Capacity Development for CDM - RW4 / 27-29 August 2004 1
Capacity Development for CDM
The UNEP CDM Sustainable Development Impacts
Guidebook
Tunis, 27-29 August 2004
Samir Amous, APEX, TunisiaSamir Amous, APEX, TunisiaRegional Centre for North Africa and Middle-EastRegional Centre for North Africa and Middle-East
Capacity Development for CDM - RW4 / 27-29 August 2004 2
Published by URC in June 2004 Authors: 4 experts from URCAlmost 90 pages
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8 Chapters
1.Introduction and outline
2.Article 12 KP addressing SD
3.Steps for SD assessments in CDM projects
4.SD in relation to CDM
5.Selecting SD Criteria for CDM projects
6.Selecting SD indicators for CDM projects
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8 Chapters
7.Decision-making tools for SD evaluation
8.CDM and SD: case studies
Annex: the South-South-North criteria and indicators Appraisal matrices
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1. Introduction and outline
SD: a main driver for Non-Annex I partie participation to the CDM
Stress on the difficulties to assess SD contribution of CDM projects
The guidebook is meant to give a general introduction to policy makers and project developers how CDM projects can be developed in a way where they assist in achievement SD goals
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2. Article 12 of KP and the link to SD
Explicit purpose of the CDM contribute to SD of host countries
The SD perspectives of the CDM – examples of areas where CDM can contribute to SD:
• Increased Energy Efficiency
• Sustainable energy production
• Transfer of Technologies and Financial Resources
• Local env. benefits
• Poverty alleviation
• Private and public sectgor capacity development
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3. Six major steps of a SD assessment
1. Overview of Policy priorities reflecting the development context
2. Selecting SD Criteria based on national SD priorities
3. Initial screening of potential CDM projects
4. Outline of procedures for assessing SD impacts
5. General decision-making procedures
6. Evaluation performance of implemented CDM projects
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3. Six major steps of a SD assessment
4. Outline of procedures for assessing SD impacts:
Identification and selection of SD indicators
Designate an approach for assessing the indicators
Format of Reporting: measurment standards and aggregation rules
5. General decision-making procedures: stakeholder dialogue, detailed SD assessment
6. Evaluation performance of implemented CDM projects
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4. SD in relation to CDM
CDM and the SD perspective: Environment is the core issue, but also Development priorities of host countries
Some examples of SD criteria Social (improve quality of life, alleviate poverty, improve equity
Economic: financial returns to local entities, positive impacts on balance of payments, transfer of nezw technologies
Environment: reduce GHG, conserve local resources, reduce pressure on local env., etc.
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4. SD in relation to CDM
SD criteria for CDM are largely overlapping with national Dev. CriteriaLarge potential synergies
Operationalizing SD at the project level: if a project contribute to SD at its level, it will have a positive impact on SD at national level (although marginal):
SD criteria should be meaningful from a project level perspectiveappropriate indicators
The overall SD impacts should be positive
The negative/irreversible side-effects should be taken into account
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4. SD in relation to CDM
Aggregate SD impacts: how to interpret the resultsnegative VS positive impacts
How to address the trade-offs
Compensation of the negative impacts
In absence of reliable calculationonly limited impacts are acceptable (above safe minimum level)
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5. Select SD criteria
Link CDM projects to national SD criteria:Screening the Millenium Development Goals: formalized targets:
E.g. Halve the proportion of people whose income is less than US$ 1 between 1990-2015goals and indicators
E.g. achieve significant improvement in the lives of at least 100 millions slum dwellers in Indiacommission 14 GW hydro
In general: linkage between MDG and Energymeet national power demandhow can CDM support rural electrification
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Desirable properties of SD indicators
Complete: all dimensions are reflected through the set of indicators
Operational
Decomposable
Non redundant
Minimal
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Some examples of SD indicators
Employment: nbr man-years generated
Growth : Net Surplus achieved
Exhaustible resources: physical units
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Some examples of applying SD
Hypothetical illustration (e.g. biogas in rural area)
Only qualitative assessment
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Conclusion regarding indicators
Indicators are necessary for any assessment procedure
There are many qualitative and quantitative indicators available in the litterature that we need to define for assessing CDM projects
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7. Decision making tools for SD evaluation
A number of Tools are available: Cost-benefit analysis, Multicriteria analysis, Ranking methodologies
Can be carried out in a simple or more complex way
Key advantage and disadvantages of each approach
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7. Decision making tools for SD evaluation
Cost-effectiveness analysis: cost of the mitigation against potential reductions
• Simple, but
• Difficulties in predicting the future
• Care is needed when defining the relevant cost: financial VS economic costs, etc.
Cost-benefit analysis: all costs of the project (either negative or positive):
• Time cost, lack of transparencymore relevant for CDM programmes
• Readily appliable for larger CDM projects
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7. Decision making tools for SD evaluation
Multicriteria analysis: weighting the different criteria, combine scores and obtain an overall value, examine the result, conduct sensitivity analysis:
• Widely used• Attractive approach
Ranking methodologies: simple checklist approach (identification of indicators, notations: negative, neutral, positive, weights), best practice (project against the baseline, -1 to +1), Analytical Hierarchy Processclose to multicriteria Analysisscoring and weighting tool for non quantifiable attributes
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8. Case studies
South-South-North initiative: the Checklist approach (details in annex A). Indicators:
-2 to +2: -2: Major negative impacts (ecological, social,
economic, etc. -1: very minor negative impacts
Applications:South Africa (biomass)Brazil (Biodiesel)
Too many criteria, high level of subjectivity associated with using scores to qualitatives cirteria
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8. Case studies
Multicriteria analysis:Egypt (better guidance to apply indicators, but varying number of indicators in each type of criteria, a sensitivity analysis is required)
Cost-effectiveness Approach Applications (dependent of the discount rate, carbon benefits are rarely crucial to justify the project, etc.) :
Egypt PhilippinesUganda