Upload
others
View
2
Download
0
Embed Size (px)
Citation preview
The Development of CDM projects in Africa: the case for Ghana
reNew Africa
Enam Akoetey
08/04/2009 1reNew Africa Enam Akoetey
08/04/2009 2reNew Africa Enam Akoetey
Genesis of Kyoto Protocol
Need for compliance Anthropogenic GHGs risingThis rise has been witnessed in the last century and is expected to rise exponentially – unless urgent action is taken – when the earth’s atmosphere warms to between 2‐5°C – there would be irreversible climate change (atmospheric concentrations should be not be over 550 ppm – currently at 385 ‐450ppm – depending who is writing)
Who needs to meet itIndustrialised countries that have emitted large amounts of GHGs as they dependent on fossil fuels USA until recently was the worlds leading emitter, but China has overtaken
How to meet it ‐ international agreement with enforceable targets that have to be met within a specified time frame – 2008‐2012. GHG emissions must be reduced to 1990 levels.
08/04/2009 3reNew Africa Enam Akoetey
Market Based Mechanisms
CDM – For developing countries – Asia, Africa & Latin America JI ‐ economies in transition – mainly former soviet bloc AAU – assigned allowance unit
08/04/2009 4reNew Africa Enam Akoetey
How to create emission reductionUnder the United Nations Framework Convention on Climate Change (UNFCCC), basic rules ensure projects reduce
emissions –Use CDM‐EB Approved Methodologies or propose methodologies
‐Ghana proposed 2 so far [that I know] (AM0046 and a series of rejected methodologies for developing Rubber Plantations in WR)
Activity MUST NOT be “business as usual”
Key is to prove Additionality
‐Financial ‐ (demonstrate that CER revenue was considered and is needed to make project commercially viable and attractive)
IRR for projects that will generate other revenue streams – e.g electricity, compostNPV for projects that DO NOT generate other revenue streams
AR Additionality Afforestation – land should not have been forested (DNA definition of forest) in the last 50 years preceding action
(31/12/1989)Reforestation – land should not have been forested (DNA definition of forest) by 31/12/1989.
No ODA
EIA and Stakeholder Consultations
08/04/2009 5reNew Africa Enam Akoetey
Carbon Assets What is a Carbon Asset?It is the measurable advantage created from a project that contributes to the reduction of GHGs as a result of accepted international agreements.
How is it created?When an activity is undertake to abate or mitigate the emission on one of the 6 GHGs and verified by a third party according to a set of standards and methods.
Is there a timeline?Kyoto sets 2008‐2012 as the stipulated period within which GHG emission targets must be met by Annex I countries (industrialised)
Way forward –Negotiations are ongoing for a post 2013 commitment period where targets will be set to reduce GHG concentrations.
08/04/2009 6reNew Africa Enam Akoetey
Creating the Carbon Asset – CDM cycle
08/04/2009 7reNew Africa Enam Akoetey
CDM & AfricaHow we have fared ‐ 3.2% of projects in pipeline
What are the ChallengesFinance
Conservative credit market Risk perception –fuelled by abstract nature of ‘ carbon assets’Deficient risk analysis ‐
Capacity and knowledge Risks
PoliticalRegulatory Non‐delivery (monitoring)
Data to prove baselines – crucial for project is often unavailable or very hard to come by or put together Markets demands for large scale activities – usually in other host countries do not make Africa attractive Low‐carbon activities that exclude carbon reduction considerations
E.g. – banning of incandescent bulbs, hydro (large or small), thermal plants (single –combined cycle), Oil & Gas – upstream and downstream improvements activities
08/04/2009 8reNew Africa Enam Akoetey
CDM ‐ example projects Energy industries – renewable or non renewable sources –produce zero‐emission energy (wind, geothermal – Kenya, CCS – coal)Energy distribution ‐Mining and mineral exploration – methane capture – to energy Waste management Energy demand – e.g increase efficiency of production process Reforestation ‐ Trading Carbon
Geo‐engineering solutions will cost about $20 trillion to remove 50 ppm CO2. reforestation of degraded lands & improved agric practices can do the same . (source Peon Atmospheric Science Journal, 2008)
08/04/2009 9reNew Africa Enam Akoetey
Possible Solutions Carbon asset as collateral – to resolve commercial finance risks
Co‐development with banksCarbon pool or funds 0 with a share of credits
‘Schooling’ in emerging low‐economy (it’s the future)Acquisition of right market and project assessment tools
Address risksInsuranceAcquisition of risk assessment tools
Multi‐donor support to develop required data sets Restructuring of CDM rules – reduce transaction costs and increase threshold of small‐medium scale projects – EE savings was increased form 15GW to 60GW and 8ktCo2 to 15ktCo2 for small‐scale forestry activities
Host large energy projects ‐ with multiple benefits Energy security – for residential and economic use Spur industrial growth ‐ local and international participation as cost of production and energy intensity is lowerSpur regional development ‐ e.g According to Energy Commission – Keta has the wind speed of generating 2000MW of electricity – this can be connected to the grid and supplied to Togo, Benin and la Cote d’ Ivoire
Programmatic CDM
08/04/2009 10reNew Africa Enam Akoetey
Africa now hosts 93 projects, most of them in South Africa. One new project in Kenya was added in January.
08/04/2009 11reNew Africa Enam Akoetey
Regional distribution of CDM projects – 2009 This table shows that some regions are
behind: Latin America and Asia & Pacific host 96% of the projects.
08/04/2009 12reNew Africa Enam Akoetey
Developing & Managing Carbon Asset – Ghana experience
My experience in Ghana ‐opportunities abound ‐ energy efficiency, forestry, renewable energy, waste management ‐premier private sector actor ‐DNA support (EPA)‐time lag (knowledge gaps within public agencies – have lengthened process time)‐finance
How I have fared ‐built very useful strategic alliances ‐learning by doing challenges ‐ origination of CDM – demand‐side energy (AM0046 – now as PoA AMS II. C) ‐lack of finance – though contract exists
What needs to happen?‐risk assessment tools‐business models and planning ‐capacity to navigate CDM ‘minefield’Finance, Finance, Finance! – bold action required from local banks (old ways did not work – if they did we won’t be underdeveloped – creative finance – e.g
08/04/2009 13reNew Africa Enam Akoetey
reNew project pipelineNear term
Demand‐side energy efficiency expected to deliver 4.5million CERs over 10 year project lifetime (initially developed as large scale – AM0046, now PoA –AMS II. C)Reforestation of 5000 ha with 20 species of native, exotic, endangered, nitrogen fixing & fire retardants.
Short term (collaboration with Ashden Awards winner –SKG Sangha, India
Community bio digesters Improved cook stoves Cogeneration
08/04/2009 14reNew Africa Enam Akoetey
Opportunity for Africa – Yes!Meet MDGsCleaner development Build energy infrastructure & securityBuild environmental securityBuild food security Green jobs Wealth creation at rural level – small‐scale energy
08/04/2009 15reNew Africa Enam Akoetey
08/04/2009 16reNew Africa Enam Akoetey
08/04/2009 17reNew Africa Enam Akoetey