Oct.

5, 2011

CARBON FINANCING: NEW BUSINESS OPPORTUNITIES

Session 2 :

Kyoto to Copenhagen to Cancun - International & Indias Response International Response Indias Response

Course Instructor: Er. Ashwani Kumar,

Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

International Response

Session outline

Development of International framework UNEP,UNFCC, IPCC , , Various International debates and negotiations Introduction to Kyoto Protocol and CDM mechanism Cancun Agreement

Indias Responses
Pre-Kyoto P K Responses to Kyoto Protocol Position in Copenhagen meet Post Copenhagen position India at Cancun
Course Instructor: Er. Ashwani Kumar,
Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Climate Change : Historical Brief of Evolution of Framework

Climate Change Mitigation Agenda: Historical Brief of Evolution

The Kyoto Protocol entered into force on 16 February 2005. 169 countries have ratified the Kyoto Protocol to date.

Recent Agendas
COP 13, United Nations Climate Conference (Dec. 2007, Bali Indonesia) Non-ratification by US Late ratification by Australia (December2007) Non-binding Non binding emission targets on Major current GHG emitters China and India Bali,IndonesiainDecember2007. Comprehensive process for full, effective and sustained implementation of convention upto and beyond 2012. Bali Action Plan No binding commitments, provides for a new international collective agreement to be in place by the end of 2009 and for the explicit Participation of countries that have not accepted binding p p p g emission targets under Kyoto, including US. UNFCCC confirmed that the use of market-based mechanisms such as the market for carbon credits would be continued and improved. Dec 13, 2008: Poznan (CMP) - legal , independent status to Adaptation fund Board given; source of funding of this fund could not be agreed upon (levy on ET, JI ?) COP 15 C 15, Copenhagen (D 2009) h (Dec, COP 16, Cancun (Dec, 2010)

Why and What is Kyoto Protocol?

Costofcurbingemissionsvariesfromregiontoregionasaresultofdifferencesin C f bi i i i f i i l f diff i forexample,energysources,energyefficiencyandwastemanagement. Economicsensetocutemissions,orincreaseremovals,whereitischeapesttodo so,giventhattheimpactontheatmosphereisthesame. so given that the impact on the atmosphere is the same Objective: Tomaximizethecosteffectivenessofclimatechangemitigationby allowingPartiestopursueopportunitiestocutemissions,orenhancecarbon sinks,morecheaplyabroadthanathome. , py Preventittobecome
a)theRighttoemit b)Tradeoffictiouscredits byputtinginplacethemechanismofenvironmentalintegrityandequity.

Protocolsemissionstargetscoverthesixmaingreenhousegases(GHG):
Carbondioxide(CO2); Methane(CH4); M th (CH4) Nitrousoxide(N2O); Hydrofluorocarbons(HFCs); Perfluorocarbons(PFCs);and Sulphurhexafluoride(SF6)

EachoneofthemhasdifferentGlobalWarmingPotential (GWP)Exmethanehas 21timeofCO2,whileSF6has22,000timethatofCO2

Why and What is Kyoto Protocol?

Innovative mechanisms for meeting GHG emissions target in first commitment period 2008-2012 are referred as Market Based Mechanisms. Joint Implementation Clean D l Cl Development M h i t Mechanism Emission Trading Operate on accounting units (three type) National Registry by Annex - I parties: p g ( yp ) g y y p Emission Reduction Units (ERUs) Certified Emission Reduction (CERs) Assigned Amount Units (AAU ) A i dA t U it (AAUs) Removal Units (RMUs) These units are all equal to one metric tonne of carbon dioxide equivalent (calculated using GWPs), and will all have their own unique serial number.

