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The Integration of PoA and NAMA; how can one support the other

The Integration of PoA and NAMA; how can one support the other. Prepared by South Pole on the basis of analysis conducted for: PoA Support Center. Ingo Puhl South Pole Carbon Asset Management Ltd. Bonn, 8. May 2011.

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The Integration of PoA and NAMA; how can one support the other

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  1. The Integration of PoA and NAMA; how can one support the other Prepared by South Pole on the basis of analysis conducted for: PoA Support Center Ingo Puhl South Pole Carbon Asset Management Ltd. Bonn, 8. May 2011

  2. The Big Picture: CDM projects and programs will be nested within NAMA frameworks NAMA MRV, i.e. IPCC 2006 NAMA target GHG PoA baseline emissions PoA CPA emissions CDM-style MRV • Principal Observations • A NAMA creates a voluntary emissions target in a developing country on sector or sub-sector level. • The environmental integrity of a NAMA target (MRV, enforcement) is managed on the NAMA level by a national authority. • PoA baseline emissions are either a) already coherent with NAMA target trajectory (on aggregate) or b) a share of CER is used for domestic compliance. • Implications • A NAMA framework that surrounds a PoA facilitates the simplification of CDM/PoA design because environmental integrity is controlled on NAMA level. • Existing CDM/PoA “building blocks” can be used on NAMA level for NAMA design

  3. Pre-Conditions for PoA Simplification; Analogy to Joint Implementation track 1 & 2 Minimum requirement for JI track 2 Additional requirements for JI track 1

  4. PoA that are located “under a cap” should benefit from simplification, in analogy to JI procedures • Streamlined Registration and Inclusion Process • Determination of eligibility, monitoring & verification subject to national rules and procedures (track 1 only) OR streamlined determination & verification process involving an AIE (DOE) and two JISC members advised by experts. • Streamlined Process to Determine Baseline and Additionality • Choose an appropriate method using traceable and transparent information showing that the project will lead to reductions of GHG emissions below baseline. • MRV • Appropriate monitoring plan, allowing combinations of CDM methods. • Defined materiality thresholds

  5. PoA Building Blocks for Good NAMA Design:How can the NAMA concept benefit from PoA experience?

  6. Benefits of PoA – NAMA Integration • Procedural Simplification in PoA design and registration • PoA/CPA additionality is derived from the NAMA and using procedures controlled by the host country with a strong link to its domestic policy. • PoA can develop baseline derived from NAMA target (close to benchmark approach) • Existing mechanism to implement “credited” NAMA instead of new mechanism • NAMA could be operated mainly through (one or more) policy-driven PoA in conjunction with ODA-style capacity building/support interventions. • Surplus ER (outside of PoA) could be transacted through bilateral output-based assistance approach (OBA). • Shifting responsibility for the protection of environmental integrity to host country Parties, de-centralize the role of CDM EB • The Party in control of NAMA compliance ensures environmental integrity on system level; typical CDM EB concerns over PoA level environmental integrity become less relevant.. • I.e. DOE liability for wrongful inclusion can be addressed through NAMA eligibility criteria.

  7. Recommendations/Next Steps • Explore the feasibility and benefits of this approach for an increasing number of case-studies • CDM method usability vary widely depending on the underlying activity. • Availability of substantial benefits need to be properly understood by Parties. • Integrate the PoA/CDM reform process agenda with NAMA negotiations to facilitate integration • Define requirements for the design of NAMA-level estimation methods for GHG emission inventories (based on national GHG inventory guidelines). • Define requirements for the formulation of NAMA targets comparable to “assigned amount units”. • Prepare CDM EB guidance on determination of additionality for projects/programs that are nested in eligible NAMA frameworks; in accordance with JI-style procedures on additionality for JI (track 1 and 2). • Prepare CDM EB guidance on MRV flexibility on the activity level in accordance with JI-style procedures on MRV procedures (track 1 and 2).

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