CAPACITY DEVELOPMENT FOR THE CLEAN DEVELOPMENT MECHANISM PROJECT CYCLE IN THE PHILIPPINES

CAPACITY DEVELOPMENT FOR THE

CLEAN DEVELOPMENT MECHANISM PROJECT CYCLE

IN THE PHILIPPINES

Roberto C. Yap, S.J., Ph.D.

Climate Change Information Center

Ateneo de Manila

Benefits of CDM• Assists developing countries (non-Annex

I) in meeting their sustainable development objectives.Host countries benefit in the form of

investment, access to cleaner technology, and local sustainable development.

• Enables developed countries (Annex I) to meet their emission reduction commitments in a flexible and cost-effective manner.Investors benefit by obtaining GHG

emission reduction credits (Certificate of Emission Reductions -- CER).

Capacity Development

Task: Information Campaign and

Awareness-Raising• Objective: Sensitize relevant

stakeholders on the benefits of CDM and encourage their participation.

• Indicator: Agreement by relevant stakeholders to participate in a CDM capacity building program.


Task: Information Campaign and

Awareness-RaisingSome proposed activities:• Information materials (e.g. primers,

brochures, guidebooks)• Public briefings, roundtable discussions• Philippine CDM website


Task: Information Campaign and Awareness-Raising

Examples of activities:• Orientation seminar on the Clean

Development Mechanism, organized by the Inter-Agency Committee on Climate Change, 9th October 2002

• CDM Conference, sponsored by AIM Policy Center, DoE, DENR, 4th December 2002


Task: Capacity Development for Senior National Policy-Makers

• Objective: Sensitize senior level policy makers on the benefits of CDM and generate their support for Philippine participation.

• Indicators: Agreement by senior level government officials to participate in a CDM capacity building program; CDM Champions; existence of senior-level cross-departmental coordinating body.



Need cabinet-level CDM Champions:• For Philippine ratification of Kyoto Protocol• For setting up CDM Operational

Framework• For establishing CDM National Authority• For establishing CDM National

Investments Promotion Office



Some proposed activities:• Executive briefings for cabinet-level

officials• Executive summaries of CDM benefits• Workshops on CDM Framework for

cabinet-level officials


Task: Capacity Development for

Senior National Policy-Makers

Example of activity:• Executive briefing on CDM for

Department of Energy senior officials, 11th October 2002


Task: Capacity Development for Mid-Level Policy-Makers

• Objective: Develop the capacity among mid-level policy makers to formulate a regulatory (legal, financial, technical) framework for CDM.

• Indicator: Existence of a cadre of mid-level policy makers and government representatives to support the CDM framework.



Some proposed activities:• Capacity assessments of key

departments & agencies• Training materials on regulatory,

technical & legal requirements• Workshops for formulating CDM

Operational Framework which is transparent, streamlined, fast-track, cost-effective



Example of activities• Meetings of the Inter-Agency Committee

on Climate Change (composed of DENR, PAGASA, DoE, DFA, DPWH, DTI-BOI, DoTC, NEDA, Phil. Network for Climate Change)

CDM Project Cycle Project Identification Project Formulation

Baseline Definition

CDM Validation

Project Financing andFinancial Closure

Project FinancedProject Implementation and Operation

ER Monitoring/Reporting

ER Verification

ER Certification

CER

Project Validated

Project developers

ER Prospectors

Green companies

Green .NGOs

National Development Agencies

Bilaterial/Multilateral Development Agencies

Project identification

Project formulation

Rules for CDMCountry participation?Project acceptanceCost effectivenessRisks / ER benefits

Project identification and formulation

Proposed CDM Project

DecisionsKey Actors/Stakeholders Relevant Issues


Task: Capacity Development for Project

Developers• Objective: Strengthen the capabilities of

private and public sector, big and small scale project developers to identify, formulate, develop and implement CDM projects.

• Indicators: Existence of private and public sector, big and small scale project developers who are committed to developing and implementing CDM projects; existence of CDM project brokers at the national level.