Course Instructor: Er. Ashwani Kumar,

Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Group of Countries Two main groups

Annex - I: 41 Industrialized including the relatively wealthy counties (OECD) in 1992 EITs Economies in Transition (including Russian Federation, Baltic States Central and Eastern Europe Annex - II: 24 countries; OECD member of Annex I, excludes the EITs Non Annex - I: 145 countries; all other not in Annex I

Emergence of Negotiating Blocks

Annex I Countries Island Nations African Countries Group LDCs EITs Group of Eight (G-8) p g ( ) Group of Twenties (G-120) Major Economies: 16 members including India (MEM) j g ( ) G-77 BASIC (Brazil, Africa, India and China)
Course Instructor: Er. Ashwani Kumar,
Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Stage Making for Copenhagen

Early 2009: Identified likely key deliverables at Copenhagen
Agreement ambitious mid-term emission reductions by developed countries Clarity on mitigation actions by major developing countries Short- and long-term finance, and Governance structures. (UNFCCC Executive Secretary ,Yvo de Boer) ( y )

Two bodies were established

Ad HocWorking Group on Long-term Cooperative Action under the UNFCCC (AWG-LCA) Ad HocWorking Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP) ( )

Course Instructor: Er. Ashwani Kumar,

Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

AWG - LCA: A long text (UNFCCC), reflecting various proposals by all UNFCCC parties with areas of disagreement indicated therein. AWG-KP: Annex I parties (to commit to ambitious emission reduction targets in line with science and developed g p countries) stressing that making progress on numbers and providing a meaningful response to climate change requires negotiations that also involve the US and major d l h l l h d developing countries
Course Instructor: Er. Ashwani Kumar,
Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Year 2009
International Politics warms up Rumor of US and China i f R f d Chi informal meeting l i Sept, 2009: In UN Climate Summit more than 100 p p political heads shown their commitment for achieving the meaning full outcome at Copenhagen Reach a legally-binding outcome Finances to address climate change in developing countries A process towards a legally-binding agreement in 2010. p g y g g
Course Instructor: Er. Ashwani Kumar,
Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Copenhagen: Cloudy starts to Silver lining

Danish Text Episode lead to several coalitions working out their counter text High-level segment (16 December, the Danish COP Presidency) announced its intention to table two texts, based substantially on the two , y texts forwarded by the AWGs. The proposal turned down (specially by developing countries) argument of lack of transparency and democracy, are not adequately familiar with t e p ocess, u e sta the process, understanding of complex issues and agreed that only texts g o co p e ssues a ag ee t at o y te ts developed by the AWG-KP and AWG-LCA would be used as a basis for further negotiations.
Course Instructor: Er. Ashwani Kumar,
Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

In Copenhagen..
Transparency was questioned as majority of observers and civil society representatives could not accredited during whole COP and a very limited number of civil society delegates had access to Bella Centre y g Developed countries, most developing countries, as well as spokespersons for AOSIS LDCs and the African Group, recognized that AOSIS, Group the negotiating process had been legitimate and urged COP 15 to adopt the Copenhagen Accord. Informal consultations (UN Secretary-General Ban Ki-moon) next morning, COP 15 agreed to take note of the Copenhagen Accord. COP 15 Establish a procedure to register their support for the Accord ( (and submit their targets by 31 J g y January 2010). y ).
Course Instructor: Er. Ashwani Kumar,
Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Copenhagen : What it delivered ?

Positiveoutcome Positive outcome 2Ctarget(inplaceofemissionreduction5%byAnnex IinKyoto) Theaccordalsoestablishesfournewbodies
AmechanismonREDDplusforreducingdeforestationandforestdegradationin developingcountriesplusconservation(REDD plus) developing countries plus conservation (REDDplus) AHighLevelPanelundertheCOPtostudytheimplementationoffinancing provisions CopenhagenGreenClimateFund p g TechnologyMechanism.

Unsettled:
Countriespositionsonfinanceandmitigation Legalstructureofthemitigationframework ContinuationoftheKyotoProtocolbeyond2012 y y
Course Instructor: Er. Ashwani Kumar,
Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Cancun Agreement
BroughtthemainCopenhagenoutcomesformallyundertheUNFCCCandinsomecases gonebeyondtheCopenhagenAccord Confidenceoninternationalclimatechangecooperation RestoringfaithintheUNFCCCprocess(ghostsofCopenhagen)wasthemostimportant achievement TheaclearsignalregardingthecontinuationoftheKyotoProtocol,preferablyinthe formofadoptionofasecondcommitmentperioddidnothappen NotimeframefortheAWGKPoutcometext Afinelinedrawnbetweendevelopingcountriessupportingasecondcommitment periodandthose,suchasJapanandtheRussianFederation,whohadcomeout againstit. AnnexIpartiesemissionreductioncommitmentsforasecondcommitmentperiod werenotestablishedandAWGKPhastakennoteofdevelopedcountriesvoluntary quantifiedemissionreductionpledges. Thesetwoprovisionsappeartoprovidefurtherreassurancetothesepartiesthatthe Protocolisnot dead. Protocol is not dead ThelegalformoftheoutcometobeadoptedbyCOP17inDurbanwhichisopenfor discussion,legaloptions,anditsform(COPdecisionoranewprotocol).

