Sri Lanka’s Organizing Framework for Scoping of PMR ac9vies Lanka... · Sri Lanka is currently exploring the possibility of market instruments in the energy sector through scaled-up

SriLanka’sOrganizingFrameworkforScopingofPMRac9vi9es

MinistryofMahaweliDevelopment&Environment

H.M.BuddikaHemashantha,CEO,SriLankaClimateFund27April2016

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Outline

1.  Policycontext:Domesticmitigationpoliciesandemissionpro7ile

2.  Technicalbuildingblocksofmarketreadiness:relevantsectors&targetareas(INDCs,NAMAs),andcorereadinesscomponents(MRV&registrytracking,capacitybuilding,SLCCS)

3.  Organizationandconsultations:PMRfocalpoint,technicalpartner,consultationprocess,andotherpartners

4.  Organizationofworkandestimatedtimeline

5.  Conclusions–SummaryofmarketreadinesspriorityareasforPMRsupport

1.Policycontext:DomesHcmiHgaHonobjecHvesandemissionsprofile(1/7)

1.1PolicycontextandobjecHves–NaHonalPolicyonmiHgaHon

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❑  Becomingenergyself-suf7icientby2035

❑  Increasingforestcover

❑  ImplementingaGreenTransportSystem

❑  ImplementingaFuelQualityRoadMap

❑  Multi-resourcewatershedmanagementtoimprovewateravailabilityandretention

Source:LongTermGenerationExpansionPlan(LTGEP)2015-2034,CeylonElectricityBoard;GovernmentofSriLanka

ShareofNCREinElectricityMix

12%

20%

0%

5%

10%

15%

20%

25%

2015 2020


1.1PolicycontextandobjecHves–IntendedNaHonallyDeterminedContribuHons(INDCs)

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◆  SubmittedtoUNFCCCinOctober2015

◆  Identi7ied7ivemajorsectors:energy,transport,forests,industryandwaste.

◆  IntendstoreducetheGHGemissionsagainstBusiness-As-Usual(BAU)scenarioby

7%

23%

4%

16%

3%

7%

0%

8%

15%

23%

30%

UncondiHonally CondiHonally

INDC Powersector otherfoursectors


1.1PolicycontextandobjecHves–ExisHngstrategiesforachievingtargets

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RenewableEnergyTargets SriLankaNextProgram

◆  Ablue-greendevelopmentstrategyforsustainablegrowth

◆  BlueDevelopment(Oceaneconomy)includes:❑  Identifypotentialforoffshorewind

andOceanicThermalEnergyConversion

❑  Sustainablyutilizeoceanic7ishandothermarinebiologicalresources

❑  Exploreoceanicmineralresources

◆  GreenDevelopmentincludes:❑  Greenenergygeneration❑  Sustainableagriculture❑  Greenbuildingsandtransport❑  Eco-friendlyindustrialproduction

◆  SriLankahasvastuntappedwind,solar,

biomass,biogas,andwaveenergyresources

◆  SriLankahassetambitioustargets:

❑  Becomeenergyself-suf7icientby2035

❑  Achieve20%energygenerationfrom

Non-ConventionalRenewableEnergy(NCRE)sourcesby2020

❑  Reducecarbonfootprintofenergysectorby5%by2025


1.1PolicycontextandobjecHves–InterestinMarketMechanisms(1/2)

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CleanDevelopmentMechanism(CDM):◆  AsDesignatedNationalAuthority,theClimateChangeSecretariathasawardedseverallettersofapprovaltoCDMprojectsthatmeetthecriteriaforsustainabledevelopment.

◆  SriLankaalsoaimstodevelopamechanismfortradingCerti7iedEmissionsReductions(CERs).

CDM Number MW/year tCO2eq

Registeredprojects 22 178 605,236peryear

CERsissued 8 60 882,536total



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SriLankaCarbonCreditingScheme(SLCCS):◆  SriLankahasinstituteddomesticcarbonstandardsthroughitsCarbonCreditingScheme(SLCCS)forregulationandregistryofprojectsthatprovidecarbonoffsets.

◆  ProjectsthatmeetSLCCSeligibilitycriteriaareregisteredandareeligibletoreceiveSCERs(SriLankanCerti7iedEmissionReductions)



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CarbonPartnershipFacility:◆  SriLankaiscurrentlyexploringthepossibilityofmarketinstrumentsintheenergysectorthroughscaled-upcarboncreditingactivities(SCA)withthesupportfromtheWorldBank

◆  TheobjectiveistofacilitatetheachievementofSriLanka’sNCREexpansiongoalof20%NCREby2020.

