Clean Development Mechanism and Poverty Reduction Developing a Regional Strategy for the CDM in Asia

1
Clean Development Mechanism and Poverty
ReductionDeveloping a Regional Strategy for the
CDM in Asia and the Pacific Region30-31 March
2006Bangkok

• Batu Krishna Uprety
• Chief, Environment Assessment Section
• Ministry of Environment, Science and Technology
• Kathmandu, NEPAL
• 30 March 2006, Thursday

2
Background UNFCCC and KP

• UNFCCC
• Signature 12 June 1992
• Ratification 2 May 1994
• Entry into force in Nepal 31 July 1994
• First INC Report prepared with GEF/UNEP
  assistance July 2004 and shared with Parties
• Kyoto Protocol
• Entry into force (global) 16 February 2005
• Deposition of instrument of Accession 16 Sept.
  2005
• Entry into force in Nepal 14 December 2005
• CDM
• Ministry of Environment, Science and Technology
  (MoEST) designated as DNA 22 December 2005
• Structure of DNA in progress

3
Policy Focus

• Tenth Plan (2002-07)
• Poverty reduction from 38 to 30 percent by 2007
• Main focus on high, sustainable and widened
  economic growth, development of social sector and
  rural infrastructures, targeted programmes, and
  good governance
• Carbon trade for resource management and for
  poverty reduction
• Implementation of sustainable development agenda
  for Nepal
• Promotion of the use of environment-friendly
  technologies, CP, energy efficiency, clean energy
  and EMS, adoption of PPP and pollution fees
• Promotion of clean and alternative energy in
  rural areas
• Implementation of MEAs including UNFCCC

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Priority Areas (2002-07)

• Agriculture, sustainable management of natural
  resource and biodiversity
• Development of rural infrastructures and rural
  energy (alternative/renewable energy)
• Population management, social service and basic
  social security
• Development of tourism, water resources,
  information technology and industries with
  private sectors involvement
• Human resources development and women empowerment
• Strengthening of local bodies, NGOs and CBOs
• Environment conservation and promotion etc.

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Responsibilities of Two Institutions

• Ministry of Environment, Science and Technology
• Formulation and implementation of environmental
  policies, plans, programmes, laws, and standards
• Study and research on environment
• Environmental management and pollution control
• Dissemination of environmental information,
  awareness creation, and HRD
• Monitoring of environment-related activities
• Focal point for MEAs including CDM activities and
  international organisations
• Alternative Energy Promotion Centre
• Promotion of clean and environment-friendly
  energy (biogas, micro-hydro, solar, wind)
• Improvement of rural people through energy supply
  social transformation, economic activities and
  poverty reduction - GHT abatement

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GHG Inventory of Anthropogenic Emissions
(1994/95) in Gg
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Possible Impacts of CC

• Western Nepal might receive more precipitation
  than Eastern Nepal due to climate change (reverse
  in the existing trend)
• About 20 of the glaciated area above 5000m will
  likely be snow and glacier free due to increase
  of air temperature by 10C
• About 70 of area above 5,000m will be affected
  due to about 40C rise in temperature
• Change in glacier areas development of glacier
  lakes resulting to increase in potentials of GLOF

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Possible Impacts of CC ..

• 50 increase in annual precipitation may lead to
  20 increase in sediment yield, land use
  remaining the same
• Warming effect will be significant in the
  sub-alpine and alpine regions, and vegetation
  could be pushed up to 500m.
• By the increase of 20C and 20 precipitation,
  possible extension of tropical and sub-tropical
  moist forest, change of sub-tropical and warm
  temperate dry forest to warm temperate moist
  forest, cool temperate moist forest to warm
  temperate moist forest etc.

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Development of Tso Rolpa Glacier Lake
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Recommendations in First INC Report

• Increase and conserve vegetative coverage to
  capture CO2
• Expand carbon sinks through afforestation,
  reforestation, enhanced regeneration and
  agro-forestry with community participation
• Upgrade technologies and promote use of efficient
  cooking stoves and lighting devices
• Introduce stringent emission control mechanisms
  for vehicles to reduce about 35 percent of GHG
  reduction by the year 2030
• Promote mass transportation (electric), and use
  less GHG intensive fuels
• Develop hydropower a clean energy as
  substitution for fossil fuels etc. etc.

