1. CDM Implementation Experiences of Bhutan Sonam Yangley Director National Environment Commission

2. 2 Background on CC Bhutan’s significant step to address Climate Change issues: signed UNFCCC at Rio de Janeiro in 1992 ratified UNFCCC during the 73 rd Session of National Assembly in 1995 NEC designated to host the National Climate Change Committee NECS - focal institution for the UNFCCC Submitted the Initial National Communication at the 6 th Conference of Parties in November, 2000

3. 3 Background on CC … cont. Completed first National Inventory on Greenhouse Gas Emission Commissioned first CDM Project (pilot) in Bhutan Undergoing research on Impact of Climate Change and its Adaptation measures in Bhutan Preparation of National Adaptation Plans of Action (NAPA)

4. 4 Sector-wise potentials  Energy sector  Off grid minimal  Export to India Issues  Forestry Sector  Limited CDM  Industries Sector  Possible, need more research

5. 5 Pilot Projects 1.Micro Hydro Project in Chendebji  70 kW  E7 financing  700 tCO2 2.Pilot project in for a forestry CDM project  Envirotrade (UK), Edinburgh Center for Carbon Mgmt, Namsay Consulting (Bhutan)  Only “concept note”. Proposal to be prepared only after approval by RGOB.

6. Pilot CDM Project in Chendebji (Micro Hydro) E7 Fund for sustainable energy development and the Department of Energy, RGOB

7. 7 Purpose  To test the principles of CDM -carbon credit sharing by and for sustainable development of renewable energy resource (micro hydro). - gain experience to contribute to rule making for the CDM.

8. 8 Salient Features of the proposed Project  Micro hydro – 50 metres head, 0.2 m3/s discharge to generate 70 kW power and 582,540 kWh per annum. Project Objective: i) Demonstration of the project as the CDM pilot project ii) RE of 42 HH, 5 institutional buildings at Chendebji village iii) Improvement of education and living standards utilizing ICT.

9. 9 Present Status  Commissioned the hydropower plant  Estimated cost of the Project (as per PFS) is US$ 280,000 +/- 25% variation  Total reduction in CO2 emission by this project estimated at 593.1 ton CO2 (~ valued at US$ 5,931 – 17,793) – kerosene, firewood and diesel replacement.

10. 10 Experiences  Small scale CDM Projects – good only as a pilot scheme due to cheaper investment cost  CER shares: 50 – 50 between RGoB and e7  CER Prices to be negotiated yet  Need capacity building on preparation of full scale CDM Project  Need capacity building for DNA

11. 11 Recommendations 1.Carbon trading has potential to complement “value adding”. 2.Potential for Bhutan not yet clear. It may be modest. More research is needed. 3.Carbon trading is more than CDM (Kyoto Protocol) so look at other possibilities such as niche markets. 4.CDM Administrative cost are expensive and modalities complex

12. 12 Recommendations 5.To fully benefit from carbon trading, more human resources and capacity building and awareness is needed. 6.Pilot projects should be implemented (learning by doing) to provide guidance in evaluating cost/benefits of carbon projects.

13. 13 Tashi Delek