Task: Capacity Development for Project

DevelopersSome proposed activities:• Public briefings on CDM Benefits • Seminars/Workshops:

CDM Operational Framework Project Design Document Baseline Formulation GHG Accounting Monitoring Plan Formulation CDM Financial Packaging


Task: Investment Promotion for CDM

Projects• Objective: Support the establishment of a

national office that will promote investments in CDM projects.

• Indicator: Existence of a functioning National CDM Investment Promotion Office that serves as a link among private, public and the financial sectors in the development and financing of CDM Projects.


Task: Investment Promotion for CDM Projects

Some proposed activities:• Establish CDM Investment Promotions

Office• CDM Investment Guide• CDM Market Forums (National & Asian)• Assistance for Feasibility Studies• CDM Investment Missions

Baseline Definition

Key Actors/Stakeholders Proposed

CDM Project

Relevant Issues

CDM Executive Board

National Planning Agency

Sectoral Planning Agencies

Project Developers

Project Investors

ER Buyers

Technical/Emissions/Financial

Baseline Definition

Emissions additionality

Financial additionality

Baseline definition approach

-Project specific

-Technology matrix

-Benchmarks

CDM Validation


Task: Capacity Development for NGOs, Local

Communities, Academe, Research Institutions

• Objective: Strengthen the capabilities of NGOs, local communities, academe and research institutions to identify, formulate, develop and implement CDM projects.

• Indicator: Existence of players who can assist and facilitate the process of identifying, developing and implementing CDM projects.


Task: Capacity Development for NGOs, Local Communities,

Academe, Research InstitutionsSome proposed activities:

• Consultations with local communities on Cleaner Technologies

• Seminars/Workshops on: Overview of CDM; CDM Project Cycle Project Design Document Baseline Formulation GHG Accounting Monitoring Plans


Task: Capacity Development for NGOs, Local Communities,

Academe, Research Institutions

Examples of activities:• Roundtable discussion on CDM, sponsored

by the Philippine Network on Climate Change & WWF-Philippines, 17th September 2002

• Consultation on Entities which can validate, monitor, and certify CDM projects, sponsored by Climate Change Information Center, 12th November 2002

Key Actors/Stakeholders

Relevant IssuesDefined Baseline

CDM Project Validation

Project Financing

Host Country National CDM Board

Validation Agents

Project Developers

Project Investors

ER Buyers

Meets National Objectives

Contributes to Sustainable Development

Real, Measurable and Long-Term Benefits

Meets Additionality Criteria

Acceptable Process for MRV

Validation of CDM Projects


Task: Capacity Development for CDM National Authority

• Objective: Support the establishment of a national and institutional framework to assess and validate CDM projects; that also facilitates monitoring, verification and certification of emission reductions.

• Indicator: Existence of a functioning CDM National Authority that validates CDM projects using national guidelines (e.g. on sustainable development) & international guidelines (e.g. on additionality, baselines).



• Specific project on developing the institutional, operational and regulatory framework for CDM; including establishment of the CDM National Authority

• Project conducted by the Inter-Agency Committee on Climate Change

• Project sponsored by the UNDP and funded by the Dutch Government



Some proposed activities:• Assist NA to define regulatory, legal,

technical and financial guidelines for CDM projects

• Assist NA to set clearly defined national, sectoral, project baseline parameters for CDM projects

• Training Workshops for NA staff for validation, monitoring, verification and certification of emission reductions


Task: Creating a Pipeline of CDM-eligible Projects

• Objective: Create a pipeline of CDM-eligible projects that are attractive to potential CDM investors and that are approved by the CDM National Authority.

• Indicators: List of CDM-eligible projects that have been nationally endorsed and validated; number of investments made in CDM projects.


Task: Creating a Pipeline of CDM-eligible Projects

Developing an actual CDM project as the best way of building capacity.

Some proposed activities:• Technical assistance to identify and

develop CDM projects• Assistance to identify and source

funding for CDM projects• Published national portfolios of

validated CDM eligible projects

Key Actors/Stakeholders

Relevant Issues

Project Validated

Project Financingand

Financial Closure

Project Implementationand

Operation

Project Developers

Equity Holders

Investors

Banks

Buyers of Project Outputs

Project Owners/Operators

ER Purchase Agreements

Financial Recourse

Legal Recourse

Project Risks

Flow of Funds/Revenues

Auditing/Monitoring

Operational Data/Records

Reporting

RequirementsGeneration of ERs

Financing and Implementation of CDM Project



Project Financiers• Objective: Strengthen the capabilities of

the financial sector to identify and provide financing for CDM projects.

