Climate -Compatible Development Plan for the Dominican Republic
Presentation by Federica BiettaDeputy DirectorCoalition for Rainforest Nations
Workshop
“Developing Knowledge on Building Blocks of the Global Mitigation Architecture”
Bonn, June 11, 2011
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▪ The Dominican Republic resolved to develop a Climate Compatible Development Plan (CCDP) in 2010, to progress towards the goal of sustainable development already manifested in the DR's National Development Strategy 2010-2030
▪ Thanks to support by the BMU through ICI, the Dominican Republic received assistance from the Coalition for Rainforest Nations in the form of policy advice and analytical support
▪ A joint DR-CfRN team has been working since COP 16 in Cancún , involving stakeholders from Dominican government, civil society, and the private sector
▪ President Fernández will present the draft CCDP in the second half of 2011
Context
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Climate-compatible development (CCDP) plans integra te economic development, climate change mitigation, an d adaptation
Scope of phase 1
Development
Climate-compatible
development
AdaptationMitigation
CCDPs allow developing countries to join the global mitigation effort by identifying the mitigation opportunities that stimulate development
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The Draft CCDP is structured along 7 components tha t were developed sequentially - from a baseline assessment to draft s ector action plans
Abatement potential and develop cost curve
� Determination of total economic abatement potential � Development of abatement cost curve showing abatement levers
from all sectors with their abatement potential and cost
3
Prioritize sectors and levers
▪ Prioritization of sectors and levers based on development impact, abatement potential and cost, as well as ease of implementation
4
Needs for financing and institutional change
▪ Assessment of required capex and financing conditions▪ Assessment of institutional changes required for implementation
6
Economic development goals and baseline
▪ Determination of economic growth indicators until 2030 and priorities of DR's development strategy
1
▪ Drafting of Action Plans outlining how the abatement potential will be captured in priority sectors Power, Transport, Forestry, and Quick Wins
Draft Action Plans of key sectors
7
Economic impact of abatement levers in key sectors
5 ▪ Estimation of the CCDP's economic impact in cooperation with the Economic Ministry, focusing on job creation, disposable income, FDI inflow, and trade balance improvements
GHG emissions baseline (BAU)
▪ Determination of GHG emissions from all sectors until 2030, based on economic growth indicators and detailed sector data
2
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Our approach to developing a CCDP is based on 6 wor king principles
Country relevance and ownership
Trust-based procedures and confidentiality
Co-creation and capability building
2
3
1
DEVELOPING A CCDP
Frequent interactions
Close coordination & syndication
Economic development mindset
4
5
6
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Next steps in the development of the Dominican CCDP
Integrate feedback from 3rd Steering Committee meeting
Reflect and integrate feedback from 3rd Steering Committee into sectoral action plans as well as institutional set-up of CCDP implementation
Write Draft CCDPConsolidate and integrate all findings to date as well as sectoral action plans into an overarching CCDP for the DR
Complete sectoral Action Plans
Make progress on Sector Action Plans until the presentation of the Draft CCDP by the President: ▪ Define the measures of each Action Plan concretely ▪ Complete policy review and identify legislative changes▪ Refine and concretize implementation strategy ▪ Determine required investment and available finance▪ Analyze impact on economic and social development▪ Engage with stakeholders▪ Concretize roadmap for implementation
Stakeholder outreach
Engage a widening breadth and depth of stakeholders as the CCDP becomes ever more concrete
High-level check-up after 6 months
Meeting of the Steering Committee in November/Decem ber 2011 to discuss implementation and first results of the CCDP
Presentation of the Draft CCDP
Presentation of the Draft CCDP in the presence of P resident Fernández in second half of 2011
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GDP per capita 1 growth aspirationsUSD thousands
SOURCE: National Development Strategy 2010 – 2030; Harvard CID preliminary development plan for the DR; team analysis
1 GDP/population2 Aspiration stated in the National Development Strategy by the Ministry of Economics and Planning3 2030 Development strategy for the DR by the Center of International Development at Harvard University (Prof. Hausmann)4 Derived from GDP per capita growth aspirations and DR Central Bank population forecasts
4.5% p.a.
5.2
2010
12.5
2030E22020E2
7.8 +140%
Over the next two decades, the DR aspires to grow i ts GDP per capita by 140%
ECONOMIC DEVELOPMENT GOALS AND BASELINE
Enablers of economic development plan 3
GDP4, USD m
9.9 11.1 12.0Pop., m
52 86 150
▪ Competitiveness
▪ Productivity improvements
▪ Capacity Building
▪ Reduction of unemployment
1
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With business-as-usual, economic development aspira tions will increase current GHG emissions of 36 MtCO2e by ~ 40% to ~ 50 MtCO2e by 2030
BAU assumptions
▪ GDP growth of 5% p.a.
▪ Population growth falling continuously from 1.4% in 2010 to 0.9% in 2030
▪ Sector-specific assumptions in line with economic development under BAU
▪ Changes to sector fundamentals only included when they:
– Are certain to occur (e.g. power plants already under construction)
– Have stand-alone economic rationale (e.g. subsidized renewables projects excluded)
51
42
36
+2% p.a.