Cancun Agreement
Inmanyareas,importantprogresshasbeenmadeonsubstance. Balancereachedwithcreationofaprocessforanchoringmitigationpledgesby developedanddevelopingcountries,combinedwithtechnicalworktobetter understandthem. EstablishmentofaregistryforNationallyAppropriateMitigationActions(NAMAs)by developingcountries EnhancedproceduresonMRV. Enhanced procedures on MRV MajoroutcomeisestablishmentoftheGreenClimateFund,addressesfaststartand longtermfinance,andcreatesaStandingCommitteeundertheCOPtoassistparties. AlongawaiteddecisiononREDD+,signalling thepositiveincentivecommitemnet of theinternationalcommunity(resultsbasedREDD+). AgreementwasalsoreachedonanewTechnologyMechanism,encompassinga g gy , p g TechnologyExecutiveCommitteeaswellasaClimateTechnologyCentreandNetwork. TheCancunAdaptationFramework,aimedatenhancingactionsonadaptation includingthroughinternationalcooperation g g p TheAWGLCAsmandatewasalsoextendedbyayeartocarryouttheundertakings includedinthepackage.

Cancun Cancun Agreement

Positiveoutcomesinclude EstablishmentoftheGreenClimateFund,theTechnologyMechanismandthe CancunAdaptationFramework. ManyarealsosatisfiedwiththewelcomesignalregardingREDD+. M l i fi d i h h l i l di REDD Inabsenceofthe2nd commitmentperiod(undertheKyotoProtocol),the CancunAgreementsbroughtindustrializedcountries mitigation targets and Cancun Agreements brought industrialized countriesmitigationtargetsand developingcountriesmitigationsactionformallyundertheUNFCCCprocess. Theagreementsrepresentonlysmallstepsinreducingglobalemissionsthat contributetoseriousclimatechange. TheroadmapforasuccessfuloutcomeinDurban,SouthAfricain2011isyet notclear. t l

INDIAs RESPONSE TO CLIMATE CHANGE

Framework Development National Action Plan on Climate Change Sectoral Status
Mitigation Front:
Promotional Policies for Energy Efficiency and Renewable Energy

Adaptation Front Building Institutions Post Copenhagen Position India at Cancun

Course Instructor: Er. Ashwani Kumar,
Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

I N D I A S R E S P O N S E TO C L I M AT E C H A N G E

INDIAS RESPONSE TO CLIMATE CHANGE

June 10, 1992: INDIA SIGNED The United Nations Framework Convention On Climate Change (UNFCCC) November 1, 1993: RATIFIED UNFCCC August 26, 2002: RATIFIED the KYOTO PROTOCOL O O O OCO October 2002 : HOSTED the eighth Conference of Parties (CoP) to the UNFCCC in Delhi 2002: Released 1st National communication (NATCOM) on sources of greenhouse gas emissions. Upto 2007-08: High number of the CLEAN DEVELOPMENT MECHANISM (CDM) projects approved for India i.e more than 440 (35%) out of total 1200 registered worlwide. 2008: National Action Plan on Climate Change (30th June, 2008) Post Copenhegan: Willingness to reduce the Carbon Intensity of Economy (GDP) by 20-25 % by 2020 compared with 2005 levels Today: Indias Energy future is unclear. No climate change target.

