[PDF] - IGES view on new market IGES view on new market- IGES view on new PDF Document

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Institute for Global Environmental Strategies

Towards sustainable development - policy oriented, practical and strategic research on global environmental issues

IGES view on new market IGES view on new market- IGES view on new market IGES view on new market based mechanisms based mechanisms based mechanisms based mechanisms

Views expressed in this presentation is based on the submission to the UNFCCC

n the view of “one or more market-based

h i ” F b 2011 7 June 2011 mechanisms” on Feb. 2011. 7 June 2011 IGES Side Event at SB34

K hi KOAKUTSU Kazuhisa KOAKUTSU

Deputy-Director, Market Mechanism Group, IGES

We need New Market Mechanisms We need New Market Mechanisms (NMM) in addition to CDM (NMM) in addition to CDM

The CDM has created many opportunities for the mitigation projects in developing country. We see more potential in the CDM and the reform of the CDM is necessary in order to enhance efficiency y y

f the system and maximize its potential.

However we also need to recognize that there are However, we also need to recognize that there are more opportunities that the CDM has not tapped. E g Domestic emission trading offset scheme E.g. Domestic emission trading, offset scheme, policy-based mitigation activities (low carbon development policy) etc development policy), etc.

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Elements of New Market Mechanisms Elements of New Market Mechanisms (NMMs) (NMMs)

Principles

I t

ti l F k t t k t h i

International Framework to support market mechanisms
Differentiation of accounting system from KP system
M

fl ibilit f th d i f th t

More flexibility for the design of the system

Governance

Establish “Market Mechanisms Committee” under COP
Develop robust MRV guideline

g

Certify emission reductions (not the issuance of credit)
Manage international accounting

g g

Robust MRV

MRV guideline
MRV guideline
Third party GHG validation/verification (DOE, ISO14065) 3

Governance and Accounting Governance and Accounting

UNFCCC UNFCCC UNFCCC UNFCCC

Market Market Mechanisms Mechanisms Market Market Mechanisms Mechanisms CDM EB CDM EB CDM EB CDM EB Mechanisms Mechanisms Committee Committee (MMC) (MMC) Mechanisms Mechanisms Committee Committee (MMC) (MMC) (MMC) (MMC) (MMC) (MMC) Int’l Accounting system Int’l Accounting system Int l Accounting system Int l Accounting system MRV Guideline MRV Guideline Non Annex Non Annex-

I

I Non Annex Non Annex-

I

I Annex Annex-

I

I Annex Annex-

I

I

N ti l A ti N ti l A ti N ti l A ti N ti l A ti National Accounting National Accounting system for NMM system for NMM National Accounting National Accounting system for NMM system for NMM 4 Finance, CB, Tech. Finance, CB, Tech. Finance, CB, Tech. Finance, CB, Tech. NAMA, Sectoral, NAMA, Sectoral, Project Project NAMA, Sectoral, NAMA, Sectoral, Project Project

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What is the Guideline for MRV? What is the Guideline for MRV? What is the Guideline for MRV? What is the Guideline for MRV?

CDM < MRV Guideline for NMM < ISO14065

Guidelines are designed to achieve a uniform approach to compliance with the applicable standards or procedures

CDM CDM-PDD PDD CDM CDM-PDD PDD

issued by the CMP and/or the EB. (EB53 Annex 38)

MRV Guideline MRV Guideline MRV Guideline MRV Guideline ISO14065 ISO14065 ISO14065 ISO14065 CDM CDM PDD PDD

A.

A. General

General description description

CDM CDM PDD PDD

A.

A. General

General description description

MRV Guideline MRV Guideline

Boundary

Boundary

Category

MRV Guideline MRV Guideline

Boundary

Boundary

Category

ISO14065 ISO14065

Boundary
GHG source

ISO14065 ISO14065

Boundary
GHG source

B.

B. Baseline/Monito

Baseline/Monito ring ring C Crediting period Crediting period B.