Voluntaryemissionsreductions:◆  UnderArticle6oftheParisagreement,Partiescanalsoengageonavoluntarybasisincooperativeapproacheswithinternationallytransferredmitigationoutcomestowardsnationallydeterminedcontributions,providedthereisnodoublecounting.

◆  SriLankahasshowninterestinseveralvoluntaryemissionreductionprogrammes,eg-feasibilitystudytoimplementJointCreditingMechanismintransportsector


1.2Overviewofcountry’sGHGemissions

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SriLanka’sGHGemissionwasapproximately0.78tonsofCO2percapitain2012,farbelowtheworldaveragevalueof4.44,andlowerthanmostofitsneighboringcountries.

Source:UNFCCCcountrybrief,EmissionDatabaseforGlobalAtmosphericResearch(EDGAR)

'-

8

16

24

32

1990 1995 2000 2005 2010 2011 2012

tCO2eX(1

06)

HistoricalGHGEmission

2.Technicalbuildingblocksofmarket-readiness(1/8)

2.1Takingstockofrelevantsectorsandtargetareas(1/2)–IntendedNaHonallyDeterminedContribuHons(INDCs)

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Transport Industry Waste Forestry

◆  EnergysectortargetsunderSriLanka’sINDCssubmittedtoUNFCCC❑  UnconditionalTarget:Annualemissionreductionfromexistinghydro,Non-Conventional

RenewableEnergy(NCRE)andfuturehydrodevelopmentsof4%reductionin2030againstthe2010baseline

❑  ConditionalTarget:EmissionreductionthroughfutureNCREdevelopmentsof16%in2030comparedtothelikelydemandin2030

Sectoremissionswillbereducedthroughmodernizationandfacilitationtofollowrecognizedstandards

OtherSectors

Source:SriLanka’sINDCsubmittedtoUNFCCC,2015

0%

40%

0%10%20%30%40%50%

2014 2030

39%65%

0%

18%

35%

53%

70%

2014 2030

30% 32%

20%

30%

40%

2015 2020

Shareofgreenfuelledpublictransport WastecollecHonrate Forestrycover


2.1Takingstockofrelevantsectorsandtargetareas(2/2)–NaHonallyAppropriateMiHgaHonAcHons(NAMAs)

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NationallyAppropriateMitigationActions(NAMAs)

Transport Energy

❑  DraftplantoestablishBusRapidTransportSystemsubmittedforreview

❑  FacilitatedbyGlobalEnvironmentFacility(GEF)

❑  TobeimplementedbyMinistryofInternalTransport

❑  Disseminate1000bio-digesters,1300highef7iciencymotorsinteaindustry&205solarPVnetmeteringsystemswithbatterystorage

❑  TobeimplementedbySEAandMinistryofEnvironmentinpartnershipwith

UNDP

◆  TwoNAMAsarebeingdevelopedforthetwoprioritysectors:energy&transport

◆  GiventheemphasisoftheINDCs,theindustrialandwastesectorsmayalsobeconsideredfordevelopmentofmarketmechanisms


2.2CoreReadinessComponents(1)–MRVSystems&registrytracking(1/2)

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Secretary/EnvironmentandNaturalResources

ClimateChangeSecretariat

CDMStudyCenters

CDMExpertCommigee

NGOs

GovernmentAgenciesPrivateSector

CDMProjectDevelopers

Source:GlobalAffairsDivision,MinistryofEnvironmentandNaturalResources,GovernmentofSriLanka,2000

◆  AnexcelbasedcarbonregistryhasbeenimplementedunderSLCCSbySLCF◆  ParticipationinCPF&NAMAshelptostrengthenMRVinenergysector◆  DevelopmentofaneffectivenationalMRVsystemhelpstostreamlinemonitoring,reporting,andveri7icationofthemitigationactivitiesinthesectors



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◆  PMRsupportcanhelpstrengthenSriLanka’sMRVsystems,therebyencouraginginvestmentsinclimate-friendlydevelopmentactivities,by:

❑  Improvingdatamanagementandvalidationprocesses

❑  Buildinginstitutionalcapacitytodevelopdomesticcarbonmarketsandeffectivelyengageininternationalmarkets(e.g.throughbilateraloffsetschemes)

❑  Buildingawarenessandcon7idenceinSLCCSprocess,aswellasdevelopprocedures,standards,guidelinesinSLCCScomparablewithinternationalbestpractices

❑  Identifysectorsthatshowthegreatestpotentialfordevelopmentofdomesticcarbonoffsetsmarket(e.g.energyef7iciencyinindustryandmanufacturing,wasteheatrecovery,renewableenergy)


2.2CoreReadinessComponents(2)–InsHtuHonal/regulatoryCapacityBuilding(1/2)

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◆  Institutionalcapacitybuildingwouldberequiredacrossstakeholdersforcreatingeffectivedomesticcarbonmarkets

Institution FunctionClimateChangeSecretariat(CCS),focalpoint

EstablishedundertheMinistryofEnvironmentandRenewableEnergy(MoERE),toadoptacomprehensivenationalapproachtoaddressclimatechangechallenges.

