SUSTAINABLE DEVELOPMENT INDICATORS for CDM Projects DENR Training Course November 4-6, 2003 Climate Change Information Center Manila Observatory Ateneo de Manila University

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SUSTAINABLE DEVELOPMENT INDICATORS for CDM
ProjectsDENR Training CourseNovember 4-6,
2003Climate Change Information CenterManila
ObservatoryAteneo de Manila University
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CDM Project

• Achieves Sustainable Development objectives for
  the host developing country
• Reduces GHG Emissions

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Sustainable development indicators

• We need indicators to evaluate the sustainable
  development impacts of a CDM project
• Possible source of SDI
• Philippine Agenda 21

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Philippine Agenda 21Action Agenda

• Per Ecosystem
• Forest/Upland Ecosystem
• Lowland/Agricultural Ecosystem
• Urban Ecosystem
• Coastal/Marine Ecosystem
• Freshwater Ecosystem
• Critical Resources
• Minerals/Mines
• Biodiversity

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Philippine Agenda 21Action Agenda

• Example Loss of Biodiversity
• Conduct an inventory of plant, animal and
  microbial resource
• Unification of the DOE Energy Plan with the NIPAS
  Program
• Establish and improve in-situ conservation
  facilities for wetland habitats

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Philippine Agenda 21Action Agenda

• Policy Agenda for Governance for Sustainable
  Development
• Ecosystems
• National and regional

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Contents

1. What is meant by sustainable development
2. How a CDM project can contribute to sustainable
   development
3. Economic impacts
4. Environmental impacts
5. Impacts on disadvantaged groups
6. Summary of CDM project impacts on sustainable
   development

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I. What is meant bysustainable development
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Bruntland Commission(World Commission on
Environment and Development, 1987)

• Source of the working definition to evaluate
  sustainable development impacts of CDM projects
• Bruntland Commission definition
• Much more focused and applicable to CDM projects
• Consistent with Philippine Agenda 21 definition

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Bruntland Commission(World Commission on
Environment and Development, 1987)

• Sustainable development is development that
  meets the needs of the present without
  compromising the ability of future generations to
  meet their own needs.

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Bruntland Commission(World Commission on
Environment and Development, 1987)

• It contains within it two key concepts
• the concept of needs, in particular of the
  worlds poor, to which overriding priority should
  be given, and
• the idea of limitations imposed by the state of
  technology and social organization on the
  environments ability to meet present and future
  needs.

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Bruntland Commission(World Commission on
Environment and Development, 1987)

• Sustainable development involves two obligations
• Obligation to the future
• Sustainability
• Obligation to the present
• Poverty alleviation

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Achieving Sustainable Development

• Sustainable development is about creating
  capacities for raising per capita well being,
  living standards, quality of life
• Capacities determined by the stocks of assets
  which can be converted to goods and services
  which contributes to well being

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Process of Development
Well Being Standard of Living Quality of Life
Goods Services
Assets
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Capital Assets

• K KM KN KH KS
• K ? Total Capital
• KM ? Manufactured Capital
• KN ? Natural Capital
• KH ? Human Capital
• KS ? Social Capital

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KM Manufactured Capital

• Equipment, machinery, factories, technology,
  infrastructure
• More capital equipment will, typically, raise the
  productive capacity of the population and hence
  their real incomes

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KN Natural Capital

• Environmental assets such as clean water and air,
  soil, forests, etc.
• More environmental assets in the form of clean
  water, clean air, biomass resources and improved
  soil will help to reduce the incidence of
  disease, raise agricultural productivity and
  ensure fuel supplies.

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KH Human Capital

• Education, health
• The more education there is, the better are the
  prospects for raising living standards, including
  health

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KS Social Capital

• Set of social relationships that hold communities
  together
• The more socially cohesive are communities, the
  more likely they are to organize themselves for
  the collective good

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Obligation to the Future

• Sustainability
• Sustainable development is about future well
  being
• Leave to future generations the capacity to be as
  well off as we are

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Obligation to the Present

• Sustainable development is about well being now
• It is about poverty alleviation
• The poor cannot raise their own well being
  without better provision of assets and technology

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II. How a CDM project can contribute to
sustainable development
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Types of CDM project impacts on sustainable
development

