Challenges of CDM for Building Energy Efficiency UNFCCC Workshop Buildings under UNFCCC Flexible...
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Transcript of Challenges of CDM for Building Energy Efficiency UNFCCC Workshop Buildings under UNFCCC Flexible...
Challenges of CDM for Building Energy Efficiency
UNFCCC Workshop
Buildings under UNFCCC Flexible Mechanisms
Chia-Chin Cheng
UNEP-SBCIBeihang University
International Green Energy CenterBonn, GermanyMarch 24, 2011
Largest Potential for GHG Emission Reduction in Buildings
Source: IPCC 4th Assessment Report
Highest GHG reduction potential
Most cost effective
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Largest Potential Resides in Developing Countries
Source: IPCC 4th Assessment Report
Score Card for Building Projects in CDM
6 vs. 2700
2008
Score Card for Building Projects in CDM
31 vs. 5935
2011
2 vs. 80
Existing Building Related CDM Methodologies
AMS-II.E. Energy efficiency and fuel switching measures for buildings
31 2
AMS-III.AE Energy efficiency and renewable energy measures in new residential buildings
0 1
AMS-II.J. Demand-side activities for efficient lighting technologies (deemed savings)
41 5
AMS-II.K. Installation of co-generation or tri-generation systems supplying energy to commercial buildings
0 0
AMS-II.C Demand-side energy efficiency programmes for specific technologies
27 8
AM46 Distribution of efficient light bulbs to households 2 0
AM70 Manufacturing of energy efficient domestic refrigerators 1 0
AM71 Manufacturing and servicing of domestic refrigeration appliances using a low GWP refrigerant 0 0
Underlying causes for low CDM and EEB uptake Long-tail characteristics of the sector- small saving, big effort Fragmentation of sector / uncoordinated stakeholders Insufficient R&D and information for new EEB technologies Insufficient EEB expertise and tools High upfront and transaction costs for tech adoption in DC Lack financing mechanism and interests for EE investments Lack of awareness and general inertia restrict uptake
Source: Cheng, et al., 2008
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Old CDM’s Rules Add to Difficulties
Complex rules and procedures
High transaction costs, long lead time, not enough payback
Technology based methodologies are tedious to validate, monitor and verify carbon performance
Difficulty in establishing baselines for new buildings
Combination of different methodologies is not allowed for programmatic CDM
Soft measures (energy management measures) are not taken into account, and difficult to prove in the current verification scheme
Lack of mechanism to support low income sector
CDM does not support mandatory national standards
CDM’s Amazing Reform in Three Years Complex rules and procedures further simplify SSM Cancun decisions
High transaction costs, long lead time, not enough payback programmatic CDM and institutional reform
Technology based methodologies are tedious to validate, monitor and verify carbon performance new methodologies use whole building and simulation approach
Difficulty in establishing baselines for new buildings standardized baseline
Combination of different methodologies is not allowed for programmatic CDM addressed in EB 47
Soft measures (energy management measures) are not taken into account new methodology with whole building approach
Lack of mechanism to support low income sector new scenario allowed
CDM does not FULLY support national standards
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CDM has performed a substantial reform, but….For a large-scale uptake of building sector CDM CDM ALONE is NOT a sufficient incentive
The construction sector does not respond well to economic and voluntary incentives alone.
CDM ALMOST has to piggyback with other stronger and large- scale incentives Directly clash with additionality rules
Possible two larger scale incentives in building sector Government policies and standards are much stronger mechanisms to drive large-scale
actions Voluntary certification schemes started penetrating DC market
CDM needs to be ready to FULLY support government policies, building codes and NAMAs
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CDM’s Bottom-up Support for Long-Tail Building Projects
CDM’s bottom-up approach to overcome difficulties in small scale investment– with strong policy initiative in place
• Project and program based approach is especially suitable for long-tail projects
• individual mitigation opportunities are tackled one-by-one, project-by-project, CPA by CPA
Replicability makes scaling up of successful project modules easier• publicly available project documents and methodologies could facilitate
project replication
• programmatic CDM could potentially enable a large number of replications for small project activities
provide necessary means and resources to accelerate &deepen compliance
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CDM’s quality assurance mechanisms to induce change of practice• built-in quality control mechanisms and strict MRV requirements could
ensure long-term compliance
• induce change of business practices and internalization of energy saving behavior are the most important co-benefit of the CDM
adopting CDM is already additional maintain the benefit in simulation based methodology
Enhance private investment in EE buildings• reduce risks for small size projects by coordinated aggregation• CDM’s built-in quality control measures reduce risks of project default
and help to enhance project quality• enable life-cycle based financing
CDM revenue to pay for transaction and MRV & management costs
CDM’s Bottom-up Support for Long-Tail Building Projects
Short-term Challenge
• Establish facilitating methodologies based on industry and CDM’s good practices
Medium-term Challenge
• Develop standardized baselines and benchmarking for DC
Performance based- SBCI common carbon metrics
• Revisit additionality rules for buildings
building codes- no additionality
benchmarked additionality
The Avenue Forward…….
Long-term challenge
• CDM to fully support policy and NAMAs
Coming Up…
UNEP Risoe Working Paper
CDM, NAMAs and the Building Sector: a Two-Track Financing Mechanism for Post-2012
SBCI Common Metrics For More Information:
www.unepsbci.orgwww.uneprisoe.org