CeylonElectricityBoard(CEB)

Anintegratedstateownedutilitythatownsandoperates65%oftheelectricitygenerationsystemandtheentiretransmissionnetwork.

PublicUtilitiesCommissionofSriLanka(PUCSL)

Establishedin2002toregulateenergyandwatersectors.

SustainableEnergyAuthority(SEA)

Establishedin2007todevelopandimplementpolicyforrenewableenergydevelopment,energyef7iciency,andenergyconservation.

SriLankaClimateFund(SLCF),technicalpartner(todevelop&implementMRP)

Establishedin2008underthepurviewMoERE,toundertakeclimate7inanceassignmentsthatalignwithnationalpriorities;andtodevelopnationalMRVsystem.

Other Relevantgovernmentinstitutionsandotherstakeholders


2.2CoreReadinessComponents(2)–InsHtuHonal/regulatoryCapacityBuilding(2/2)

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◆  Capacitytodevelopnecessaryregulationsandpoliciesthatsupportdevelopment,implementandenforcementofmarketinstrumentsisneeded.

◆  MinistryofPower&RenewableEnergy◆  MinistryofMahaweliDevelopment&Environment◆  MinistryofIndustries◆  MinistryofFinance◆  Otherrelevantgovernmentinstitutionsandstakeholders


2.2CoreReadinessComponents(3)–SriLankaCarbonCrediHngScheme(1/2)

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Source:SriLankaClimateFund,2015

◆  TheschemecouldsupportgeneratingSCERsforachievingSriLanka’scarbonneutralitygoals

◆  Italsoincentivizesprojectsforblue-greendevelopmentunderSriLankaNext

◆  ExpansionofcarbonfootprintregistrycanaccelerategreengrowthandfacilitatetheachievementofINDCs

◆  TheschemealsocouldgenerateinternationallytradableSCERs.

SLCCSEB1)Dr.Senaweera2)Mr.Maliyadda3)Prof.Attalage4)Mr.KeerthiWickramaratne5)Prof.Sumathipala

Validation/VeriNication[SLCFValidation&Veri7icationdivision]

CarbonManagementAssessment/MonitoringReport[Client/Consultant]


2.2CoreReadinessComponents(2)–SriLankaCarboncrediHngScheme(2/2)

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◆  SLCCSrequiresfurtherstrengtheningthrough:

❑  ResearchonmitigationpotentialinSriLankatotargetsectorswiththegreatestpotential

❑  Development&designofappropriatemarket-basedinstrumentsthatsupportsthescheme

❑  Improveitsstandards,procedures,andguidelinescomparablewithpractices

❑  Improvingdatamanagementtobuildanationalregistry

❑  Helpidentifymeasurestoimprovetradabilityofcarbonoffsetstoimproveuptakeofthescheme

3.OrganizaHonandconsultaHons(1/3)

3.1PMRcontactpoint

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◆  TheClimateChangeSecretariatundertheMinistryofMahaweliDevelopment&EnvironmentisresponsibleforcoordinationofSriLanka’sclimatechangeactivitiesandwillleadPMRefforts

◆  Focalpoint:DrDissabandaraSunimalJayathunga,Director,ClimateChange&SustainableDevelopment

◆  Technicalpartner:H.M.BuddikaHemashantha,CEO,SriLankaClimateFund


3.2ConsultaHonprocess

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◆  ConsultationswithrelevantpublicandprivatestakeholderswillbeconductedthroughouttheMRPpreparationphase

◆  ThetimelineforstakeholderconsultationswillbedeterminedbyClimateChangeSecretariat,MinistryofMahaweliDevelopment&Environment


3.3PartnersintheformulaHonandimplementaHonofthecountry’sMarket ReadinessProposal(MRP)

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ConstitutionofInter-MinisterialWorkingGroup(IMWG)coordinatedbyClimateChangeSecretariat

ProposedcompositionofIMWG•  MinistryofMaheweliDevelopmentandEnvironment•  MinistryofPowerandEnergy•  MinistryofFinance•  MinistryofIndustries