• Indicators: Existence of players from private and public financial institutions who are committed to the process of identifying and financing CDM projects; active market for CDM projects and their CERs; active financial brokers.



Project FinanciersSome proposed activities:• Seminars on CDM opportunities for the

financial sector• Forums on the range of funding sources

for CDM projects• Forums on the range of financial schemes

and packages for CDM projects



Project FinanciersExamples of activities:• Executive briefing on CDM for DBP senior

officials, 7th October 2002• Seminars on CDM for DBP mid-level

officials from head office, regional offices and branches; October - November 2002

Key Actors/Stakeholders Relevant Issues

Project Owners

Host CountriesMonitoring AgentsER Sellers

Verification Agents

Annex 1 PartiesER Buyers

Certification AgentsCDM Executive BoardCER RegistryCER MarketingParticipantsUNFCCC-COP

MonitoringRules/ GuidelinesApproval of AgentsChanges in Baselines

VerificationRules/ GuidelinesApproval of AgentsVerification of Baselines

Certification Rules/ GuidelinesCosts of MRVCRegistration and Tracking of CERsCDM Administrative Costs


ER Verification

ER Certification

CER

Monitoring, Verification and Certification of Emission Reductions

Decisions Relevant Issues

Project IdentificationProject Formulation

Project Developers

ER ProspectorsGreen Companies/NGOsER FundsNational AgenciesBilateral/Multilateral Development Agencies

Rules for CDM ?Country Participation?Project AcceptanceCost EffectivenessRisks / ER Benefits

Baseline Definition

CDM ValidationHost Country CDM Agency

Validation Agents

Project Developers andEquity Holders

Investors and Banks

National ObjectivesSustainable Development Additionality CriteriaRegistration of ValidationEstimate of ERsER Purchase AgreementLegal RecourseProject RisksFlow of Funds

Project Financing andFinancial Closure

Project Financed

Project Owners/Operators Project Implementationand Operation


ER Verification

ER Certification

CER

Host CountriesMonitoring AgentsER Sellers

Verification AgentsAnnex I PartiesER Buyers

CER Market Participants

Monitoring Rules/GuidelinesApproval of AgentsChanges in Baseline Conditions

Verification Rules/ GuidelinesApproval of Agents

Key Actors

Certification AgentsCDM Executive BoardCER Registry

Certification Rules/GuidelinesCosts of MRVCOther Costs

Emissions additionalityFinancial additionalityTechnology matrixBenchmarksProject Specific

Project Validated

Capacity Development Tasks

1. Information campaign & awareness raising

2. Capacity development for senior policy-makers

3. Capacity development for mid-level policy-makers

4. Establishment of the CDM National Authority

5. Capacity development for the CDM National Authority

Capacity Development Tasks

6. Capacity development for CDM project developers

7. Capacity development for CDM project financiers

8. Capacity development for NGOs, local communities, academe, research institutions

9. Investment promotion for CDM projects10.Creating a pipeline of CDM-eligible

projects

Capacity Development Tasks Multi-year (2003-2005) Work Plan for

Capacity Development for CDM in the Philippines

Work Plan to be implemented by the Inter-Agency Committee on Climate Change

Implementation of Work Plan to be managed by the Climate Change Information Center, Manila Observatory, Ateneo de Manila

Preparation and Implementation of Work Plan sponsored by the UNEP Collaborating Centre for Energy and Environment

Maraming Salamat!

Roberto C. Yap, S.J., Ph.D.Environmental EconomistClimate Change Information CenterManila ObservatoryAteneo de Manila UniversityLoyola Heights, Q.C.Tel +63 2 426-6144Fax +63 2 [email protected]

mailto:[email protected]

Documents

CAPACITY DEVELOPMENT FOR THE CLEAN DEVELOPMENT MECHANISM PROJECT CYCLE IN THE PHILIPPINES