Fifth Experts’ Meeting of the Joint

ENVIRONET-WP-STAT Task Team on

OECD Rio Markers, Environment and

Development Finance Statistics

November 4th, 2015

Valérie Gaveau and Gisela Campillo

OECD DAC Secretariat

Revised instructions for reporting

on the climate Rio markers

Proposal submitted to WP-STAT,

2-3 November,

DCD/DAC/STAT(2015)25

Outline

Revised definitions and guidance of climate Rio markers 1

Next steps 3

Outcome of WP-STAT Formal Meeting 2

Outline

Revised definitions and guidance of climate Rio markers 1

Next steps 3

Outcome of WP-STAT Formal Meeting 2

Revised definitions and guidance of climate Rio markers 1

Objectives of changes: • facilitate reporting on Rio markers to the DAC

• improve quality of reporting and harmonisation of reporting practices

• update terminology and enhance comparability with other tracking initiatives (MDB approach, IDFC)

Principles for revising: • no fundamental change in the definitions

• clearer instructions

• maintain flexibility to reflect evolving adaptation and mitigation practices

Discussions on definitions by the Task Team

• June 2014: Room document 5 -- initial proposals

• September 2014: Room document 10 -- refined proposals

• March 2015: meeting of a working group on definitions

• May 2015: Room document 15 -- full-fledged proposal

• June-July 2015: members’ written comments

• September 2015: Room document 15-REV -- revised version shared with members in writing for final comments by mid-September

• November 2015: proposal submitted to WP-STAT for approval -- DCD/DAC/STAT(2015)25

Process for elaborating the proposal

Summary of proposed revised instructions:

Former instructions Proposed revised instructions

Generic guidance on policy markers (Annex 17)

Add new generic guidance on Rio markers in Annex 18

Definition sheet – mitigation (Annex 18)

Keep definition and eligibility criteria unchanged, merge examples with the new indicative table

Definition sheet – adaptation (Annex 18)

Update definition and eligibility criteria, merge examples with the new indicative table

Add new indicative table to guide Rio marking by sector/sub-sector following CRS purpose codes

Background information on the UNFCCC (Annex 18)

Merge with new generic guidance

Frequently asked questions on Rio markers (Annex 18)

Merge with new generic guidance and indicative table.

NEW

NEW

NEW

Description of changes made since Room

Document 15:

• Reflect ongoing discussion on the marking of programmatic aid.

• Description of score “non-targeted” amended.

• Definition for adaptation adjusted to better align to IPCC latest definitions.

• Features of the methodology slightly adjusted to mention that the emphasis is on the objective pursued in providing support to the activity in question (instead of on the provider’s reasons).

• Changes and improvements to the guidance table

– Sectors and sub-sectors adapted to match CRS purpose codes (list for flows as of 2016)

– Examples improved, and scores adjusted based on numerous contributions by members, guidance from the MDB methodology and examples from the current CRS database.

– The suggestion to remove proposed scores on the ground that the proposals might be too strict was not taken on board as the proposed scores are intended to be informative and guiding, not prescriptive.

Description of changes made since

Room Document 15 – cont’d

• Double principal scoring kept as a possibility but only upon explicit justification in particular cases: opinion against double scoring by some members and observers

• For transparency in future statistical presentations, it will be of value to report on climate-related development finance support to high efficiency coal facilities separately from, and additionally to, the aggregate total estimates (in line with decision of the Technical Working Group on mobilising climate finance of 19 bilateral donors )

Mitigation definition sheet: keep definition and eligibility criteria unchanged – Annex 18

DEFINITION

An activity should be

classified as climate-change-

mitigation related (score

Principal or Significant) if:

It contributes to the objective of stabilisation of greenhouse gas (GHG) concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system by promoting efforts to reduce or limit GHG emissions or to enhance GHG sequestration.

CRITERIA

FOR ELIGIBILITY

The activity contributes to a) the mitigation of climate change by limiting anthropogenic

emissions of GHGs, including gases regulated by the Montreal Protocol; or

b) the protection and/or enhancement of GHG sinks and reservoirs; or

c) the integration of climate change concerns with the recipient countries’ development objectives through institution building, capacity development, strengthening the regulatory and policy framework, or research; or

d) developing countries’ efforts to meet their obligations under the Convention.

The activity will score “principal objective” if it directly and explicitly aims to achieve one or more of the above four criteria.

Adaptation definition sheet: modernise language in the definition – Annex 18

DEFINITION

An activity should be classified as adaptation-related (score Principal or Significant) if:

It intends to reduce the vulnerability of human or natural systems to the impacts of climate variability and change and climate-related risks, by maintaining or increasing adaptive capacity and resilience, through increased ability to adapt to, or absorb, climate change stresses, shocks and variability and/or by helping reduce exposure to them.

