1. CDM Issues and Capacity Building Program of Japan Regional Workshop and Training on “Capacity Development for the Clean Development Mechanism” November 16 - 19, 2003 Tae Yong Jung Institute for Global Environmental Strategies (IGES), Japan

2. Clean Development Mechanism (CDM) Issues* CDM: Definition  A Cooperative Mechanism established under the Kyoto Protocol  To promote environmentally friendly investment from industrialized countries for the sustainable development of hosting countries * :Introduction to CDM, UNEP/URC, RISOE, 2002

3. Clean Development Mechanism (CDM) Issues Kyoto Protocol: Article 12  “ The purpose of Clean Development Mechanism shall be to assist Parties not included in Annex I in achieving sustainable development and in contributing to the ultimate objective of the Convention, and to assist Parties included in Annex I in achieving compliance with their quantified emission limitation and reduction commitments under Article 3 ”.

4. Clean Development Mechanism (CDM) Issues Eligible Projects  End-use Energy Efficiency Improvement  Supply-side Energy Efficiency Improvement  Renewable Energy  Fuel Switching  Agriculture (Reduction of CH 4 and N 2 O)  Industrial Process (CO 2 from Cement, … )  Sinks Projects

5. Clean Development Mechanism (CDM) Issues Project Cycle for the CDM 1.Project Design and Formulation 2.National Approval 3.Validation/Registration 4.Project Financing 5.Monitoring 6.Verification/Certification 7.Issuance of CERs

6. Establishment of the DNA* (Case of Peru) Composition of the DNA  the National Council for the Environment (CONAM) : Designated National Authority for CDM (Supreme Decree 095-PCM-2002)  The composition of the DNA: simple and flat and takes advantage of the national environmental management system, which is based on the performance of multisectoral and multidisciplinary teams conformed by CONAM and other institutions. * :INSTITUTIONAL STRATEGY TO PROMOTE CDM IN PERU, Maria Paz Cigarán Patricia Iturregui, 2003

7. Establishment of the DNA (Case of Peru) CONAM  General Roles Designated National Authority (DNA) Leads and coordinates CDM project evaluation and approval Presides National Climate Change Commission

8. Establishment of the DNA (Case of Peru) CONAM  Specific roles related to CDM To Follow up on CDM National Strategy implementation To promote and regulate national and international regulation related to CDM To implement CDM Project approval procedure – ISO P-34 - and its continuous improvement. To register CDM activities in the country (CER transference and property of every project) To support spreading of CDM information to create local capacity for the development of national DOE and to improve Project portfolio. To participate in international negotiations and to comply with ruling CDM related international procedures To coordinate the necessary actions to overcome barriers for the implementation of CDM Composition of the DNA

9. Establishment of the DNA (Case of Peru) Structure of the DNA  Head of the DNA: the Head of the Climate Change Unit  The Climate Change Unit is composed;  Head of the Climate Change Unit  An environmental Expert

10. Establishment of the DNA (Case of Peru) Ad hoc Committee (interministerial and multisectoral) : evaluation and approval  A representative from the governmental sector to which the project belongs  A representative from the National Environmental Fund – FONAM  A representative from the private sector  A representative from the NGOs

11. Establishment of the DNA (Case of Peru) Ad hoc Committee (interministerial and multisectoral) : (Continued)  A representative from the Peruvian International Cooperation Agency - APCI  A representative from the Ministry of Foreign Affairs  A representative from Proinversion  Head of the Climate Change Unit – CONAM  One or two EIA sectoral expert (a max of 2, as required)  Other experts (a max of 2, as required)

12. Establishment of the DNA (Case of Peru) PROINVERSION - Investment Promotion Agency  General role Coordination of CDM Project investment promotion  Specific roles related to CDM To include CDM opportunities in the “ National Investment Plan ” and in its national promotion strategy design To promote CDM project portfolio nationally and internationally. To facilitate communication within the different actors of CER production To administer a data base with relevant information about investors, CER buyers, project developers, DOE, capacity building institutions, status of international negotiations, etc.

