IN TIME FOR COMPLIANCE: GIS ROLE

oecc oficina Españolade cambio climático

IN TIME FOR COMPLIANCE:

GIS ROLE

Pedro Huarte-MendicoaSpanish Climate Change Office

17-19 March 2009Copenhagen, Denmark

Carbon Market Insights 2009


AGENDA:

1. SPAIN: COMPLIANCE SCENARIO & STRATEGY

2. INSTRUMENTS AND MEASURES FOR COMPLIANCE

3. VIEWS ON GIS MAXIMIZING BENEFITS OF GIS GIS AND JI POTENTIAL RISKS ASSOCIATED TO GIS

AGENDA


Spain: National Circumstances Decentralized administrative system High population and economic growth Emissions per capita below the EU-27 Significant increase in energy demand Significant increase in transport demand High external energy dependency

1. BASIC COMPLIANCE SCENARIO & STRATEGY

2006 first year of

decoupling of

emissions and GDP

growth


GHG emissions and compliance scenario

37%

15%17%

-10%

0%

10%

20%

30%

40%

50%

60%

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

Total GHGemissions

Kyototarget

Kyototarget &sinks

Kyototarget &sinks &Mex

Additional measures

KP credits

EU-ETS

Sinks

Kyoto pathway

1. BASIC COMPLIANCE SCENARIO & STRATEGY



Spanish Climate Change and Clean Energy Strategy, Horizon 2007-2012-2020

Plan of Urgent Measures (2007)• Total reduction of 270 Mt CO2 eq in the period 2008-2012. • 198 measures, 75 indicators• 11 action lines: Institutional cooperation; Flexible mechanisms;

International cooperation; Emissions trading; Sinks; CCS;

Sectors diffuse pollution; Adaptation; Information and Public

awareness; R+D+I; Horizontal measures• Action Plan 2008-2012 on the Strategy on Energy Efficiency

and Energy Savings


Sustainable mobility: Inter-urban transport Metropolitan areas Urban mobility Clean and efficient means of transport

Sustainable construction: New buildings Existing buildings Non-residential sector Equipment

Sustainable energy: Law on Energy Efficiency and Renewable Energy Review and updating of Energy Savings and Efficiency Plan

and Renewable Energy Plan CCS

Waste and manure management Forestry policy and sinks Innovation

Strategic lines to reduce GHG emissions:



Source: IDAE2007 data: provisional


Oil

48,0%

Natural gas

21,7%

Renewable

7,0%

Solar Thermoelectric

0,001%

Nuclear

9,7%

Electricity imports

-0,3%

Other wastes

0,3%

Hydro

1,6%

Wind

1,6%

Geothermal

0,01%

MSW

0,4%

Solar Thermal

0,1%

Liquid bio-fuels

0,3%

Biogas

0,2%

Biomass

2,9%

Solar P.V.

0,03%

Coal

13,7%

Contribution of RE to primary Contribution of RE to primary energy consumption, 2007energy consumption, 2007


Wind power installed in the E.U. at 31/12/2007 (MW)

22.245

15.09

5

3.125

2.725

2.455

2.390

2.150

1.745

4.565

TOTAL UE-27

56.495 MW

Fuente: EWEA e IDAE (para España)Datos Provisionales

0 2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000 18.000 20.000 22.000

OTHERS

HOLAND

PORTUGAL

U.K.

FRANCE

ITALY

DENMARK

SPAIN

GERMANY



+ 15% Kyoto Protocol objective + 2% LULUCF activities + 20% Flexible Mechanisms = 289Mt289Mt

+ 37 % 1990 emissionsRd 1370/2006, NAP 2 (2008-2012)

289Mt289Mt45% 45% PRIVATE SECTORPRIVATE SECTOR

55% GOVERNMENT PURCHASES55% GOVERNMENT PURCHASES



Financial instruments (CDM/JI):

World Bank: • Spanish Carbon Fund (I & II)• BioCF (I & II)• CDCF• CF Assist (*TA)

CAF: Latin-American Carbon Program EBRD – EIB:

• Multilateral Carbon Credit Facility (MCCF)• Green Fund (AAU-GIS)

ADB: Asia Pacific Carbon Fund IADB: SECCI (*TA)

GOVERNMENT: 55% (159,15 MtCo2e)


PRIVATE SECTOR: 45% (130,05 MtCo2e)

EU-ETS CDM/JI: Spanish DNA 89 LoA issued (122,6 MtCo2e )

Bilateral purchases (AAU-GIS):

First AAU-GIS with Hungary (2008)

Other AAU-GIS under development


Development Article 17 of KP (IET) Promoting GIS as a complementary mechanism to JI Achieving reliable and well-diversified GIS portfolio Fostering technology transfer (GHG mitigation) No 1/1 Greening Ratio requirement but preference for

hard greening, reliable structure and monitoring Priority sectors (mitigation):

• RE (Wind, Solar PV, Solar Thermal, Biomass, Biogas)• Cogeneration / Fuel switch• Municipal Solid Waste, biogas from sanitary landfills• Water treatment• Energy efficiency (residential, industrial)

3. VIEWS ON GIS

Spanish Government Objectives through GIS:


3. VIEWS ON GIS

Elements of a good GIS (our opinion):

Pre-condition of GIS: eligibility criteria for IET Solid preparation and submission of annual GIS PlanEarmarking of revenues through special budget fundDominance of hard (quantifiable) over soft (non quantifiable) greening.Flexible greening ratio, for different project type and crediting periodsAdditionality (legal and financial)Crediting period up to Dec 2015Funds disbursement (project start-up or milestone) before Dec 2012Mix of projects and programs (sectoral CDM, policy CDM) M&V: simple and imaginative methodologies (sampling)Thorough supervision (financial auditor and steering committee)


3. VIEWS ON GIS

GISJI (T2)

Kyoto rules Yes No

Approach Project Project & Programs

Experience of participants Increasing Limited

Contractual practice Standardized Bilateral

Market Broad Mainly governments

Secondary market Yes Limited (Ukraine, Japan)

Project financing No Yes

Use of funds Flexible Agreed

Technical assistance Limited Yes (% of funds)

M&V Stricter More flexible but difficult

Crediting period < 2013 Agreed

Additionality Test (strict) Financial / Technology

Energy efficiency Difficult Suited

Transaction costs (small scale) High Low

MAIN DIFFERENCES


3. VIEWS ON GIS

GIS: POTENTIAL RISKS

Delivery RiskI.e.: Lost of eligibility requirements

Track record on reporting• Monitoring of status (registry, inventories) • Contractual clauses (Events of Default, Remedies)• Payment on delivery

Greening RiskI.e.: Lack of readiness of projects

Solid GIS and M&V Plan (simple, transparent)• Contractual clauses (Technical Assistance)• Steering committee including Buyer, Seller & NGO• Independent, experienced GIS Operator & Verifier• IFI participation

Market /price riskI.e.: Change of market conditions after contract signature

• Fair price according to GIS• Price indexation

Political Risk I.e.: Change in target projects

• Law on Emissions Trading and tax on AAU• IFIs participation• Contractual clauses (Crediting Period, Investment Period, buy-back clause)• Earmarking of revenues• Promotion of technology transfer

POSSIBLE ACTIONS FOR RISK MITIGATION


THANK YOU / MUCHAS GRACIAS

Spanish Climate Change OfficeSecretariat of State for Climate Change

Ministry of the Environment, and Rural and Marine Affairs

http:/www.mma.es/oecc

[email protected]

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IN TIME FOR COMPLIANCE: GIS ROLE