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GEF and CDM/JI: similarities, differences, linkages, synergies

GEF and CDM/JI: similarities, differences, linkages, synergies. GEF Training Workshop, Almaty, October 6-9, 2004. How your GEF experience can help in the world of carbon finance. UNFCCC and Kyoto Protocol, GEF and flexibility mechanisms Project-based mitigation: similarities and differences

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GEF and CDM/JI: similarities, differences, linkages, synergies

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  1. GEF and CDM/JI: similarities, differences, linkages, synergies GEF Training Workshop, Almaty, October 6-9, 2004

  2. How your GEF experience can help in the world of carbon finance • UNFCCC and Kyoto Protocol, GEF and flexibility mechanisms • Project-based mitigation: similarities and differences • Linkages and synergies between UNDP/GEF and CDM/JI projects • “Green Investment” Schemes

  3. UNFCCC, Kyoto Protocol and their mechanisms • UNFCCC, its objectives • GEF – financial mechanism of UNFCCC • Kyoto Protocol • Kyoto Mechanisms – CDM (Art. 12), JI (Art. 6), IET (Art.17) • Project-based mechanisms and cap-and-trade; fungibility • RBEC countries and KM – experience to date

  4. GEF and CDM/JI projects: similarities • Objectives: reduction/avoidance of GHG emissions • Incrementality and additionality • National priorities, national approval: OFP, DNA • GEF and CDM – participatory preparation • Project documentation – uniform formats

  5. UNDP/GEF and CDM/JI projects: similarities (contd.) • Incremental costs, baseline assessment/GHG reduction costs • M&E and M&V • STAP and CDM validation • CDM/JI – incorporate GEF methodologies and experience • Public and private participation

  6. UNDP/GEF and CDM/JI projects: differences • Transfer of emissions reductions, additional revenue stream • Public vs. private • CER and ERU price – market driven, more or less than “incremental costs” • “Market transformation” vs. ring-fenced quantifiable reductions • 2-party national approval/acceptance, international approval (CDM EB) • Accredited validators (CDM)

  7. UNDP/GEF and CDM/JI projects: differences (contd.) • Registration requirements • CDM – international certification (EB) • Institutional – new approval authorities • GHG assessment under KM – more detailed, more rigorous, more formulaic • M&V plans and protocols (audits)

  8. Linkages and synergies • GEF intervention improves enabling environment for CDM and JI – policies, awareness, market conditions • GEF helps to create capacity for development of CDM and JI projects • GEF fosters national review/approval and stakeholders participation • GEF projects – CDM/JI replication? • Carbon accounting • Co-financing? Parallel? …?

  9. CO UNDP/GEF experience – pathway to the CDM/JI world? • Access to government agencies – CDM/JI authorities • Contacts with project proponents, pipeline of project ideas/proposals • Knowledge of the country economy and development priorities and trends, contacts with public sector buyers • Project development experience/capacity, including participatory

  10. CO “value added” and possible roles • CDM/JI stampede – why join? • Why UNDP CO – project sponsors and investors, sellers and buyers prospective: project development, finance, else? • Why UNDP CO – government prospective • Possible roles: facilitation, capacity building (government, project developers, stakeholders), participation, advocacy • Country circumstances, RBEC experience to-date • What can be done now? • Capacity/infrastructure for CDM/JI? GEF role? • Sources of funds and revenue models

  11. “Green Investment” Schemes • AAU trading – possible economic growth constraints (deflation of “hot air” bubble) • AAU trading – pressure to demonstrate further GHG reduction commitment • AAU trading reserve • AAU trading – long-term considerations (beyound the first budget period)

  12. “Green Investment” Schemes – contd. • Advance sale of AAUs with reinvestment of proceeds in projects (JI-like) and replenishment of AAUs • Clear criteria and procedures • Financial intermediation – new mechanisms, existing environmental funds (debt-for-nature)

  13. “Green Investment” Schemes – contd. • Bundling of small project, GHG reduction portfolios • GEF connection/parallels: joint mechanism, umbrella financing, revolving fund experience • Possible applications for CDM –PCF Central American RE Fund experience

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