+40%
203020202010
Historical BAU reference case 1
SOURCE: Model analysis based on local data, proxies from comparable countries, global data and proxies; Technical Working Groups
MtCO2e
1 “BAU” reference scenario is a basis for assessment of mitigation levers and carbon finance negotiations. It is not the most likely scenario, but a theoretical case assuming a country acts in its economic self-interest and does not include additional action for avoiding GHG emissions (e.g. renewables only added if cost competitive with fossils)
GHG EMISSIONS BASELINE (BAU)2
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Average cost of abatement/ton: ~ USD -40Share of abatement coming at negative cost: ~ 60%
Efficiency code for new commercial buildings
Energy efficiency in other industriesMore efficient light-duty vehicles
Switch incandescent light bulbs to LEDsMore efficient residential electronics
Replace fuel oil plants with natural gasMore efficient residential appliances
Domestic bioethanol from sugarcane
Reduce off-grid generationClinker substitution by fly ash et al
Fuel substitution by bio wasteHydro power
Wind powerImport bioethanol to reach E50
Capture landfill gas for direct useEfficiency code for new residential buildings
Solar PVRecycling new waste
Increase share of vehicles running on CNGDomestic biodiesel from Jatropha
Importing biodiesel to reach B68
Rice management shallow flooding
Avoided deforestation from illegal infrastructure developForest fire prevention and reduction
Avoided deforestation from illegal charcoal loggingPastureland afforestation
Degraded forest reforestation
Power from organic wasteusing anaerobic digestion
Power from biomass
Capture landfill gasfor power generation
Waste incineration for power generation
Bus rapid transit (BRTs)
More Metro lines
5
-200
-250
-300
-350
Abatement potentialMtCO2e
34
0
150
1,600
15
100
2510
300
50
-50
200
20
-100
-150
CostUSD/tCO2e
250
30
Transport
Quick wins
Power & energy efficiency Forestry
Other
~ 85% of the DR’s abatement potential lies in 3 sec tors and quick wins, with ~ 60% of potential achievable at net financial benefits to the DR
SOURCE: Analysis by the Consejo Nacional para el Cambio Climático y el Mecanismo de Desarrollo Limpio
ABATEMENT POTENTIAL AND COST CURVE3
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Power, transport and forestry were identified as th e priority sectors of the CCDP
Starting point: top-down Assessment of 1st SteerCo
Criteria for prioritization
Key sectors of the CCDP
▪ Power
▪ Transport
▪ Forestry
PRIORITIZE SECTORS AND LEVERS4
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~ 50.000 ~ 1.500 ~ 400 - 9 million barrels
~ 30.000 ~ 1.500 ~ 300 - 9 million barrels
~ 15.000 ~ 20 ~ 50 X
~ 24.000 ~120 ~ 50 - 1 million barrels
CCDP for priority sectors with potential to create > 100,000 jobs and free up household budgets by more than USD 3 bn in 2030
Priority levers
Employment, # new permanent jobs
Disposable income, extra annual USDm
FDI1 inflows,USDm, annual Ø
Trade balance im-provement, mBOE
Economic indicators
2030, stand-alone project based assessment, primary effects only
Prio
rity
Sec
tors
Pow
er
▪ Increased energy efficiency▪ Renewables▪ Reduced auto generation▪ Early oil to gas shifts
Tra
nspo
rt ▪ Fuel efficiency gains▪ Shifts to Gas (LPG/CNG)▪ Biofuels▪ Public transportation
For
estr
y ▪ A/R programs▪ Reduced deforestation▪ Reduced forest fires
Qui
ck w
ins
▪ Agriculture▪ Waste▪ Cement
Suma:~ 120.000 jobs
+ temp jobs (tbc)
~ 3 billion USD or
~ 260 USD p.p~ 800 MUSD
~ -20 million barrels or 2-3
BUSD
(1) Foreign Direct Investment
ECONOMIC IMPACT5
SOURCE: Ministry of Economy, Planning, and Development; Team analysis
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The DR needs to have 5 central success factors in p lace to achieve a high-impact, transformative CCDP
BASED ON INTERNATIONAL EXPERIENCE
BEffective institutions and systems
CComprehensive capabilities
A
DSmart financing
EStakeholder mobilization
High-level commitment and leadership
FINANCING AND INSTITUTIONAL CHANGE6
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Leadership : Enrique Ramírez, CNECelso Marranzini, CDEEE
Leadership: Diandino Peña, OPRET
Active co-creation: Milciades Péres, FONDETLeonel Carasco, OPRETFrancisco Gómez, CNE
Leadership:Omar Ramirez, CNCCyDL
Active co-creation: Roberto Herrera, RENAEPAJulio Llibre, ASONAHORESYulissa Baez, ADOCEM
Leadership:Jaime David FernándezMirabal, MMA
Leadership of Economic Integration :
Temístocles Montás, MEPyD
10 Core elements of sectoral action plans1) Formulate CCDP aspiration2) Prioritize major programs and
initiatives3) Define implementation road maps4) Learn from international
experience and policy options5) Outline pilots to test impact and
feasibility6) Build underlying institutional
capabilities7) Overcome hurdles and risks8) Identify required policies and
policy changes9) Indentify required financing and
financing options10) Plan stakeholder outreach and
management
ENERGY SECTOR TRANSPORT SECTOR
QUICK-WINSFORESTRY SECTOR
Focus of discussion during 3rd meeting of Steering Committee
SECTOR ACTION PLANS7
Moving the strategy forward, government agencies of the priority sectors have developed concrete action plans around selecte d measures