N AT I O N A L P O L I C I E S
India has for quite some time pursued GHG friendly policies in her own interest. The National Environment Policy, 2006 - integration of env considerations in the policies

POLICIES TO PROMOTE ENERGY EFFICIENCY AND RENEWABLE ENERGY:

The Policy Statement for Abatement of Pollution, 1992 y , Electricity from Renewables: The Electricity Act, 2003 Enhancing Efficiency of Power Plants Introduction of Labelling Programme for Appliances Energy Audits of Large Industrial Consumers gy g Accelerated Introduction of Clean Energy Technologies through the CDM The National Environment Policy, 2006, Energy Conservation Building Code (ECBC), May 27, 2007

National Action Plan for Climate Change , NAPCC (2008)

EIGHT NATIONAL MISSIONS1. National Solar Mission 2. National Mission For Enhanced Energy Efficiency gy y 3. National Mission On Sustainable Habitat 4. National Water Mission 5. National Mission For Sustaining The Himalayan Ecosystem 6. National Mission For a Green India 7. National Mission For Sustainable Agriculture 8. National Mission On Strategic Knowledge For Climate Change

Indias Energy Scenario

Percapitaenergyconsumptionin P i i i Indiaislessthan500kgoe, comparedtotheglobalaverageof nearly1,800kgoe Since2004,theIndianeconomyhas Since 2004 the Indian economy has grownatarateofover9%peryear, supportedbyanenergygrowthrate oflessthan4%peryear of less than 4% per year
We are determined that Indias per-capita GHG emissions not going to exceed those of developed countries even while pursuing policies of development and economic growth.
-PM (Manmohan Singh, Heiligendamm, 8th June 2007)

Course Instructor: Er. Ashwani Kumar,

Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Mitigation ?
Food preferences and high recycling p g y g rates have mitigated growth in energy demand, and in CO2 emissions In almost every industrial sector, some of the worlds most energy efficient units are located in India
Trends in specific energy consumption in the Indian iron & steel sector

Recycling Ratio

Course Instructor: Er. Ashwani Kumar,

Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Adaptation Front ?
Indiaisespeciallyvulnerabletotheadverseimpactsofclimate, India is especially vulnerable to the adverse impacts of climate andover2%ofGDPiscurrentlyspentonmeasurestoadaptto theseimpacts:
CropImprovement DroughtProofing Health:SurveillanceandcontrolofvectorbornediseasessuchasMalaria, Kalaazar,JapaneseEncephalitis,FilariaandDengue. RiskFinancing DisasterManagement LivelihoodPreservation

Course Instructor: Er. Ashwani Kumar,

Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Adaptation Front ?
DisasterManagement ResponsetoExtremeweatherevents
Betterhealthcareservices, Infrastructuredesign, Infrastructure design communicationnetworks, protectionofcoastalareas, capacitybuildingatregional/Statelevel capacity building at regional/State level

InstitutionalInterventions:
MadhyaPradesh,oneofIndiaslargeststates,hasbrokennewgroundby establishingacommitteeonclimatechange. GujarathasestablishedaDepartmentofClimateChange

Course Instructor: Er. Ashwani Kumar,

Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Policies to Promote Energy Efficiency & Renewable Energy

EnhancingEfficiencyofPowerPlants g y Coalbasedenergyeconomy(2/3rd share,IC135,000MW). ElectricityRegulatoryCommissionspolicy Linkingtariffstoefficiencyenhancement Incentiveforrenovationandmodernization Newplantstoadoptmoreefficientandcleancoal technologies
Supercriticaltechnologies IntegratedgasificationCombinedCycle Naturalgasbasedpowerplants Closedcycle3stagenuclearpower

EnergyLabelingProgrammeforAppliances

Policies to Promote Energy Efficiency & Renewable Energy

CleanDevelopmentMechanism:Riskminimizationindiffusionofrenewable energyandenergyefficienttechnologies d ffi i t t h l i ReformingEnergyMarkets(ElectricityAct2005,TariffPolicy2003,Petroleum &NaturalGasRegulatoryBoardAct,2006,etc.) & Natural Gas Regulatory Board Act 2006 etc ) RuralElectrificationPolicy,2006:Promotesrenewableenergytechnologies (gridisolatedareas) EthanolBlendingofGasoline(2003) EnergyConservationAct,2001:Reduceenergyconsumptionindifferent E C ti A t 2001 R d ti i diff t sectors.BureauofEnergyEfficiency(BEE)established

Er. Ashwani Kumar,

Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Policies to Promote Energy Efficiency & Renewable Energy