1. Economic Impacts
2. Environmental Impacts
3. Impacts on disadvantaged groups

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Economic impacts

• CDM project can contribute to sustainable
  development
• By providing gains to manufactured capital
• i.e. transfer of technology or building
  infrastructure, improving efficiency
• By improving social and human capital
• Through the creation of sustainable employment,
  the raising of living standards, the transfer of
  knowledge

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Economic impacts

• Direct impacts of CDM project
• Gains introduces new technology, builds capacity
• Loses restricts economically productive
  activities
• Indirect impacts of CDM project
• Gains stimulates greater economic activity or
  greater efficiency in other areas of production
• Loses other areas dependent on activity
  restricted by project

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Environmental impacts

• CDM project can contribute to sustainable
  development
• By improving on environmental assets
• e.g., by preserving biodiversity, improving local
  air quality
• By minimizing negative impacts on the environment

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Environmental impacts

• Aside from reduction of GHG emissions, a CDM
  project may have accompanying environmental
  impacts
• Because of the CDM project, environmental quality
  may improve or deteriorate
• These changes may result directly from the
  project or indirectly through the ramifications
  of the project elsewhere

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Impacts on disadvantaged groups

• CDM project can be judged consistent with
  sustainable development
• If the gains from the project be distributed in a
  manner which does not disadvantage the poor
• If the project helps alleviate poverty

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Impacts on disadvantaged groups

• Maximize the gains and minimize the loses
  experienced by the most disadvantaged groups
  (e.g., indigenous people, rural poor, landless
  farmers, etc)
• Impact on employment opportunities and incomes
  for the poor and disadvantaged
• Impact on traditional rights and social fabric of
  local communities

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III. Categorization of Economic Impacts
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Productivity gains

• Increase in productive efficiency
• CDM projects, especially those involving
  technology transfer or capacity building, may
  increase the efficiency in which the flow of
  goods and services can be produced
• E.g., supply side energy efficiency projects
• Exploitation of new productive possibilities
• CDM project introduces new productive
  possibilities
• E.g., waste-to-energy projects ash from rice
  husk for cement

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Productivity loses

• Reduced productive efficiency (output forgone)
• Productive processes may be changed or altered to
  reduce GHG emissions
• Such changes may reduce the productive efficiency
  with which output is generated
• E.g., changes in type of fertilizer used
• Productive possibilities foregone
• Project may displace or prohibit certain
  productive activities
• E.g., prohibition of certain land management
  practices

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Positive spillovers

• Efficiency gains
• Efficiencies demonstrated in the CDM project may
  encourage the adoption of the same new
  technologies and/or practices in similar
  activities
• E.g., end-use energy efficiency projects
• Complementary activities
• CDM project may encourage the expansion of other
  complementary activities
• E.g., reforestation and eco-tourism
• E.g., geothermal and hot springs spas

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Negative spillovers

• When a CDM project involves the restriction or
  prohibition of a productive activity then other
  economic activities dependent on the
  complementary activity may be adversely affected
• E.g., fuel switching from kerosene to solar
  technology may depress the demand for kerosene
  lamps

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Categorization of Environmental Impacts(Non-GHG)
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Air pollution

• E.g., Fuel switching in transport sector
• Increased use of natural gas will not only reduce
  CO2 emissions but also reduce the emission of air
  pollutants including NOX, SOX, PM

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Water pollution

• E.g., Fuel switching in rural areas
• A project introducing renewable energy generation
  in rural households (e.g. solar electric
  technology) will displace the use of dry cell
  batteries to run electric appliances
• Project may reduce the heavy metal water
  contamination associated with the improper
  disposal of such batteries

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Soil conservation

• Restriction of production
• A project which seeks to reduce artificial
  fertilizer production (a process resulting in CO2
  emissions) by encouraging the use of natural
  organic fertilizers should at the same time
  improve the properties of the soil being treated

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Watershed protection

• E.g. reforestation
• Projects that re-establish forests in upland
  areas will improve watershed integrity

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Biodiversity conservation

• E.g. monocultural tree plantations
• would be downgraded because of the potential
  damage to biodiversity

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V. Categorization of impacts on disadvantaged
groups
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Increasing productive efficiency

• Through technology transfer, a CDM project may
  focus on increasing the efficiency of household
  processes and livelihoods.
• Projects that provide cheaper energy options or
  increase the agricultural output of households of
  disadvantaged groups
• E.g., fuel switching in rural areas

