First National Workshop On Capacity Building On CDM Under CD4CDM Project Enhancing Developing Countries Participation On The Carbon Market Overview of URC’s CDM Capacity Development Activities Moinul I Sharif Senior Scientist UNEP RISOE Centre April 2008

International and Danish, interdisciplinary staff.International and Danish, interdisciplinary staff. Based on agreement between Risø, UNEP and Danida. Located at Risø since 1990.Based on agreement between Risø, UNEP and Danida. Located at Risø since Mandate: support UNEP in its activities to incorporate climate and environmental aspects into development and energy planning and policy worldwide, with a special emphasis to assist developing countries.Mandate: support UNEP in its activities to incorporate climate and environmental aspects into development and energy planning and policy worldwide, with a special emphasis to assist developing countries.

Three Thematic Areas Energy and Development Energy and Carbon Finance Sustainable Development and Climate Change Activity Areas Energy & PovertyEnergy & Poverty Energy Efficiency & Renewable EnergyEnergy Efficiency & Renewable Energy Energy Sector ReformEnergy Sector Reform CDM & Carbon markets Development & ClimateCDM & Carbon markets Development & Climate National and International Policy InstrumentsNational and International Policy Instruments TransportTransport Capacity DevelopmentCapacity Development

Major Activity Areas Individual and Institutional Capacity Development (CD) One of largest and most known CD programs in field Global reach, but core focus on least developed countries Generally investor-neutral, i.e., not connected to actual credit purchases Development/Piloting of Demonstration CDM Projects Methodologies, Guidebooks, and Policy Analyses Series of ‘how-to’ manuals for CDM project development Discussion papers, analytical contribution to UNFCCC process Market Surveillance & Information Dissemination CDM Pipeline tool has become one the key ‘open source’ information tools for monitoring developments and evolution of the market Carbon Finance & CDM

CDM Challenges Complex CDM Modalities & Procedures Transaction cost to hire service providers. Heavy institutional requirements for project cycle (DNA, DOE Validation, DOE Verification, etc.). Knowledge gap between CER buyers & sellers. Limited access to finance by potential developers: Financial intermediaries lack of knowledge about CDM. Lack of trained national CDM experts. Investment climate in host countries (e.g. SS Africa). Limited budgets for operations of DNAs. Need for national entities capable of bundling projects. Carbon Finance & CDM

Strategy for Capacity Development Design of interventions based on: Continuous barriers analysis process. Monitoring global market. Consultations with in-country stakeholders. Core objectives: Minimize transaction cost. Remove CDM-related barriers. Facilitate efficient & effective completion of CDM project cycle. Key issues to achieve objectives: A combination of targeted, hands-on sectoral workshops, guidebook materials, market analysis & research, host country participation in global carbon events, & web-based tools. Carbon Finance & CDM

support design of new methodologies (e.g. in LULUCF in Sub-Saharan Africa) Sector specific workshops (e.g RE; landfill; EE, etc) for sector experts; practitioners; project developers Executive briefings for ministries and key officials Support national experts to produce portfolio PINs & PDDs including programmatic activities Guidebooks on specific issues of the CDM (CDM procedures; baselines; Institutional; legal; financing; PDD guidebook; CDM SD impacts; Working Paper Series (CDM forestry and biomass; SD&CDM; EE & pCDM; bio- energy & CDM) Perspective Series (determining a fair Price for carbon) Overview of JI & CDM Pipeline

On going CDM Capacity Development Activities Capacity Development for CDM (CD4CDM): $12.5 million budget, 12 countries Phase I + 7 countries Phase II. Completion Using Carbon Finance for Sustainable Energy in Africa (CF-SEA) Project: five countries, jointly with World Bank’s CDCF, $1 million. GTZ Energy-Sector CDM CD for francophone SS Africa, $500,000. European Commission CD for MEA, APC countries, $4 million. French-funded francophone CASCADe Project (Carbon Finance for Agriculture, Sylviculture, Conservation and Action against Deforestation), $3 million. Danida CDM Green Facility in Africa (6 countries), $3 million. UNDP-UNEP East Africa CDM Capacity Building, $1.7 million. Programmatic CDM in China + Bioenergy CDM CB in China. UNFCCC CDM Bazaar hosting & management. UNEP SBCI CDM and the building sector Production of a series of CDM manuals, guidebooks, working papers, etc.

Target Countries (completed, on-going & forthcoming) Latin AmericaSS AfricaNorth AfricaSouth Asia Cuba Nicaragua Peru Bolivia Ecuador Guatemala Suriname Caribbean Islands Region. Ghana Cameroon Mali Uganda Cote d’Ivoire Zambia Mozambique Mauritius Tanzania Benin Gabon Madagascar Congo Senegal Algeria Egypt Morocco China Cambodia Bangladesh Sri Lanka Philippines Vietnam Thailand Pacific Islands Region.

CD for CDM - Results Achieved Core business & regulatory frameworks for CDM investment Operationalization of DNAs in a number of countries: DNA infrastructure support; DNA CDM web site. Modalities & Procedures for CDM projects approval are in place National CDM Investors’ Guide. Participation of DNAs in Carbon Expo. Preparation of pipeline of PINs/PDDs by national consultants. Organized capacity building workshops Skills and Knowledge provided to local experts to prepare good quality PINs/PDD. Local experts able to deal with the complete cycle of CDM projects Local relevant institutions have good understanding of CDM and Climate Change Inter-institutional networks and coordination have been generated and enhanced through country team activities and the DNAs.

Regional CDM projects Promotion Activities

CD Success Indicators Key contribution is reduction in projects’ transaction costs Number of days DNA review/approve a CDM project. Local experts capable of preparing good qualityPIN/PDD. Local financial institutions have good understanding of CDM, possibly willing provide underlying project financing. Validation/Verification processes conducted in a timely manner. Number of signed Emission Reduction Purchase Agreements (ERPAs).

URC CD Value to Carbon Market Not a buyer. Not a seller: Unbiased advisory services & research products Trusted by both buyers & sellers. In-country CDM CD activities in more than 30 developing countries: Cross-fertilization of experiences from different regions and sectors. Intimate knowledge of host countries’ situation Access to valuable field information Institutional, financial & market barriers facing them. Ability to invest time & effort in activities unattractive to private sector: Research products (CDM Pipeline database). Operate & pave way in high sovereignty risk countries (e.g. Sub-Saharan Africa). Diversified experiences (geographic & sectoral) among carbon finance team in UNEP.

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