ElectricityfromRenewable:TheElectricityAct,2003,requiresState ElectricityRegulatoryCommissionstospecifyapercentageofelectricitythat theelectricitydistributioncompaniesmustprocurefromrenewablesources. Totalinstalledrenewablecapacitytoover11,000MWwithover7,000MWon T t l i t ll d bl it t 11 000 MW ith 7 000 MW windpower(fourthlargestIC) BiodieselPurchasePolicy:Biodieselprocurementbypetroleumcompanies. Biodiesel Purchase Policy: Biodiesel procurement by petroleum companies HydropowerandOtherrenewabletechnologies TheNationalHydroEnergyPolicyhasresultedintheacceleratedadditionof The National Hydro Energy Policy has resulted in the accelerated addition of hydropowerinIndia,whichisnowover35,000MW. HydroelectricInitiative,2003:50,000MWpotentialidentified. Renewabletechnologies (RETsforpower,RETsfortransportation,grid connectedsystems) NewandRenewableEnergyPolicy,2005:Promotesadoptionofsustainable andrenewableenergysources

Policies to Promote Energy Efficiency & Renewable Energy

EnergyConservationBuildingCode,2006 IntegratedEnergyPolicy(2006) BachatLampYojana(EfficientLampsProgram):Replacementof B h L Y j (Effi i L P ) R l f incandescentlampsbyCFLsunderCDM Othersprograms:Promotionof
Solarthermalwaterheaters, SolarPVs, Windpowergeneration, p g Biomassgasifiers,biogas Manuremanagement Fuelcells, Energyrecovery

2008:AmbitiousNuclearEnergyProgramme

Building Institutions
Integration through specialized institutions, such as the Ministry of New & Renewable Energy, the Bureau of Energy Efficiency, and the Technology Information, Forecasting & Assessment Council National Committee to Assess the Impacts of Climate Change is chaired by the Principal Scientific Advisor to the Prime Minister, and includes meteorologists, climate modelers, hydrologists, energy economists, as well as representatives of key Ministries. Prime Ministers Council on Climate Change (June 2007) , which includes representation of key Ministries, as well as experts, and representatives of industry and of media. y
Guidance on mainstreaming climate change in development, Identifies key intervention priorities, and Monitor implementation
Course Instructor: Er. Ashwani Kumar,
Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9

Post Copenhagen: Indian Position

Nolegalbindingontheemissionreductions N l l bi di h i i d i WillingnessofVoluntaryreductionofCarbonintensityofeconomy(GDP) upto 20 25 % b 2020 t 2025%by2020comparedto2005levels. d t 2005 l l NoPeakingyear Beyondthepercapitaapproach NoacceptanceofMRVforunsupported(internationalfinancingand N t f MRV f t d (i t ti l fi i d technology)actions Developmentprioritiesarenonnegotaiable D l i ii i bl GHGemissiongrowthratewouldbecontrolledwithoutanycommitment Soughtthetechnologysolution appropriate,affordableandeffective

What we committed in Cancun?

EvergreenRevolutionistheneedofthedayinIndiaalongwiththe innovativelowcarbontechnologiesinvariouseconomicsectors. Indiahasseriousvulnerabilityfortheclimatechangeimpacts Indiahasalreadytakenvariousproactivedomesticallysupportedand voluntarymeasureforreducingitscarbonemissionintensity Theclimatechangeconcernswillbepartofallfuturefiveyearsplansof thecountryinordertoprogressonthecommitmenttoreducethecarbon emissionintensityby2025%(of2005level)byyear2020. i i i i b 20 25% ( f 2005 l l) b 2020 EnergyFuelmixdiversificationisunderway
SolarandNuclearwillbesoonbecomethemajorshareinenergymix l d l ill b b h j h i i Cessoncoal IncreasedNaturalGasProduction PromotingR&Dforthecleanenergysources

What we committed in Cancun?

ForestryandCoastalZoneManagementProgramme Forestry and Coastal Zone Management Programme EstablishmentofIndianNetworkforClimateChangeassessment (INCCA) Establishingstrongercollaborativeprogrammeswiththeneighboring Establishing stronger collaborative programmes with the neighboring andinternationalCommunity

Thank you

Course Instructor: Er. Ashwani Kumar,

Asstt. Prof. Faculty of Planning, CEPT, Ahmedabad - 9