ActivitiestobeundertakenbyIMWG

•  Determinetheroleofmarket-basedinstrumentsonclimatechangepolicy•  Sectoralanalysisoftheviabilityofmarket-basedinstruments•  National/sectoralMRV•  Selectionofmarket-basedinstrumentsaccordingtosectoralneeds/preferences•  Supportdevelopmentofappropriatepoliciesandregulatoryenvironmentforintroductionofmarketbasedinstruments

•  SupportdevelopmentofSriLankaCreditingScheme

4.OrganizaHonofworkandesHmatedHmeline

4.1OverviewoftasksandesHmatedHmelineforformulaHonofMarketReadinessProposal

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Activities May Jun Jul Aug Sep OctPreparationanddevelopmentofdraftMRP

Stakeholderconsultation

ReviewofMRPbasedonfeedback

FinalizingMRP

TheproposedtimelineforpreparationoftheMarketReadinessProposal(MRP)is6months.Thetimelineforactivitiestobecarriedoutarepresentedbelow

SriLanka'svisiontointroducemarketinstruments

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Step1Researchgreenpolicyinstrumentstosupportgovernmentinachievinglowcarbondevelopmentpath(e.g.green

tax,levy)

AssessSriLanka’smitigationpotentialbysector

Step2 Developpotentialpolicymechanismsforgovernment

Identifypotentialsectorsandmatchwithmarketinstruments

Step3 Testgreenpolicyinstruments(e.g.greenbonds,SLCCS)

Implement/pilotmarketinstrumentsinidenti7iedsector

(e.g.scaledupcreditingmechanismfortransport,building)

Throughcontinuouscapacitybuildingwithdomesticinstitutions

5.Conclusions–SummaryofmarketreadinesspriorityareasforPMRsupport

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1.  NationalMRVSystems❑  Improvedatamanagementandvalidationprocesses❑  Buildinstitutionalcapacitytodevelopdomesticcarbonmarketsandeffectivelyengageininternationalmarkets

❑  Buildawarenessandcapacitybuildingofstakeholderstoenhancethecon7idenceonmarketinstruments

❑  Identifysectorsthatshowthegreatestpotentialforcarbonoffsets(e.g.energyef7iciencyinindustryandmanufacturing,wasteheatrecovery,renewableenergy)

2.  InstitutionalandregulatoryCapacityBuildingfor:❑  Facilitatingprivateinvestmentingreengrowth❑  Creatinganenablingenvironmentandinstitutionalframework❑  Developingdomesticcarbonmarkets

3.  SriLankaCarbonCreditingScheme(SLCCS)❑  ResearchonmitigationpotentialinSriLankatotargetsectorswiththegreatestpotential

❑  Development&designofmarket-basedinstrumentsthatsupportsthescheme❑  Improvingdatamanagementtobuildanationalregistry❑  Helpidentifymeasurestoimprovetradabilityofcarbonoffsetstoimproveuptakeofthescheme

Thankyou!

H.M.BuddikaHemashanthaCEO,SriLankaClimateFund,[email protected]

Source:longtermgenerationexpansionplan2015-2034

Energysectortarget

ShareofNCREinElectricityMix

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Increaseshareofnon-convenHonalrenewableenergy(NCRE)electricitygeneraHonto20%by202012%

20%

0%

5%

10%

15%

20%

25%

2015 2020

Source:SriLankaEnergySectorDevelopmentPlanforaKnowledge-basedEconomy2015-2025




Forestsectortarget

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30%32%

20%

30%

40%

2015 2020

Forestrycover

Increaseforestrycoverfrom29.6%to32%


Wastesectortarget

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39%

65%

0%

18%

35%

53%

70%

2014 2030

Wastecollectionrate

IncreasewastecollecHonrateto50-65%by2030Promoterecycling,

composHng,andwastetoenergyacHons

long-termgoalofdisposing50%ofMSWbycomposHng


Transportsectortarget

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0%

40%

0%

10%

20%

30%

40%

50%

2014 2030

Shareofgreenfuelledpublictransport

Establishenergyef7icientandenvironmentallysustainabletransportsystemsby2030with25%-40%greenfuelledpublictransport


Industrialsectortarget

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Sectoremissionswillbereducedthroughmodernizationandfacilitationtofollowrecognizedstandards,breaksintosubsectors



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◆  Atpresent,SriLanka’sMRVsystemsnotwelldeveloped:

❑  Underdevelopedcarbonmarkets(alsodemandissue)

❑  Limitedinstitutionalcapacity

❑  LowawarenessofSLCCSprocesses

Documents

Sri Lanka’s Organizing Framework for Scoping of PMR ac9vies Lanka... · Sri Lanka is currently exploring the possibility of market instruments in the energy sector through scaled-up