IMPLEMENTING MALAYSIAS 40% INTENSITY REDUCTION INDICATOR: THE KEY - - PowerPoint PPT Presentation

IMPLEMENTING MALAYSIA’S 40% INTENSITY REDUCTION INDICATOR: THE KEY ROLE OF THE PRIVATE SECTOR MPMA Sustainability Conference September 3, 2013 Tropicana Golf and Country Club

MINISTRY OF NATURAL RESOURCES AND ENVIRONMENT, MALAYSIA

• Dr. Gary W. Theseira

ENVIRONMENT MANAGEMENT AND CLIMATE CHANGE DIVISION

Outline

 What the 40% Intensity Reduction Indicator is (and isn’t)  Rationale and Context of the Indicator  Role of Benchmarking – the EU benchmarking system  The Malaysian concept of NAMAs  MYCarbon Voluntary National Corporate GHG Reporting

Programme

 Concluding thoughts

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“voluntary reduction of up to 40% in terms of carbon emission intensity of GDP by the year 2020 compared to 2005 levels.” “….conditional on receiving the transfer of technology and finance of adequate and effective levels from Annex 1 countries” “We remain committed to ensure at least 50% of

• ur land area remain as forests as pledged in the

Rio Summit. Currently our natural forests and agriculture crop plantations combined cover 75% of the country’s land area.”

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Malaysia’s Voluntary Indicator Announced

Prime Minister YAB Dato’ Sri Mohd. Najib bin Tun Abdul Razak at the 17th December 2009, during his address to the 15th Conference of the Parties to the UNFCCC

Rationale: Political Bandwagon? Unilateral Altruism?

 Objective: Affirmation of the Centrality of the Convention  All decisions in accordance with the Principles, Procedures

and Annexes of the UNFCCC

 Timing and Venue – COP 15 Objective to forge an agreement to

implement the Bali Action Plan (BAP)

 Voluntary nature of the indicator – Distinction between Articles

4.1 and 4.2, 4.3, 4.4

 Article 4.1- Commitment to formulate and implement

programmes containing measures to mitigate climate change

 Article 4.2 – Shall take mitigation measures by limiting

anthropogenic emissions

 Articles 4.3, 4.4 and 4.5 – Provide New and Additional

Finance, assist Adaptation, Transfer Technology

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Rationale: Is there a back door? Are we being disingenuous?

 Caveats on financing and technology transfer relate to Article 4.3  Agreed full costs for actions under Article 12.1  Agreed full incremental costs for actions under Article 4.1  Transfer of Technology for actions under Article 4.1  ‘Up to’ 40% - to highlight Article 4.7 – The extent to which

developing country Parties will … implement their commitments … will depend on the … implementation by developed country Parties of their commitments … to financial resources and transfer of technology

 … take … into account that economic and social development and

poverty eradication are the first and overriding priorities of the developing country Parties.

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The rationale for adopting the voluntary index

 Index measures emissions intensity with respect to whatever is

in the denominator

 For GDP – a measure that indicates the level of decoupling of

emissions from economic development

 Intensity of GDP  Tends to be low in countries with low HDI due to low GHG

emissions

 Tends to be high in rapidly developing countries, newly

industrialized countries, and oil-producing countries due to energy demand and unrealized efficiencies

 Tends to be low in wealthy and progressive developed

countries due to wealth generation, high efficiency and low- GHG energy sources

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But what is “emissions intensity of GDP” anyway?

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time emissions GDP emissions GDP time time time time time emissions GDP INTENSITY INTENSITY INTENSITY

What are potential intensity reduction scenarios

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Business as Usual (BAU) INTENSITY

Best case Nominal case Worst case

2005 2020 2013 40% Intensity Reduction Indicator

What are the implications of the possible outcomes?

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Achieve – not assisted Achieve – assisted Don’t achieve – not assisted Don’t achieve – assisted

• Inconsistent with the Convention
• Indicator not sufficiently ambitious
• Malaysia sufficiently developed – no

further assistance required

• Favourable economic conditions
• May trigger stringent ADP

commitments

• Consistent with the Convention
• Meaningful finance, technology

transfer and capacity building received

• Favourable economic conditions
• May trigger stringent ADP

commitments

• Consistent with the Convention
• Meaningful finance, technology

transfer and capacity building not forthcoming from developed countries

• Unfavourable economic conditions
• May result in more measured ADP

commitments

• Inconsistent with the convention
• Insufficient or ineffectual finance,

technology transfer and capacity building

• Unfavourable economic conditions
• May result in more measured ADP

commitments

The nature of other voluntary pledges

 Of 154 developing countries, 85 associated or supported the

Accord; 37 submitted Nationally Appropriate Mitigation Actions

 Voluntary intensity reduction pledges have been announced by

China (40-45%) and India (20-25%) relative to 2005 levels

 Other developing countries have pledged absolute percent

reductions, but relative to a theoretical/modeled BAU scenario

 All baselines, reference levels and BAU scenarios are nationally

defined and implemented

 All include conditional elements involving enhanced mitigation

ambition by developed countries, financial assistance and technology and transfer.

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2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 1 10 100 1000 10000 GDP per Ton Emissions Log GDP in USD

GDP Generated Per Ton of Emissions – Comparison of Malaysia with the Lowest and Highest Intensity Parties

Low Intensity High Intensity MALAYSIA

 Setting performance targets for industry regulation;  Definition of GHG emission caps at the sectoral, national,

regional or international level;

 Assessment of national or regional ‘comparability’;  Determination of carbon credits that are granted or

allocated under a cap-and-trade or flexible mechanisms of the Kyoto Protocol or of the new post-2012 period; and,

 Calculation of the carbon intensity or footprint of products

for setting a domestic carbon tax or a border carbon adjustment.

