Contribution of CDM projects to sustainable development Case Study - Bolivia Sergio Jáuregui Consultant Santa Cruz, Bolivia, August 2004

Presentation Index 1.Institutional and policy framework 2.Procedures for Host-Country Approval for CDM project activities 3.Criteria for host country approval 4.Criteria for the characterization of the contribution of project activities to sustainable development 5.Case studies 6.Conclusions 7.Recommendations

Institutional and policy framework (1) Ministry for Sustainable Development Viceministry for the Environment (DNA) NPCC NCDO Commission for Project Evaluation Inter-institutional Commission on Climate Change

1.Environmental policy integrated into National Development Plan (1994) - SD 2.Ratification of UNFCCC CC Action Plan – UNFCCC Implementation Plan – 1997/98 4.Integration of CC policies, NDP, First National Communication NSS DNA Designation, Establishment of NCDO, Overall, nominally, sustainable development policies Institutional and policy framework (2)

Procedures for Host-Country Approval (1)

1.Conformity with CDM rules – EB 2.Conformity with national regulation on benefit distribution 3.Clearly defined additionality case 4.Baseline scenario conforms with real trends 5.Sectoral authority approval (written) 6.Clearly defined contribution to SD (argumentative) 7.Stakeholder consultation implemented Criteria for host country approval

Approval Procedures (1) - If you have a PIN or Project Profile Project proponentNCDODNA Develop PIN Obtains sectoral endorsement Technical advice – Recommendation to DNA Continues to develop project Issues Letter of Interest

Approval Procedures (2) – Submission of a PDD or Developed Project Project proponentNCDODNA Develop PDD Obtains sectoral endorsement Technical advice – Recommendation to CEP Submits to DOE Convenes CEP Issues Letter of Approval

Overall mitigation potentials [preliminary] Sector / activityMM tCO 2 Electricity in the grid 5.6 Rural Electricity 7.6 Transport 2.5 Other energy uses 1.2 Landfill management 1.0 TOTAL ENERGY SECTOR 17.7 (LULUCF Sector) 80.0 (Total National Potential) 97.7

1.Based on broad criteria and regulatory requirements 2.SD criteria (only guidelines): social, environmental and economic 3.Environmental criteria a.Reductions of emissions from particulates – improvement of local air quality b.Sustainable use of local resources c.Reduction of the local environmental pressures d.Effects of environmental impacts on local health Criteria for definition of SD contribution (1)

4.Social criteria a.Improved quality of life at the local level b.Effects on poverty levels c.Increase of equity levels d.Respect of local cultures 5.Economic criteria a.Effects on the local level of income b.Effects on the levels of local production c.Generation of new investment d.Effective transfer of technology Criteria for definition of SD contribution (2)

6.Regulatory requirements a.Contribution to and compatibility with Government policies (local, sectoral, regional) and compliance with international commitments b.Fulfillment of regulations and sectoral development plans: property rights; rights over use of natural resources, certificates and licenses; rights of local and indigenous communities c.Environmental Impact Assessment (EIA) d.Distribution of benefits derived from the generation of CERs Criteria for definition of SD contribution (3)

6.Santa Cruz Landfill Gas Project (Flaring) 7.Central Santa Rosa (Reconstruction of a run-of-the-river hydro central) 8.CETEFOR (Afforestation and reforestation in the Chapare region) Cases for analysis

1.Contributions to SD defined by broad criteria 2.Criteria recommended / non-mandatory 3.No methodological references for indicators 4.No monitoring process for SD impacts required 5.A framework needed without compromising competitiveness nor generating a perception of regulatory barriers 6.Methodologies exist to develop cost-effective instrument 7.Need to tackle issues of potential conflict of interest Conclusions

1.Establish an operative instrument for fast, cost- effective assessment of SD contribution (verifiers) - RIA 2.Generate a perception among investors that this is a cost-saving tool 3.Devise a standardized methodology to self-define or construct alternative verifiers 4.Develop a cost – effective, random monitoring protocol, based on RIA 5.Finalize development of regulatory framework (including law and technical instruments) 6.Avoid conflict of interests – further detach NCDO from DNA Recommendations (1)

Recommendations (2) - RIA AreaVerifier Possible Impacts Mitigation / supervision measures 1. EnvironmentVerifier 1.1. Verifier 1.2 Others (self – developed) 2. SocialVerifier 2.1. Verifier 2.2 Others (self – developed) 3. EconomicVerifier 3.1. Verifier 3.2 Others (self – developed)