JOINT COORDINATION WORKSHOP
BREAKOUT SESSION 1.1. POA
MARCH 2011
PRESENTATION
BY
FELICITY SPORS (FSPORS@WORLDBANK.ORG)
WITH INPUTS FROM KLAUS OPPERMANN, MONALI RANADE
THE WORLD BANK CARBON FINANCE UNIT
Contents
• PoA – the vision vs. current situation
• PoA reform
–
–
–
–
Additionality for micro CPAs under a PoA
Baseline emissions
Monitoring
PoA procedures
• Why and how to create City-wide PoA
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Current situation versus the vision?
PoA Vision:
Actual situation
a)
1.
Reduce transaction
costs and facilitate
dispersed projects.
b) Small projects targeted
particularly from
under-represented or
LDC countries to
participate in CDM
c) Scale-up and
accelerate emission
reduction activities
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2.
3.
Limited private sector
involvement in PoAs due to
market and regulatory barriers.
Regulatory uncertainty
(regulations, procedures,
eligibility criteria, liability etc)
Complexity in applying
methodologies and tools
RESULT: PoA implementation
largely with public finance and
capacity building support.
PoA reform
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* Under CDM
PoA reform – additionality at the micro level
•
•
•
Current approach for CPA inclusion into a PoA requires that a CPA is a
collection of individual micro activities (e.g., a CFL); where additionality
assessment is then on the CPA level and monitoring by each CPA.
The current approach is not appropriate for dispersed micro activities that are
triggered by carbon co-financed incentive scheme. A group of micro activities
have to be artificially presented as a CPA and assessed like a stand alone
projects/project entities for the purpose of an additionality assessment.
Need a new PoA additionality approach, especially for activities in LDCs/SIDs,
under-represented countries & special underdeveloped regions within a country
PoA additionality approach for micro activities:
1. Assess individual micro unit through eligibility criteria (e.g., SHS, biogas digester)
2. PoAs on micro activities within LDCs/SIDs and underdeveloped zones are additional if
<=5MW RE or <=20GWh EE or <=20 Kt/y category III AND the PoA (with all
subsystems/measures are located in LDC/SID or special underdeveloped zone.
3. PoAs and subsystems/measures are additional if each independent subsystem/measure in the
project activity is equal or smaller to the following thresholds 750kW for RE, 600MWh for
EE, 600 tCO2eq/y for Type III activities AND end-users are HH/low income communities,
SMEs.
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Expand micro additionality approach for subsystems?
Each subsystem/measure <=
5MW RE, <=20 GWh EE, or
<=20kt/y Category III
projects
Yes
Is the geographic location of the
project in LDCs/SIDs or a special
underdeveloped zone?
No
No
Yes
Yes
Project is additional
Is the size of each
subsystem/measure size equal or
smaller than
< 750 kW RE, 600 MWh EE or 660
ktCO2e/y for type III activities?
End users of the subsystem
are households, low
income community, SMEs?
Yes
Project is additional
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No
No
Use of attachment A of
Appendix B of M&M of SSC
CDM
Use of attachment A of Appendix B
of M&M of SSC CDM
PoA Reform – Baseline emissions
•
No clear guidance on how to assess impact of mandatory law on baseline
emissions
– Methodologies are not clear on how any program that is helping to achieve
the greater compliance of the mandatory law should be treated especially
for calculating the baseline emissions
– Does the program require monitoring the compliance percentage and adjust
the emission reductions?
– How to calculate the compliance percentage?
– What is the threshold for considering that the program has helped the law
achieving compliance percentage? 50% or 75% or 100%??
– Should we build in an “autonomous improvement factor”? Say 2-3% per
year that can be discounted from the emission reduction calculation?
Clarification needed: As methodology is silent on this very important aspect (should
apply to all programs helps mandatory laws for greater enforcement), developers
might be forced to adopt overly conservative approaches forfeiting the benefits
envisaged by the program.
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PoA reform – monitoring
•
•
•
Current approach: monitoring requirements over burdensome. Extensive
monitoring data, expensive surveys and data requirements.
Sampling: Attaining a large economy of scale under a PoA is predicated, in part,
on employing sampling procedures during verification. Without sampling
procedures, all CPAs have to be visited by the DOE, resulting in enormous
verification costs
Allow deeming, especially for micro activities, with flexibility in sampling
New monitoring approach for PoAs :
1. Materiality – the concept can greatly assist with methodological barriers.
2. Sampling – Need sampling guidance for PoAs. Flexibility could be introduced i.e.
larger sample and less regular survey vs smaller samples more regular survey e.g.
SSC-I.I: “Biogas/biomass use for thermal applications for households/small users”
(top down developed approved EB59)
3. Standardized approaches such as defaults (e.g. energy savings default values,
building energy efficiency modeling estimates) or benchmarks if data available.
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PoA reform – procedures
•
•
•
Current procedures allow submission of requests for combining methodologies
but it is not clear how these are to be processed. E.g. can combine III
methodologies with more than one type I methodology as may be needed if
some CPAs generate heat whilst others generate electricity.
Debundling rules – inconsistency between PoA and CDM. Under the traditional
CDM, two project activities are not considered as de-bundled components of a
large-scale activity provided the first has been registered more than 2 years
earlier
Verification – problematic due to strict liability faced by DOEs.
Clarify procedures
1.
2.
3.
4.
Define process for requests for methodology combinations
Define timelines for PoA procedures
Address liability issue.
Allow CPA to start "before" consultation. CPA can start after PoA published for GSP
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Expanding PoAs to allow city-wide programmes
* Under CDM
What are the current options for Cities to access CDM?
City A
Waste
Transport
Option 1: Stand-alone
project in one large
city (e.g., LFG project)
water
City B
Waste
Transport
water
City C
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Waste
Option 2: Bundle of
two or more projects
in one city or across
multiple cities (e.g.,
EE in water pumping)
Transport
Options 3: PoA
across many cities
(e.g., Transport)
Why expand PoA rules to allow City-wide programs?
Emission reduction projects in
cities currently have limited
opportunity to access CDM as
1. Typically projects in cities,
except for large landfill or
composting t projects in
cities, yield small volumes
of ERs
2. Developers & Bundling
agents need clearances
from city council for each
project
3. Lack of good bundling
agents and CMEs to
support projects across
multiple cities
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What a city-wide PoA could look like.
PoA Coordinator
(CME)
Example of Projects
(CPA)
Water
Water supply
Energy
Street-light efficiency
Composting
Waste
Landfill Gas
Public transport
Transport
Low-carbon vehicles
Urban Forestry
Parks
Management, Implementation, monitoring & reporting
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Implementation over time
Mayor /
City Manager
Municipal
Departments
(Sector-wide)
Expanding PoA rules to allow City-wide programs
Pros:
1. The CME, City Mayor or Manager’s office, is a reputed, wellestablished, geographically definable government entity
2. The CME is legally responsible for provision of urban services and will
have long term control over operation of each project
3. Each project is distinct and uniquely identifiable, with a specific
department or unit in the city responsible for its management
4. Additionality related eligibility for joining PoA can be defined, validated
and tracked over time, based on either investment or barrier analysis
5. Validation or verification site-visits are limited to a single city
6. No possibility of double counting as the city maintains complete data
7. Others?
Cons:
1. No CDM rules on developing, validating or verifying such PoAs
2. Each CPA uses a different methodology, so validation and verification is
not easy
3. A new city government may not want to continue with the program
4. Others?
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Thanks for listening
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