CD4CDM Project development assessment in Ecuador

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Ecuador facing the global carbon market
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CD4CDM Project development assessment in
EcuadorMarcos Castro R.CORDELIM CDM
Promotion OfficeThird Regional Workshop of the
UNEP/Risoe Centre Project CD4CDMAugust 19-20,
2004Santa Cruz de la Sierra, Bolivia
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National institutional setting for the CDM
CDM National Authority (DNA) Ministry for
Environment
CDM Promotion Office separate public-private
entity presided by Ministry for Environment
Regulation
Promotion
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CD4CDM in Ecuador Overall goals
CD4CDM in EC
Consolidation of DNA
National workshops intl CD events
Methodological issues additionality baselines
Climate regime negotiation process
Barriers related to carbon finance transaction
costs
Knowledge dissemination promotion tools
Assistance for project pipeline development
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Ecuadorian CDM National Authority / DNA
DNA
National legal frame for carbon trading
Evaluation approval system
National carbon offset policy
National registry follow-up
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Ecuadorian DNA

• The Ministry for Environment is Ecuadors
  Designated National Authority for the CDM (as per
  resolution of the National Climate Change
  Committee). The DNA technical coordination has
  been assigned to the Ministrys Climate Change
  Unit.
• The DNA adopted the procedures for national
  approval of CDM project proposals (emissions
  reduction projects), as per Ministerial Accord of
  April 2003.
• As well, it has adopted complementary procedures
  for (i) approval of small-scale CDM project
  proposals and for (ii) endorsement of CDM project
  ideas (emissions reduction carbon removal
  projects).
• Additional tools, including project submission
  guide (for project participants) and project
  assessment guide (for DNA evaluators) are being
  prepared. Ongoing internal discussion of draft
  versions.
• Policy note on sector priorities for CDM project
  implementation has been drafted and is also
  being discussed at the MoE (prior discussion
  adoption by NCCC).
• Focus power generation, waste management,
  transportation sector.
• Notwithstanding, it just encompasses
  cross-references to broad policy goals
  established in existing frame of relevant laws
  and sector plans.
• Other ongoing activities (? see next workshop
  presentation)

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Ecuadorian DNA ongoing policy-making processes

• By means of participatory processes with relevant
  decision-making entities, the DNA is currently
  assessing further key topics aiming at enhancing
  local environment for CDM implementation
• Policy note on sector priorities for CDM project
  implementation has been drafted and is also
  being discussed at the MoE (prior discussion
  adoption by NCCC).
• Focus power generation, waste management,
  transportation sector.
• Notwithstanding, it just encompasses
  cross-references to broad policy goals
  established in existing frame of relevant laws
  and sector plans.
• Clarification of applicable legal frame for CERs
  transactions and CDM/carbon offset project
  investments
• bearing in mind the need to warrant underlying
  long-term commitments and to provide risk
  mitigation support for project participants.
• Relevant national decisions for carbon
  sequestration projects, once the UNFCCC Rules
  Modalities for CDM forestry projects have been
  adopted.

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National CDM Promotion Office - CORDELIM
CORDELIM
Advise to policy-makers
Support to project development
Technical commercial assistance
Capacity building activities
Information knowledge dissemination
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Role of the CDM Promotion Office
Overall key function facilitate network of
specialists/institutions provide a local
resource platform, in order to develop the carbon
market in EC.
National CDM Office / CORDELIM
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Knowledge dissemination promotion tools

• CORDELIM has managed to position itself as a
  local resource centre on carbon offset trading.
• Basic implementation of CORDELIMs website
  general information key documents on carbon
  market CDM issues indicative project
  portfolio online requests. Other online services
  yet to be implemented.
• Systematization of electronic document centre (
  CDM guides, carbon market intelligence, PDD case
  studies, etc). Conventional modalities for
  dissemination of information.
• Simplified project development guides drafted
  (power generation, reforestation, waste
  management), but final technical review pending.
• Installed tools skills for organization of
  basic workshops on request of local institutions.
  As well, conferences presentations in diverse
  local events are permanently arranged.
• Overall, daily business involves attention to
  general requests of a broad range of diverse
  stakeholders

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Methodological issues additionality baselines

• Technical notes on additionality baseline
  issues
• Analytical follow-up of CDM-EB Meth Panel
  working plan on methodologies
• Meth Panel member Desk reviewer are directly
  involved in CORDELIM
• Participation in discussions on sector baseline
  development
• Power generation sector baseline development by
  CFB/BM
• LULUCF sector facilitation of working group
• Consolidated methodologies (currently proposed by
  Meth Panel)
• Preliminary assessment of their application in
  the Ecuadorian context
• Guidance for application of simplified meths for
  small-scale projects
• Recommendations on barrier assessment matrix
• Recommendations on ex-ante emission factors
• Overall direct assistance to project developers
  on meth issues