This encompasses a range of activities from information and knowledge generation, to capacity development, planning and the implementation of climate change adaptation actions.

Changes to the adaptation definition

Based on IPCC definitions and members’ comments:

• Adaptation covers interventions targeted at adapting

to both current climate variability and expected

future climate change

=> Definition now includes adaptation to “climate

variability and change” instead of adaptation to

“climate change and climate-related risks”

However: MDBs question if climate variability widens

the eligibility criteria beyond climate change adaptation

Adaptation definition sheet: reference to context added to eligibility criteria – Annex 18

CRITERIA FOR ELIGIBILITY An activity is eligible for the climate change adaptation marker if:

a) the climate change adaptation objective is explicitly indicated in the activity documentation; and

b) the activity contains specific measures targeting the definition above. Carrying out an assessment of vulnerability to climate variability and change adaptation analysis, either separately or as an integral part of agencies’ standard procedures, facilitates this approach. To guide scoring, a three-step approach is recommended as a “best practice”, in particular to justify for a principal score: Setting out the context of climate vulnerability/exposure of the

project; Making an explicit statement of intent to address climate

vulnerability/exposure as part of the project; Articulating a clear and direct link between the climate

vulnerability/exposure context and the specific project activities.

Characteristics of guidance table

• Guidance – not binding rules on marking against the climate Rio markers by sector

• Sector/CRS purpose codes systematically included for clarity

• Possible scores for Mitigation and Adaptation

• Rationale for scoring

• Examples of qualifying activities in adaptation, mitigation and both

Example purpose code

Energy generation, renewable sources – 232

2 0 or 1

Renewable energy: The main objective of renewable energy production is typically to reduce GHG emissions, through project development or the creation of enabling environments for the development and dissemination of the skills and technologies necessary to expand renewable generation. The rationale for projects to qualify as mitigation is that, in the absence of the renewable energy construction/rehabilitation, high GHG emitting energy sources would be used. Not only are direct effects (e.g., observed emission reductions) taken into account, but also projected impacts on future emissions, i.e., changes in future GHG emission trajectories compared to reference case ("business as usual") scenarios. However, particular activities could score as significant in the adaptation marker in case of specific measures that take into account climate change impacts put in place and are therefore climate resilient., for example hydropower plants adapted to changed water flows would score 1 in adaptation.

Mitigation Wind energy, photovoltaic and concentrated

solar power (CSP), geothermal, biomass and biogas, combined cycle (combined heat and power), hybrid power, ocean power (mitigation score 1 or 2 if main objective).

Hydropower (storage or run-of-the-river) only if net emission reductions can be demonstrated. (mitigation score 1 or 2).

Activities in which existing power plants switch to lower emitting fuels (e.g., switching from coal to natural gas) (mitigation score 2).

Rural electrification with renewable energy (e.g. solar) (mitigation score 2).

Adaptation New hydro-power activity that takes into

account the impact of climate change on water resources and uses modern engineering techniques (adaptation score 1).

Optimizing hydropower generation and dam safety in the context of climate change vulnerability (adaptation score 1).

Sector /CRS

purpose codes

Mit

igat

ion

Ad

apta

tio

n

Rationale for scoring

Examples of qualifying activities The list is not exhaustive. The

activities may be scored against the objective only if the

eligibility criteria are fulfilled.

By descend

ing order of likeliho

od

Outline

Revised definitions and guidance of climate Rio markers 1

Next steps 3

Outcome of WP-STAT Formal Meeting 2

• Principles of the proposal approved

• Agreement to bring this work to closure before

the end of the year:

– finalise the definition of adaptation after discussion by

the Task Team on the MDBs’ concern in relation to the

concept of variability

– make more explicit that scores proposed in the

guidance table aim at facilitating scoring and are by

no mean prescriptive

Outcomes of WP-STAT Formal Meeting 2

Outline

Revised definitions and guidance of climate Rio markers 1

Next steps 3

Discussion at WP-STAT Formal Meeting 2

Next steps 3

• Final comments to be sent to the Secretariat by 20th November

• Subsequent written procedure for WP-STAT to approve a final version of the document

• Endorsement by the DAC before the end of the year

Discussion questions

• Any outstanding issue on the proposal, including

views on MDBs’ proposal regarding the adaptation

definition

• What supplementary guidance material and tools could be

made available to support the application of the Rio

markers?

• Should an online user-friendly format for the guidance table

be developed?

• In the context of continual developments across the

international community on climate finance definitions, is

there need for further harmonisation?

Thank you.