KfW Carbon Fund From PoA to NAMA Barcelona 31th of May 2011

© KfW KfW Carbon Fund May 2011 Agenda I. The NAMA Framework II. Bridging the Gap – From PoA to NAMA III. Conclusions

© KfW KfW Carbon Fund May 2011 The NAMA Framework An evolving concept  On UNFCCC Agenda since negotiations in Bali 2007 Objective: Scale up mitigation actions  Several voluntary NAMA communications submitted to UNFCCC following the Copenhagen Accord  Cancún Agreements took note of NAMA pledges and decided on - NAMA registry - Green Climate Fund - New market based mechanisms to be discussed at COP 17

© KfW KfW Carbon Fund May 2011 The NAMA Framework Where do we stand?  Scope: -Broad array of NAMA ideas but few concrete approaches  Sources of Funds: -Domestic - International Support - Market Based -Green Climate Fund (USD 100 bn p.a. by 2020)  Rules and practical guidance: -Regulatory framework unclear, lack of guidance on NAMA design Key question: How to arrive quickly at practical experiences?

© KfW KfW Carbon Fund May 2011 Agenda I. The NAMA Framework II. Bridging the Gap – From PoA to NAMA III. Conclusions

© KfW KfW Carbon Fund May 2011 Bridging the Gap – PoA to NAMA Why PoA as starting point?  3 or more strategies are possible - Top-Down - Bottom-Up - Combination  Bottom-Up strategy for NAMA development uses elements of a PoA -  Assumption - Fast track pilot schemes are possible PoA CPA … NAMA Low Carbon Development Policy

© KfW KfW Carbon Fund May 2011 Bridging the Gap – PoA to NAMA Similarities and differences Similarities - Support and implementation of low carbon development activities and strategies - Documented evidence of GHG reductions by use of MRV Systems - Implementation of broad based GHG Mitigation programmes - voluntary actions Emission reductions account for NAMA country targets / Exception for market based NAMA open Emission Reductions used for Annex-I- country Kyoto compliance Broad, sectoral approaches beyond CDM possibleDefined by PDD and CDM methodology Market mechanisms only an optionFinanced through market mechanisms Baseline and MRV system not yet definedBaseline and Monitoring via CDM methodology Coordination most likely by government bodyCoordination via private or public sector NAMAPoA Differences

© KfW KfW Carbon Fund May 2011 Bridging the Gap – PoA to NAMA Research Study*  Module 1: Understand the PoA: scope, eligibility criteria, implementation arrangements, targeted GHG emission categories  Module 2: Analyse four key technical PoA design elements and their suitability for scaling up: -eligibility criteria / baseline setting procedure / MRV process and PoA management and -identify if PoA design is a) already fully applicable, b) needs to be adjusted or c) needs to be developed for NAMA design.  Module 3: Evaluate the domestic policy & institutional framework to assess whether the existing framework is supportive of NAMA implementation or not.  Module 4: Identify follow-up actions for NAMA readiness based on the need for adjustments and new designs as identified *Study by South Pole on behalf of German Ministry for Environment and KfW

© KfW KfW Carbon Fund May 2011 Module 1 & 2: Scaling up key PoA technical design elements Guiding Key Questions PoA ElementGuiding key questions Eligibility criteria What are the PoA’s eligibility criteria? Should the eligibility criteria be adjusted to include additional activities under a NAMA, such as expansion to other sectors and intervention-types? Should the eligibility criteria be adjusted to be able to scale-up activities through the involvement of additional implementation entities? Is the PoA limited to a region? Should its geographical coverage be increased to a national scale? Should the eligibility be adjusted to target emission reductions from the same IPCC GHG emission categories under a NAMA? Baseline setting How is the baseline set in the PoA? / Is the baseline setting applicable to a NAMA? Can the baseline be adapted by introducing standardization elements? Can the baseline be simplified in the context of a NAMA? Can the PoA baseline be used to set targets for the NAMA? MRV procedures What are the key monitoring requirements of the PoA? Are the PoA monitoring requirements workable in a NAMA context or would they be too difficult to implement? Can a NAMA-level GHG inventory and its related MRV system be upgraded and operated using the PoA as a starting point? Who is responsible for monitoring and managing the verification process? What is the capacity of the relevant entities in the PoA to estimate, collect and manage GHG emissions in a NAMA context? Management How is the PoA management structure set-up? Who is managing the CME? Could the CME play a crucial role in managing a NAMA? If not, would it be possible to transform the PoA CME into an entity with the institutional capacity to manage a NAMA? Are the current incentives/regulations sufficient to successfully manage a NAMA? If not, what additional incentives/regulations would be needed to successfully manage a NAMA?

© KfW KfW Carbon Fund May 2011 PoA Case Studies and their NAMA Scale Equivalent

© KfW KfW Carbon Fund May 2011 Agenda I.The NAMA Framework II. Bridging the Gap – From PoA to NAMA III. Conclusions

© KfW KfW Carbon Fund May 2011 Conclusions  Study gives results for the four case studies (presentation on 2nd of June)  PoA can be a fast start, bottom up approach to design NAMAs  The better the link to domestic policies the easier the up-scaling  converse argument: Not all PoAs can serve as stepping stone to a NAMA  NAMA MRV can build on CDM MRV but should be simplified! (e.g. standardised baselines, benchmarks, positive lists)  For Co-existence of Poas and NAMAs there needs to be a way to avoid double counting (e.g. deduction of CER from NAMA target)  We need more PoA experience and Pilot projects to gather experience for NAMA rules and guidance

© KfW KfW Carbon Fund May 2011 Questions for discussion  How do you like the approach?  Something that can be considered in your country? Interesting and matching PoAs existent?  Can the co-existence and linkage of a PoA with a NAMA be counted as a specification of a NAMA crediting?

© KfW KfW Carbon Fund May Contact KfW Carbon Fund KfW Bankengruppe Palmengartenstrasse 5– Frankfurt am Main Germany Tel Fax Carolyn Neufeld Tel Thank you for your attention!