-thirds of the annual emission reductions, involve technology transfer. Technology transfer varies widely across project types and is more common for larger projects and projects with foreign participants. Equipment transfer is more common for larger projects, while smaller projects involve transfers of both equipment and knowledge or of knowledge alone. Technology transfer does not appear to be closely related to country size or per-capita GDP, but a host country can influence the extent of technology transfer involved in its CDM projects.     

Action targets: a new approach to international greenhouse gas controls

Abstract

This article introduces and explores a new form of international commitment to limit greenhouse gas (GHG) emissions, called an action target. Action targets differ from other forms of targets, such as the Kyoto Protocol's fixed targets, in that they define a quantity of GHG abatement to be achieved, rather than a future emission level to be reached. This article explains the basic mechanics of how action targets might operate, and analyses the approach across a range of criteria, including uncertainty management and contributions to sustainable development in non-Annex I (developing) countries. The analysis suggests that action targets might improve the prospects of widening and deepening developing country participation in the international climate regime.     

Clean development mechanism: leverage for development?

Abstract

The objective of this paper is to show that the investments through the clean development mechanism (CDM) can exert a leverage effect to (i) make attractive to developing countries non-binding commitments and the adoption of national policies and measures; this comes as a guarantee of non-conditionally of the mechanism to strictly environmental concerns and (ii) create a flow of additional investments and technological transfer from Annex B countries to non-Annex B countries.

The Indian power sector has been chosen as an example of a sector where institutional barriers, market imperfections, and tariff distortions create a great space for Pareto improvements and leave an important potential for no-regret measures: technological transfer, air conditioned systems, transport infrastructures and removal of subsidies on consumption.

This paper presents a micro-economic formalisation on (i) the evolution of profitability of current emitting technologies used in the power sector under the adoption of national policies and measures and (ii) the impact on renewable energy technologies competitiveness of emission credits in the context of CDM. This formalisation has been developed to enable quantitative simulation. A first exercise using the Markal model (used in 77 countries) on the electric sector in India enabled us to simulate the leverage effect of emission credits on additional incomes taken as a proxy for development.     

Perverse incentives under the CDM: an evaluation of HFC-23 destruction projects

The clean development mechanism (CDM) under the Kyoto Protocol allows industrialized countries to use credits from greenhouse gas (GHG) abatement projects in developing countries. A key requirement of the CDM is that the emission reductions be real, measurable and additional. This article uses data from registered projects to evaluate the extent to which these objectives are met by projects that reduce hydrofluorocarbon-23 (HFC-23) emissions in the production of hydrochlorofluorocarbon-22 (HCFC-22). The data show that HCFC-22 plants produced significantly less HFC-23 during periods when no emission credits could be claimed compared with periods when HFC-23 destruction could be credited under the CDM. Moreover, the total amount of HCFC-22 produced appears to be determined mainly by CDM rules. This suggests that the claimed emission reductions may partly not be real and that the CDM provides perverse incentives to generate more HFC-23. The accelerated phase-out of HCFCs under the Montreal Protocol on Substances that Deplete the Ozone Layer could worsen this situation. To address these issues an ambitious emission benchmark for the baseline HFC-23 emissions is proposed.