B. Baseline/Monito

Baseline/Monito ring ring C Crediting period Crediting period (NAMA, (NAMA, Sectoral, etc) Sectoral, etc) Reference Reference (NAMA, (NAMA, Sectoral, etc) Sectoral, etc) Reference Reference

Baseline

scenario ER calculation

Baseline

scenario ER calculation C.

C. Crediting period

Crediting period D.

D. Environmental

Environmental impacts impacts C.

C. Crediting period

Crediting period D.

D. Environmental

Environmental impacts impacts

Reference

Reference scenario/emissi scenario/emissi

n
n
Reference

Reference scenario/emissi scenario/emissi

n
n
ER calculation
Monitoring
ER calculation
Monitoring

5 impacts impacts E.

E. Stakeholder

Stakeholder impacts impacts E.

E. Stakeholder

Stakeholder

n
n
Monitoring

Monitoring

n
n
Monitoring

Monitoring

Possible scenarios for Market Mechanism? Possible scenarios for Market Mechanism?

AWG AWG KP KP AWG AWG KP KP

AWG AWG-KP KP AWG AWG-KP KP

AWG AWG LCA LCA AWG AWG LCA LCA

Scenarios 1 Scenarios 1 Scenarios 2 Scenarios 2 Scenarios 3 Scenarios 3

AWG AWG-KP KP AWG AWG-KP KP

AWG AWG-KP KP +AWG AWG-

LCA

LCA AWG AWG-KP KP +AWG AWG-

LCA

LCA

AWG AWG-LCA LCA

Pl d & Pl d &

AWG AWG-LCA LCA

Pl d & Pl d &

AAU AAU AAU AAU

AAUs AAUs+ AAUs AAUs+

Pledge & Pledge & Review Review

+

Pledge & Pledge & Review Review

+

AAUs AAUs

+

AAUs AAUs

+ Pledge & Pledge & Review Review Pledge & Pledge & Review Review

+ New Market New Market Mechanisms Mechanisms + New Market New Market Mechanisms Mechanisms

CDM+JI+IET CDM+JI+IET CDM+JI+IET CDM+JI+IET CDM+JI+IET CDM+JI+IET

New Market New Market M h i M h i

CDM+JI+IET CDM+JI+IET

New Market New Market M h i M h i Mechanisms Mechanisms (Including (Including CDM CDM) ) Mechanisms Mechanisms (Including (Including CDM CDM) ) Mechanisms Mechanisms Mechanisms Mechanisms

CDM CDM could be could be utilized utilized under any under any scenarios scenarios

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CDM CDM could be could be utilized utilized under any under any scenarios scenarios New New market mechanisms market mechanisms should compete with should compete with CDM CDM

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Approach for Accounting Approach for Accounting

KP Units AAUs AAUs AAUs AAUs RMUs RMUs RMUs RMUs CDM/JI CDM/JI CDM/JI CDM/JI IET IET IET IET

+ + ± Emission Emission Cap for Cap for AI AI Emission Emission Cap for Cap for AI AI

=

AI AI AI AI

New Market Mechanisms Adjusted Adjusted E i i E i i Adjusted Adjusted E i i E i i = National National Inventory Inventory National National Inventory Inventory Certified Certified ER b ER b Certified Certified ER b ER b

±

Emissions Emissions For AI & NAI For AI & NAI Emissions Emissions For AI & NAI For AI & NAI y ERs by ERs by MMC MMC ERs by ERs by MMC MMC

±

National National 7 National Communication National Communication

Summary and Issues Forward Summary and Issues Forward Su a y a d ssues

a d

Su a y a d ssues

a d

The objective of new market mechanisms (NMMs) is to recognize various approaches (NMMs) is to recognize various approaches for ERs activities in developing countries and promoting them through certification. NMMs should help developing countries to NMMs should help developing countries to achieve low carbon development while utilizing market based approach domestically utilizing market-based approach domestically. Since it is early stage, we need to develop and robust MRV guideline and pilot test NMMs in order to show the effectiveness of NMMs in order to show the effectiveness of the mechanism.

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