© 2006 UNDP. All Rights Reserved Worldwide. Proprietary and Confidential. Not For Distribution Without Prior Written Permission. UNDP MDG Carbon RBEC EFP Workshop MDG Carbon Project Screening tool Presented by Matt Spannagle Thursday 28 th September 25-29, 2006, Bratislava, Slovakia

1 1 Presentation Overview 1.Purpose & Outcomes of tool 2.How to use tool 3.Short overview of the 9 Charts 4.Okilu Hydro Example 5.Okilu summary of screening 6.Okilu - what to do next?

2 2 Purpose MDG Carbon Screening Tool Purpose is to quickly screen projects to ensure resources are spent on the most promising projects. Does not replace good judgment – but structures thinking Not intended to be exact – requires some interpretation Simple/quick - where information not available, follow both paths to see the possible outcomes – assess how critical the information is Screens only on ‘carbon’ (ie ‘Carbon layer’ only, not the underlying project)

3 3 Outcomes of MDG Carbon Screening Tool should be self-explanatory Not intended to be exact – requires some interpretation From identified project concepts, screening gives outcomes of: A - ‘promising’ B…C - ‘in-between’ – those that are not black or white – identify areas of concern, or where more information is needed D - ‘unlikely’ - remove from further consideration those that are not eligible or are unlikely to be viable

4 4 Overview of the 9 Screens 1.General eligibility Non-eligible sectors Time of implementation Use of ODA 2.Host country issues CDM or JI Status of KP Ratification and DNA Host country Sustainable Development policies 3.Additionality Legal and relevant policies Financial and barriers Common practice

5 5 Overview of the 9 Screens (cont’d) 4.Baselines Identifying baselines Approved methodologies Data and monitoring 5.Stakeholder engagement & ownership Site selection ownership Stakeholder support 6.Implementation time and minimum emission reductions Rules of thumb for minimum start times and tonnages

6 6 Overview of the 9 Screens (cont’d) 7.Sequestration Eligibility 8.Non-GHG attributes Safeguard principles 9.Non-GHG attributes MDGs

7 7 Okilu Hydro Example Issues to be resolved and some results 1.Screen – general eligibility (C) (B) Concern on whether damming of river meets World Commission on Dams Guidelines (C) already under construction? Need to independently show that CDM was a decisive factor in project planning 2.Screen – Host country (A-B) (A-B) get copy of EIA

8 8 Okilu Hydro Example Issues to be resolved and some results (cont’d) 3.Additionality (C) (A-B) Unlikely – but Check water control not required in any regulations (B) Need to know more about energy policies (E+ & E-) (C) Don’t know anything about the least cost option (IRR/NPV etc) or the alternatives to this project - IF it is least cost – don’t know anything about further barriers. If this can’t be shown, project ineligible! (C) Can project demonstrate it is NOT common practice in the region? (C1.1)

9 9 Okilu Hydro Example Issues to be resolved and some results (cont’d) 4. Baselines (A-B) (A-B) Baseline emissions –Grid – check have the PP has the calculations and justification for Emission Factor (seems OK) 5.Stakeholder (A) No serious concerns 6.Implement & reductions (A) No serious concerns 7.Sequestration - NOT APPLICABLE

10 Okilu Hydro Example 8.Safeguard Principles Need to address these as per UNDP best practice 9.MDGs EG – if several fishermen lose water access as a result of the dam – negative MDG 1 impact – but if project provides those fishermen with stable employment in penstock operation (?) then ‘negative’ impact is mitigated  Screens 8 & 9 - Difficult area – under development  Discussed from Andy Yager presentation (day 1)

11 Okilu Hydro Example – Summary of screening Primary concerns: 1. General eligibility (C) Is the project already constructed? If yes – see note [4] of slide 12: To be eligible the PP needs to register before end 2006, and be able to transparently demonstrate that CDM (or at least income generated from ‘climate change benefits’) was a significant (preferably decisive) factor in the decision to undertake/commence construction of the project Demonstrating this requires that any such decisions were available to (and preferably known) independent entities (eg PWC/KPMG audit, public EIA etc) NB – if construction has NOT started - this issue is no longer a problem.

12 Okilu Hydro Example – Summary of screening (cont’d) Primary concerns (cont’d): 2. Additionality (C) In the information presented, don’t know anything about the least cost option (IRR/NPV etc) or the alternatives to this project (ie what were other baseline scenarios?) Hydro is probably not the least cost option (but depend on fossil fuel price and availability) IF it is least cost – don’t know anything about further barriers. If this can’t be shown, project ineligible! Need more information on how common hydro is in the region.

13 Okilu Hydro Example – Summary of screening (cont’d) Secondary concerns: Large dams can be controvertial – and CERs from large hydro not included in EUETS. Is this an existing dam? Or new construction? If new construction – is it > 15m high? If yes - does it meet World Commission on Dams Guidelines? Need to know more about energy policies (E+ & E-)

14 Okilu Hydro Example – What to do next? This is YOUR decision!..... But for me… For Additionality and secondary concerns, the PP probably has much of this information on hand (eg it may not be translated, or you only asked for the summary etc) But for General Eligibility, if project already under construction(?) there is a serious risk that the PP knew nothing about CDM at project start, and this is an ambit claim to try and get more revenue from the project. Ask PP for the independent proof needed to demonstrate CDM was decisive factor and nothing else. If PP can provide this, then (and only then) ask for further info on additionality and other concerns. (don’t burden yourself with info that may be irrelevant!)