Role of National and International Benchmarking

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 In EU Emissions Trading System a benchmark is not an

emission limit, standard or target

 it is simply the threshold for what amount of allowances an

installation gets for free

 fixed maximum amount of free allowances for industry

 52 benchmarks cover 75% industrial emissions in EU ETS  Starting point for benchmark values: average performance

• f 10% most efficient installations in (sub)sector

 Main principle: one product – one benchmark  Incentive to improve performance  Maximum amount of emissions covered by a feasible

number of product benchmarks

 Criteria: emissions, number of installations and

homogeneity of products

Benchmarking in the EU context

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 Emphasis on transparency

 Methodologies  Activity Data  Emission factors  MRV

 Toward development of a National Registry (Capacity Building

Under Way)

 Linked to National Inventory Process  Feeds both BAU and Mitigation Scenarios  Facilitated by National Carbon Disclosure Programme (under

development)

Malaysia’s understanding of Voluntary Mitigation Actions

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Use of current corporate and national data sources and statistics

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Use of current corporate and national data sources and statistics

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Opportunities for emissions reductions

 Energy efficiency measures  Replacement of fossil fuels with renewable fuels/energy sources

 Direct combustion  Treatment followed by combustion

 Avoidance of emissions (methane/CO2)

 Disposal in landfills  Anaerobic digestion  Burning/oxidation of wastes to segregation and recovery of chemicals

 Sequestration in durable materials

 Laminated products  Fibre-board products

 Sequestration in the environment

 Plant  Soil

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On-going Emissions Reduction/Avoidance Activities

 Physical oil palm plant

 Trunk  Fronds

 Peat soil management – water table depth and fire management  CPO – B5 diesel blend (114.5 million litres)  Mesocarp – more than 2/3 of a ton per ton of CPO produced

 Steam/Electricity/FIT

 EFB – more than a ton per ton of CPO produced

 Electricity/Briquettes/Co-composing with POME/Fertilizer/Fibre products

 POME – 3.25 tons per ton of CPO produced

 Methane yield – 40kg/ton CPO

 Post-consumer waste cooking oil-based bio-diesel  BACKSTOP – Forest Conservation and Sustainable Forest Mgt.

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Forest-related Emissions Reduction/Avoidance Activities

 Maintenance of forest carbon stocks through conservation  Emissions reduction through Reduced Impact Logging (RIL)  Sustainable management of production forest  No opportunities for Afforestation and Reforestation (AR) CDM  Current attention on REDD+  Reducing emissions from deforestation and forest degradation  Sustainable management of forests  Enhancement of forest carbon stocks  Forest conservation  Five carbon pools - Aboveground and belowground biomass,

dead wood, litter and soil

 Stock assessment using allometry and biomass expansion factors

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• MYCarbon – National Corporate GHG Reporting

Programme for Malaysia

• MYCarbon aims to encourage corporate and public
• rganisations/entities to report their GHG emissions

using recognised standard and guidance Programme Name & Objectives

• MYCarbon – Stage 1: Voluntary reporting for

companies / organisations that meet the criteria and thresholds

• Level of emissions and energy usage to be the key

threshold criteria Legal Basis and Sector Focus

• 6 GHGs under the Kyoto Protocol
• Other IPCC GHGs optional

Reported GHG

MAIN ELEMENTS OF MYCarbon

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• Environmental Management and Climate Change Division,

Ministry of Natural Resources and Environment Malaysia (proposed)

Focal Point

• GHG Protocol – A Corporate Accounting and Reporting

Standard; ISO 14064 can be used if verification is required

• Annual reporting
• Web-based submission (future)
• Corporate level report is required, activity level is optional

(confidentiality)

• Verification (optional) – 3 reporting classes
• Reduction targets, strategy and action plan required

Reporting

• Organisation Boundary – Operation control as main

criterion.

• Operational Boundary:-
• Scope 1: Direct emissions (mandatory)
• Scope 2: Purchase energy (mandatory)
• Scope 3: All other indirect emissions (optional)

Reporting Boundaries

MAIN ELEMENTS OF MYCarbon

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MYCARBON Framework Documentation

MYCarbon Introduction Booklet MYCarbon Framework Specification

What about ‘Market Mechanisms’?

 Associated with the pre-Bali scenario  No call for emissions reductions in developing countries  Mitigation through CDM only  Post-Bali  Developing countries undertake NAMAs  Credits sold to other countries cannot be counted  Kyoto Protocol Escapees - bilateral offset mechanisms outside

the Convention

 Offsets divert funds from awareness raising, piloting and

research into lower emissions technologies and rationalize BAU emissions

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… and what about CCS?

 Promoted largely by fossil fuel exporters as a means of countering

reduced demand for fossil fuels as countries accelerate the implementation of mitigation actions

 Capture GHGs, transport to certified reservoir, pressurize and

inject, and monitor forever

 Theoretical feasibility from Enhanced Oil Recovery?  Issues of concern  Environmental integrity and human safety  Up-front capital costs, operating costs, resource consumption  Liability and Permanence issues  Public opinion and political viability  As yet no basis for the issuance of permits within a legal and

regulatory framework

Conclusions

 Although we are negotiating a new instrument under

the Convention, all Principles and Processes of the Convention need to be defended and preserved – nothing redefined

 The Intensity Indicator is both measures and informs  The dual nature of the indicator (hard target –

domestic/conditional target – international) and the rationale for this approach needs to be understood

 Developed country pledges continue to be woefully

inadequate and adaptation and mitigation finance and technology transfer unrealized.

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THANK YOU

Gary W. Theseira gtheseira@nre.gov.my +603 8886 1131/+6012 205 8454

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