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Improved employment opportunities or livelihood
options

• New employment opportunities for local people and
  disadvantaged groups may arise as a result of CDM
  project activities
• E.g., construction of new facilities, operation
  of new facilities in renewable energy generation
• New livelihood options for local people and
  disadvantaged groups
• E.g., collection of biomass for conversion to
  energy

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Reduced livelihood opportunities or livelihood
options

• A CDM project may reduce the employment and
  livelihood opportunities to local people and
  disadvantaged groups
• E.g., closed sanitary landfill for methane
  capture may restrict scavenging opportunities

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Land and resource rights

• CDM projects may remove the legal and customary
  land and resource use rights of local communities
• E.g. Afforestation projects may remove customary
  rights of indigenous peoples over forest land
• E.g. Building of dams for generation of
  hydroelectric power may displace disadvantaged
  groups living in local communities

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Environmental impacts

• A CDM project may have a number of environmental
  impacts (as outlined in Part IV) some of which
  may be specifically incurred by disadvantaged
  groups
• E.g. Replacement of coal-fired boilers which
  cause considerable local air pollution with
  cleaner technology will reduce local air pollution

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Positive spillovers

• A CDM project may have a demonstration effect
  that encourages similar enterprises in other
  areas that will themselves generate employment or
  livelihood opportunities for disadvantaged groups
• E.g., introduction of pico hydro technology may
  provide training and technical assistance in the
  technology for certain individuals who can make
  the technology available to a much wider community

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Positive spillovers

• Local multipliers Local people and disadvantaged
  groups may benefit indirectly from the
  improvements in infrastructure and increased
  economic activity that results from a CDM
  projects investments and activities
• E.g. provision of reliable energy in a rural area
  could spur economic activity and generate
  employment and livelihood opportunities

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Negative spillovers

• Local stagnation CDM projects that prohibit or
  restrict some activities may be in danger of
  irrevocably undermining local communities.
• The employment and income provided by such
  activities may be fundamental to the functioning
  of the local community.
• E.g., afforestation restricting slash-and-burn
  farming

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Negative spillovers

• Income effects CDM projects that increase the
  prices of goods that form a large part of the
  expenditure of disadvantaged groups will impact
  directly on their well-being
• E.g. CDM project increases the price of energy
  (e.g., photovoltaics more expensive than
  kerosene) or food stuffs (e.g., organic more
  expensive than non-organic)

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VI. Summary of CDM project impacts on sustainable
development
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Categories Types

• Economic
• Environmental
• Impact on disadvantaged groups
• Direct / Indirect
• Positive / Negative

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Economic impacts

• Direct project impacts
• Productivity gains ()
• Increase in productive efficiency
• Exploitation of new productive possibilities
• Productivity losses (opportunity costs) (-)
• Reduced productive efficiency
• Productive possibilities foregone
• Indirect impacts
• Positive spillovers ()
• Efficiency gains
• Complementary activities
• Negative spillovers (-)

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Environmental impacts(Non-GHG)

• Air pollution (/-)
• Water pollution (/-)
• Soil conservation (/-)
• Watershed protection (/-)
• Biodiversity conservation (/-)
• Other environmental services (/-)
• E.g., Local climate regulation

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Impacts for disadvantaged groups

• Direct project impacts
• Increasing productive efficiency ()
• Improved employment opportunities or livelihood
  options (-)
• Reduced employment opportunities or livelihood
  options ()
• Land and resource rights (-)
• Environmental impacts (/-)
• Indirect impacts
• Positive spillovers ()
• Demonstration effect
• Local Multipliers
• Negative spillovers (-)
• Local stagnation
• Income effects

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Reducing negative impacts

• Measures must be proposed to minimize or to
  mitigate the negative impacts of CDM projects
• For social acceptability
• For national approval

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Environmental Compliance Certificate

• Procuring the required ECC is a process by which
  sustainable development impacts will be
  identified through stakeholder consultations
• And also identify the measures which will
  minimize negative impacts
• A potential CDM project is a project with an ECC

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• Thank you

Roberto C. Yap, S.J., Ph.D. Environmental
Economist Climate Change Information
Center Manila Observatory Ateneo de Manila
University Tel [phone] Fax 63 2
426-6070 rcyap_at_ateneo.edu