PoA AFTER Cancun - READY TO TAKE OFF NOW Presentation title PoA AFTER Cancun - READY TO TAKE OFF NOW SEVENTH CDM JOINT COORDINATION WORKSHOP Bonn, Germany 12 - 13 March 2011 Massamba THIOYE, Manager of the Standard Setting Unit UNFCCC secretariat, programme

THE CMP MANDATE Requests the Executive Board to reassess its existing regulations related to PoA in order to: (a) Further clarify the application of existing rules regarding the demonstration of additionality to PoAs and the definition of eligibility criteria for the CPA inclusion in a PoA; and

DEFINITION A PoA is a voluntary coordinated action by a private or public entity which coordinates and implements any policy/measure or stated goal, via an unlimited number of CDM project activities (CPAs)

WHAT IS A PoA CDM rules 10 independent projects 10 independent PPs 10 PDDs developed 10 validations 10 registrations by UNFCCC to get in the CDM 10 verifications each year to generate CERs 5 kT 5 kT CDM rules 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT

WHAT IS A PoA CDM rules PoA PoA rules 01 PoA 01 Coordinator, unlimited number of participants Unlimited number of CPAs not identified ex ante During 28 years in the boundary 01 validation to get the PoA with 01 CPA in the CDM 09 validations to get the CPAs in the PoAs 01 verification each year to generate CERs based on sampling 5 kT PoA rules 5 kT CDM rules PoA 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT 5 kT

ADDITIONALITY OF THE PoA Demonstration that in the absence of the CDM either: the proposed voluntary measure would not be implemented, or the mandatory policy/regulation would be systematically not enforced, or that the PoA will lead to a greater level of enforcement of the existing mandatory policy /regulation No guidance on how to establish that a voluntary measure would not be implemented without CDM

ADDITIONALITY OF THE PoA Approaches for additionality demonstration: The project is not attractive; or The project might be attractive but faces barriers; or The project is attractive but there is another more attractive option of investment; or The performance of the measure is higher than a benchmark performance - Measure is not meant to be attractive - Option 4 more suitable but not always applicable

ADDITIONALITY CRITERIA What is to be demonstrated at the PoA level is: the policy/measure leads to performances that are higher than a benchmark if relevant under the specific conditions of the PoA, a CPA that meet the criteria of inclusion in the PoA, meet the general criteria for additionality demonstration A PoA DD is a standard for additionality demonstration. The PoA has to establish that compliance with its eligibility criteria ensures compliance with the general requirements for additionality demonstration

INCLUSION CRITERIA OF CPAs Presentation title INCLUSION CRITERIA OF CPAs The eligibility criteria, shall allow for demonstration that the CPA is an activity that: Is triggered by the implementation of the policy/measure and would not occur in the absence of the PoA; or Is triggered by the enforcement of the mandatory policy/regulation and would not occur in the absence of the PoA

INCLUSION CRITERIA OF CPAs They are translations of the general requirements in the CDM standards into simpler requirements specific to the PoA For additionality, the PoA could translate the general requirements for additionality demonstration into inclusion criteria Additionality is to be demonstrated/assessed at the CPA level against the inclusion criteria

EXAMPLES Feed-in tariff for renewable If the most important parameters for the attractiveness of a wind farm are the power capacity P and the average wind speed S, the criteria for inclusion of a wind farm CPA might be related to P and S The PoA can establish that for values of P and S below defined thresholds, the IRR of a CPA will be lower than the benchmark

EXAMPLES P Not Additional Additional S Demonstrating additionality of a CPA consists of showing that the (P,S) values of the CPA is below the limit curve

EXAMPLES For the diffusion of small appliances (e.g. ICS), an investment analysis is not necessarily the most relevant approach The penetration rate of the appliance might be one criteria for inclusion of a CPA in the PoA that addresses the additionality issue Only CPAs in regions where the penetration rate is lower than a threshold can be eligible for inclusion in the PoA Only CPAs that leads to performance higher than a threshold defined in the PoA are eligible

LIABILITY ISSUE Clarification of what is meant by erroneous inclusion of CPA: Inclusion of a CPA that does not meet the eligibility criteria of the registered PoA. Risk = Probability of occurrence *Impact

THANK YOU FOR YOUR ATTENTION