1. International Climate Policy Hamburg Institute of International Economics International Climate Policy Michael Dutschke Bio-Energy and Forestry Capacity Development for the CDM COP 10 Side Event, Dec. 11, 2004

2. International Climate Policy Hamburg Institute of International Economics International Climate Policy OverviewOverview Rationale for project integration Services provided by afforestation and bioenergy Small (scale) is beautiful? Outlook on research agenda

3. International Climate Policy Hamburg Institute of International Economics International Climate Policy Why integrate CDM AR & Energy? Land use change contributes to 20 – 25% of anthropogenic GHG emissions Expiring CERs (tCERs & lCERs) have low present value Restoration forestry is unprofitable except for carbon credits

4. International Climate Policy Hamburg Institute of International Economics International Climate Policy Rationale for integrated projects Millennium Development Goals: –Eradicate poverty and hunger (goal 1) –Ensure environmental sustainability (goal 7) –Build a global partnership for development (goal 8) Renewable Energy and Energy Efficiency Partnership (REEEP): –Foster renewable energy & energy efficiency systems in pursuit of national environmental, economic, social and security objectives

5. International Climate Policy Hamburg Institute of International Economics International Climate Policy Rationale for integrated projects UNFCCC: –Development and poverty eradication are the first and overriding priorities of the developing country Parties (Art. 4.7) –In order for developing countries to progress towards that goal, their energy consumption will need to grow –Measures should be comprehensive, cover all relevant sources, sinks & reservoirs (Art. 3.3)

6. International Climate Policy Hamburg Institute of International Economics International Climate Policy Services provided by afforestation Soil protection Protect quantity & quality of water level Reduce forest depletion by fire wood substitution Increase incomes for local communities Increase land asset value for local communities Capacity building for local communities in sustainable management techniques

7. International Climate Policy Hamburg Institute of International Economics International Climate Policy Bio-energy in DCs Renewable energy supply 14 percent of the world's primary energy use (WEA 2004): Predominantly biomass used for cooking and heating in rural areas of developing countries, (e.g. 50 – 60 % in Asia, 70 - 90 % in Africa) Biomass power occurs commonly in form of direct combustion in developing countries Anaerobic digestion to produce biogas for use in engines also common Most feedstock from agricultural and forest industry residues

8. International Climate Policy Hamburg Institute of International Economics International Climate Policy Services provided by bioenergy Residential and commercial cooking and hot water (wood, crop, dung, charcoal) Rural small industry, agriculture and other productive uses (mainly residues from production) Grid-based power generation Transport fuels (ethanol from sugar cane, biodiesel, synthetic fuels from residues) Rural residential and community lighting, television, radio and telephony (biogas)

9. International Climate Policy Hamburg Institute of International Economics International Climate Policy Small biofuels and development Costs of fossil fuels to increase CDM “leapfrogging effect”, if shift to fossil energy is avoided No radical change in energy use patterns required Better fire wood availability frees women’s workforce Cleaner stoves improve health situation

10. International Climate Policy Hamburg Institute of International Economics International Climate Policy Integrated project C accounting Stand level Landscape level (Example: Schlamadinger et al. 2001)  Expiring CERs  Definitive CERs

11. International Climate Policy Hamburg Institute of International Economics International Climate Policy Example for combination scenario 5101520253035years general lifetime of a biomass boiler Switch from fossil to CO-neutral fuel 2 Bioenergy Project combined with AR Project check for possible partial fuel switch retrofitting for sustainable fuel (at maintainance) co-firing experience with new biofuel from AR increasing residue prices sustainable bio-energy from AR residues at a low price level 1. biomass boiler 2. biomass boiler rotation period of AR available amount of sustainable biofuel from AR (simplified) 1. harvest (e.g. thinning)

12. International Climate Policy Hamburg Institute of International Economics International Climate Policy Risks of integrated projects Large areas blocked Former land uses disrupted Fast-growing species vs. biodiversity Drainage of arid soils Increased use of fertilizers Soil depletion by short rotation forestry

13. International Climate Policy Hamburg Institute of International Economics International Climate Policy Risks of integrated projects t C Crediting for fuel wood use may lead to short rotation and lower C fixation C0C0 C1C1

14. International Climate Policy Hamburg Institute of International Economics International Climate Policy Small is beautiful? Conditions for source projects Renewable energy < 15 MW or Energy consumption reduction < 15 GWh y-1, or Emission reduction & emissions < 15 kt CO2e y-1, or Conditions for AR projects Net removal <8 kt CO2e y-1, and developed or implemented by low- income communities and individuals

15. International Climate Policy Hamburg Institute of International Economics International Climate Policy Small is beautiful? Combinations between source & sink ssc projects do not add up to one full- scale project Each activity to be treated separately Small PDD cost reduction EB-level practical problems (which Meth Panel is responsible, or both?)

16. International Climate Policy Hamburg Institute of International Economics International Climate Policy Outlook on further research Combine different scale activities Find suiting project examples Pooling on different levels & timescales Project quality indicators Options for co-financing the core activity –Ssc fund options –Potential ODA involvement in CDM Ssc A/R Ssc Bioenergy Lsc A/R Ssc Bioenergy Lsc A/R Ssc Bioenergy Lsc A/R Lsc Bioenergy

17. International Climate Policy Hamburg Institute of International Economics International Climate Policy Michael Dutschke Thank you for your attention!