13. Establishment of the DNA (Case of Peru)  Specific roles related to CDM To lead spreading of information to investors, entrepreneurs, professionals, general public. To strengthen national capacity building through the coordination of programs to: –Build capacity to formulate CDM projects –Create DOEs –To promote investors participation in the Carbon market. To coordinate with other institutions (FONAM, PROFONAMPE, FONDEBOSQUE, CET, etc) to get funds for capacity building and awareness activities. To implement different activities to overcome barriers To represent private sector position in international negotiations as part of the Peruvian delegation

14. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) Goal  To enable developing countries in Asia and investors from Japan fully participate in CDM projects that contribute to sustainable development of host countries

15. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) Objective  Providing information and raising awareness on CDM  Implementing actions to support institutional networks for CDM  Contributing to training and human resource development to operationalize CDM  Supporting CDM project identification, development and implementation activities

16. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) Synergy with other CDM promotion initiatives of MOE-Japan  CDM/JI Feasibility Study Support Program (Fiscal Year [FY] 1999)  CDM/JI Validation Support Project (FY 2002)  National Registry System Establishment Project (FY 2002)  Kyoto Mechanism Support Centre (Newly launched)  Subsidy Scheme for CDM/JI Project Facilities and Equipment (Newly launched)  Kyoto Mechanism Utilization Fund (Newly launched)  Voluntary Emissions Trading Testing Program (Newly launched)

17. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) Collaboration with other regional and international capacity building programmes  Multilateral and international organizations such as the World Bank, Asian Development Bank, UNEP and various bilateral agencies have also been implementing CDM support programmes in various Asian countries.  ICS-CDM will collaborate with such initiatives, wherever possible, to ensure effectiveness of the programme and efficient use of resources.

18. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) Outcomes expected in all host countries:  Diffusion of knowledge and understanding about opportunities and benefits from CDM to diverse stakeholders (policy makers, industries, financial institutions, non-governmental organizations [NGOs], academia and the general public) thereby leading to creation of a positive attitude to CDM in host countries  Establishment of a strong partnership between Japan and host countries in relation to CDM and climate protection based on mutual understanding of needs and priorities

19. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) Outcomes expected in all host countries:  Analysis of the realistic potential for CDM projects in the waste management and renewable energy sectors and of small-scale integrated projects, to serve as a basis for devising an effective national strategy for CDM in these sectors/project types  Development of human resources necessary for drafting project design documents (PDDs) and validation of feasible CDM projects

20. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) Outcomes expected in countries where some capacity for CDM already exists:  Further enhancement of understanding of CDM among ministries and other governmental institutions thereby leading to creation of a positive attitude to CDM  Creation of a common basis for understanding on the operational procedures of CDM among project implementing entities, investors, and agencies in- charge-of CDM in host countries and Japan

21. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) Target Countries:  Emission reduction potential and population increase potential countries: China and India  Carbon sequestration potential/medium-size countries: Indonesia, Malaysia, etc.  Sustainable development in small developing countries: Bhutan, Cambodia, Lao PDR, Mongolia, South Pacific Islands, Sri Lanka, etc.

22. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) Targeted stakeholders for training workshops:  Policy-makers (officials from the national and local governments ）  Industries, Businesses and Financial agencies (private companies, project developers, consulting firms, banks and other financial Institutions, etc.)  Civil Society (NGOs, local communities, academia and research

23. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) Support to activities for formulating CDM policy and strategy  If the situation warrants and subject to requests from the host government, a national CDM policy and strategy formulation support unit, comprising representatives from the government, private sector, academia and NGOs, may be established in close cooperation with counterpart organization(s).

24. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) Support to activities necessary for identification and/or establishment of Designated National Authority (DNA)  Subject to requests from the host government, support will be given to activities that would facilitate discussions necessary to identify and/or establish DNA and formulate the approval and operational procedures for CDM

25. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) CDM Potential Assessment  The need for enhancing capacity of host country ’ s institutions to identify, evaluate and implement potential CDM projects is important to utilize CDM as one of the tools to achieve sustainable development.  Training activities that will help in assessment of the potential of CDM in the selected sectors and of project type, such as waste management, renewable energy and small-scale CDM projects will be supported and implemented jointly with local entities of the host country.  Focus is laid upon bottom-up evaluation procedures of CDM

26. Integrated Capacity Strengthening for the Clean Development Mechanism (ICS-CDM) Joint Research between IGES and Local Research Institutions  Enhancing local capacity to undertake objective and independent research on CDM issues in host countries is also important in the long term in order to retain the knowledge base necessary for further implementation of CDM in host countries.  Joint research on CDM issues between various IGES projects and local research institutions will be supported through this programme.