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CAPACITY DEVELOPMENT for theCAPACITY DEVELOPMENT for theCLEAN DEVELOPMENT MECHANISM for CAMBODIA (CD4CDM) CLEAN DEVELOPMENT MECHANISM for CAMBODIA (CD4CDM)

22ndnd National Workshop on National Workshop on

Capacity Development Capacity Development for the Clean for the Clean

Development MechanismDevelopment Mechanism

Organised by the Ministry of Environment with Support from UCCEE and AIT

04 November 2003Phnom Penh, Cambodia

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International Status of CDM

Bridget McIntosh Advisor, Climate Change Office

CDM GOALS•assist

developing countries in achieving

sustainable development

•assist developed countries in achieving

Kyoto Protocol

compliance

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Presentation Overview

Status of CDM and the Kyoto Protocol

Size of the international carbon market

Who are the CDM carbon buyers and prices?

Who are the CDM carbon sellers?

What are the main CDM project types?

Approval status of CDM projects

Status of forestry and agriculture in CDM

CDM Case Study

Summary of Carbon Market

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Status of CDM + Kyoto Protocol Kyoto Protocol not yet in force - must be

ratified by 55 countries + represent 55% total global greenhouse emissions

To date, 117 countries have ratified representing 44.2% of emissions If Russia ratifies the Kyoto Protocol, it will

reach 55% and enter into force Russia is holding out for ‘better deal’ and

studying the impacts of signing the protocol USA and Australia withdrew from the

Protocol - reduces size of carbon market

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Size of CDM Market Worldwide demand for emission

reduction 700-800 MtCO2eq/yrWithdrawal of US at 25% emissions

limited market size Estimate 100-300 MTC02/yr for CDM

Equates to 750,000 10MW hydro projects CDM forestry activities limited to 1%

of developed countries total reductions Limits size of CDM forestry market

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Main CDM CER buyers to date

Source PointCarbon Sept 03 CERs issued 2005 (produced -2004)

Other

CERUPT

NCDF

PCF

Dutch Government CDM target 67 MtCO2eq

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Who are the CDM buyers? Multilateral Funds - pool $ from different

carbon buyersPrototype Carbon Fund - WB fund (6

governments; 17 companies) $180mCDCF - Community Development Carbon

Fund. WB fund- target $100m. Focus on small scale projects. target for LDC

BioCarbon Fund - target $100m; approved last month, calling for subscription.

Netherlands CDM Facility - $35m managed by WB

spread risk over projects + countries

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Who are the CDM buyers? Cont.

Dutch Government Tender process - called CERUPT - 18

projects selected (75% renewables)Allocate funds to other multilateral and

private banks - International Finance Corporation- Latin American Bank CAF- Rabo Bank- WB CDCF, PCF

Bilateral projects, private companies

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Bagasse6% Biomass

8%

Waste21%

Geothermal12%Forestry

4%

Industrial Energy Efficiency

18%

Small hydro12%

Wind14%

N20 Removal5%

PCF Project Types

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Reductions by country

Brazil

Indonesia

Panama

India

Others

Where are the projects?

Eg Costa Rica, Chile

No host country approval in Brazil

Source PointCarbon Sept 03

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Status of CDM Projects Currently 49 projects already

contracted, in process of CDM Exec Board approval

many projects in finalisation stageRough estimate of 600 projects at pre-PDD

stage30 Project Idea Notes submitted to CDCF40 Project Idea Notes submitted to

BioCarbon Fund360 Project Idea Notes for PCF (only 5-10%

are signed) Not all these will make it through

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Approval status of CDM projects Baseline methodology

must be approved by the CDM executive board for projects larger than 15MW, reduce 15,000 t CO2e -

35 projects have been submitted since opening in April. 6 baselines approvedSept Round - 14 projectsColombia Wind 19.5MW Oil Field Gas Recovery and Utilization2xSugar waste co-generation Municipal Solid Waste to Energy India

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Success rate

Source PointCarbon Sept 03

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Bioenergy Case Study - India 18 MW Bioenergy Project Tamilnadu

Use crop, juliflora waste to create electricity

Project located in remote rural indigenous area 800sq km; 93 villagesAgricultural area - 75% people involved in

rice growing, cotton, ground nuts. Wood from wild juliflora for charcoal.

Revenue stream to local indigenous farmers - $6/tonne biomass waste

Employment - collection of biomass Improved electricity infrastructure

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Carbon 800,000t CO2eq over 10 years Baseline calculation

Historical average emissions for grid Based on coal, lignite, oil, gasAnalysis of future electricity supplies based

on fossil fuels plus improved efficiency Deduct emissions from transport of waste

Monitoring and Verification PlanMonitor electrical output, biomass usedEmissions from gridEmissions from transport of waste

Bioenergy Case Study - India cont.

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Status of forestry + agriculture in CDM

Rules for land use activities and CDM being finalised at COP-9 Dec 2003.

Considerations include:Forest definitionsAccounting methodologiesBaseline methodologiesPermanence of CERsSimplified methodology for small scale

Currently using definitions for Annex 1 countries

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Summary of CDM carbon market

Dutch and WB Multilateral Funds dominated to date. New funds entering - esp Japan.

Many projects in pipeline Renewables preferred project type Investment preference: neighbouring

countries; Latin America; large, well-known countries

Price preference: indicatively 3-6.5 USD/tCO2eq (limited data); some willing to pay more for “quality CERs”