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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Thank you!

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Backup

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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