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Potential Areas for CDM Projects in Nepal

• Prospects for clean energy investments
• Decentralized renewable energy micro-hydro,
  biogas, solar PV
• Hydropower
• Agriculture
• Forestry
• Solid Waste
• Cement, Brick and other Industries
• Fuel substitution from fossil fuels to clean
  electricity in transportation, industrial sector,
  residential sector, agriculture

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Ongoing CDM projects in Nepal

• Project CERs in 10 years Status
• Biogas Sector Partnership 6,200,000 PDD being
  Validated
• AEPC/REDP MHP Project 270,000 PDD being
  revised
• Improved Water Mil 136,000 PIN completed
• Solar Tuki 82,000 PIN being prepared
• Improved Cooking Stove 1,200,000 PIN being
  prepared
• Safa Tempo transportation 61,000 PIN being
  prepared
• Landfill Solid Waste Mgmt 174,000 PIN being
  prepared
• Vertical Shaft Brick Kiln 1,400,000 PIN being
  prepared
• Trolley Bus 131,000 Pre-feasibility completed
• Hydropower for export (WS) Pre-feasibility study
• Electric Train (E-W highway) Pre-feasibility
  study
• Community Forestry Studies ongoing

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Prospective Industries for CDM

• Brick Industries
• Cement industries
• Hotels
• Noodles factories
• Dyeing industries
• Dairy industries
• Metal steel industries
• Others

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Example Brick Industry
Bull Trench Brick Kiln
Vertical Shaft Brick Kiln
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CDM Status in Nepal

• Registered projects 2
• The biogas CDM projects
• Registered on 27 December 2005
• Net emission reductions over the first 7 year
  crediting period is 657,000 tons
• Project developer Alternative Energy Promotion
  Center (AEPC)
• Buyer Community Development Carbon Fund of World
  Bank at 7/t CO2

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Tentative costs of developing a CDM project

• Project Idea Note US 1,000
• Project Design Document US 20,000
• DNA Approval - ?
• Validation US 10,000
• Registration US 5,000 30,000
• Verification US 5,000 annually

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Proposed structure for DNA
Ministry of Environment, Science and Technology
(MoEST)
Steering Committee Chairman Secretary,
MoEST Members MOF, MFSC, MOLTM, MOAC, MOWR,
MOTCA, MLD Experts (2) (NGO, private, academic
and banking sectors) Member-Secretary
Joint-Secretary, MoEST
Secretariat of DNA Member-Secretary
(Joint-Secretary)
Desk Officer
Technical Advisory Committee
Environment Assessment Section
Environmental Standards and Monitoring Section
Environment Promotion and Awareness Section
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Proposed CDM Project Approval Process
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Areas of Concerns

• International Level
• Bringing GHG emitters under the umbrella of KP
• Defining commitment targets beyond 2012
• Minimising costs accrued from CC effects in low
  income countries/low GHG emitters
• Commitment of high GHG emitters for additional
  assistance to low income countries to bridge the
  resource gap
• Refining CDM investment procedures
• Making transparent and easy validation and
  approval process on CDM projects
• Preparatory costs for PIN and PDD and
  requirements for advance payment

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Areas of Concerns

• Regional Level
• Developing and implementing joint projects
• Replacing thermal power by clean energy
  (hydro-power)
• Generating data and information, and sharing
• Transferring clean technologies
• Developing regional voice with common
  understanding on regional issues
• National Level
• Awareness raising - opportunities
• Policy and strategy formulation and
  implementation
• Institutional set-up and strengthening
• HRD and support to resource gap

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Areas of Concerns

• Capacity building of
• Project developers negotiation skill
• Consultants, NGOs (Technical skill providers)
  developing Project Idea Note (PIN) and Project
  Design Document (PDD), cost vs. benefits
• Academic institutions
• Government (DNA, other ministries and
  departments) evaluation of PIN/PDD, decision
  time, and negotiation
• Transaction cost for CDM projects preparation and
  documentation
• Mainstreaming CDM in development planning

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Areas of Concerns

• Pre-investment to bridge resource gap
  (transferring costs after delivery of CER), and
  benefit sharing
• Funding large/small scale projects
• Targeting CDM projects in rural areas
• Promoting CDM projects in following sectors for
  poverty reduction
• Natural Resources
• Transportation
• Industries

Thank you very much