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Barriers related to carbon finance transaction
costs
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Establishment of institutional alliances
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National workshops intl CD events

• Milestones 1st half-year 2004
• National Workshop on Enabling Activities for the
  CDM (Quito, February 10th-12th)
• DNA procedures ? SD evaluation
• Enabling legal framework (national scope)
• Barriers for project finance carbon finance
• Need for local capacity in carbon management
  services
• CDM Project Development Course bioenergy
  reforestation (Quito, March 1st-5th)
• CORDELIM PROFAFOR, with support of Ministry for
  the Environment, CD4CDM, ENCOFOR, IAI, GTZ,
  InterCooperation.
• 40 participants energy forestry sector.
• Latin American CDM Offices Workshop (Lima, May
  5th-7th)
• Andean CDM Offices, with support of PLAC/CAF.
• Informal establishment of LA CDM Offices Network
• Technical mission at CarbonExpo 2004 (Koeln, June
  8th-11th)
• Preparation, participation, follow-up country
  profile project portfolio.

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Assistance for project pipeline development

• PIN CORDELIM ? submission of projects
• On request of project sponsors developers,
  provision of assistance along early stages of the
  carbon upgrading project cycle.
• Technical tutorials on CDM project cycle and
  related issues, provision of updated information
  on carbon funds/brokers, drafting of project
  concept notes, review of ToR, others.
• Consolidation of network of demand-side actors
• Handling of Indicative CDM Project Portfolio
  updated profiles/PINs of projects and project
  initiatives (primarily, power generation sector
  and land-use forestry sector), that are seeking
  incorporation of carbon finance component.
• Ground laying activities targeting (public)
  developers of project activities in other
  eligible sectors (waste management,
  transportation), since awareness on carbon
  finance opportunities ( challenges) still
  incipient.

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Indicative Project Portfolio power generation

• Renewable energy projects
• At least final technical design in progress PDD
  being developed
• 15MW lt x lt 50MW 3 hydro total capacity 43 MW
  estimated emission reductions 307.000
  tonCO2eq/year.
• Small-scale (lt15MW) 1 hydro, 1 wind total
  capacity 25,3 MW estimated ER 89.600
  tonCO2/year.
• At least feasibility study concluded ER
  potential assessed
• 15MW lt x lt 50MW 2 hydro, 1 wind, 1 bagasse
  (sugar cane) total capacity 88 MW.
• Small-scale (lt15MW) 7 hydro, 1 hybrid
  eolic/diesel, 1 LFG. total capacity 67 MW.
• Other project initiatives that look forward to
  carbon-upgrading

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Indicative Project Portfolio land-use change
forestry

• Reforestation/afforestation projects (? CDM
  eligible activities)
• Projects with specific carbon sequestration
  assessment 4 projects overall 24.000 hectares
• Additionally, some project initiatives are
  assessing carbon management feasibility (PINs).
• Other forestry projects (? parallel market,
  non-Kyoto compliant).
• with specific carbon conservation assessment 2
  projects overall 30.000 endangered hectares
• Additionally, some project initiatives are
  assessing carbon management feasibility (PINs).
• 2 AIJ forestry projects have been implemented and
  verified relevant experienced acquired.

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Carbon offset opportunities urban development

• Waste management projects
• Project being designed interest in
  incorporating carbon offset component
• Project being reengineered, but ER potential not
  yet addressed
• Transportation projects
• Project being designed interest in
  incorporating carbon offset component
• Project being developed, but ER potential not yet
  addressed

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Issues

• Large work load due to its nature, National CDM
  Promotion Office has to address permanent
  tasks/functions and emerging requests from a
  broad range of local and international
  stakeholders, which go by far beyond elaboration
  of specific target products.
• Long processing times due to necessary
  coordination with decision-maker and
  administrative levels at Ministry for
  Environment.
• Weak critical mass for straight-forward
  development of more specific tasks/issues
  despite existence of significant overall
  knowledge on carbon market opportunities (and
  partially oversized expectations).
• Project developers/sponsors and other national
  stakeholders seek assistance from the CDM
  Promotion Office on aspects regarding project
  finance (as distinct from carbon finance) and
  project marketing, rather than on aspects related
  to technical and methodological issues of carbon
  component development.
• Analytical work on methodologies should be
  focused on application/adjustment of already
  approved meths and other existing methodological
  guidance of the CDM Executive Board (as distinct
  of development of innovative conceptual
  methodological approaches).

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More information

• National CDM Promotion Office (CORDELIM)
• www.cordelim.net , e-mail info_at_cordelim.net
• CDM Designated National Authority
  www.ambiente.gov.ec/cdm-dna (to be launched)