■ In 2007 at the 13th Conference of the Parties to the UNFCCC (COP) in Bali, developing countries, for the first time, agreed to consider taking "measurable, reportable and verifiable" actions to mitigate emissions by working towards including developing country Parties' nationally appropriate mitigation actions (NAMAs) in a post-2012 framework.

■ This statement was followed up with a firmer commitment under the Cancun Agreements (Decision 1/CP.16) at COP 16, where developing countries agreed to "take nationally appropriate mitigation actions in the context of sustainable development, supported and enabled by technology, financing and capacity-building, aimed at achieving a deviation in emissions relative to 'business as usual' emissions in 2020."

■ But NAMAs are much more than a voluntary commitment. In fact, they may very well become the most important vehicle for developing countries to channel support of developed countries and multilateral development banks for investments in renewables, infrastructure projects, housing, waste management, and other sectors with potential for green development.

■ NAMAs also have potential to reduce risks for foreign investors and enhance confidence in the investment climate in developing countries in the energy and infrastructure investments; as an example the South African Renewable Independent Power Producer Procurement Programme was initiated by Parties in the context of the UNFCCC NAMA developments and created an investor friendly environment attracting significant private sector investments.

NATIONALLY APPROPRIATE MITIGATION ACTIONS (NAMAS)

From concept to opportunity

02

DEFINITION OF NAMAS

To date there is no clear definition of NAMAs, but an

emerging practice classifies proposed NAMAs into the

following three categories:

(1) Supported – Supported NAMAs are those actions funded

by Annex I (developed) nations involving a rather open-

ended notion of financial support. It is proposed that these

NAMAs will be listed on a UNFCCC registry and are subject

to international measurement, reporting and verification

(MRV) guidelines to be developed under the Convention (see

information on the NAMA registry and MRV below).

(2) Unilateral / Voluntary – For these NAMAs, a country

unilaterally says it will take a mitigation action without

asking for funding from developed nations. It is proposed

that domestically supported mitigation actions will be subject

to domestic MRV in accordance with guidelines to be

developed under the UNFCCC.

(3) Credited – Credited NAMAs provide developing

countries with financial support by crediting (using a carbon

commodity) certain emission reduction policies or initiatives.

It is possible that a credited NAMA could be linked to the

Clean Development Mechanism (CDM) or New Market

Mechanism (NMM). Credited NAMAs have been supported

by New Zealand, Switzerland, Papua New Guinea, and South

Korea.

While the form of financial support from developed nations

may currently be ambiguous, the UNFCCC’s financing

measures, Green Climate Fund, and NMM may offer

opportunities for linkages. Likewise, states may seek to use

funds from development programs, such as the United States

Agency for International Development (USAID), to fund

NAMAs.

THE NAMA REGISTRY

The Cancun Agreements initiated the process of establishing

a UNFCCC registry to record NAMAs to facilitate matching

of finance, technology and capacity-building support for

these actions from interested parties/investors, such as

developed nations or bilateral/multilateral institutions. COP

17 at Durban clarified the scope of the web-based registry

and invited detailed proposals for NAMAs to line up

matching investors. A separate registry was established to

recognise voluntary NAMAs not seeking foreign investment.

NAMAS SUBMITTED TO DATE

As of September 2012, 53 countries have submitted

NAMAs to the UNFCCC, ranging from projects to

policies to strategies with varying degrees of detail.

Progress on NAMAs is advancing, with many

international activities and proposals underway.

The NAMAs submitted to date can be classified into

seven sectors: energy supply, industry, buildings,

transport, waste, agriculture, and forestry. According to a

May 2012 report, it is estimated that 18 per cent of the

NAMAs are proposed for the energy supply sector, 9 per

cent for the industry sector, 11 per cent for buildings,

13 per cent for transport, 12 per cent for waste, 12 per

cent for agriculture and 18 per cent for the forestry sector.

Seven percent of NAMAs are not sector-specific, but

rather propose national GHG emission targets, such as

those from India and China. With regard to renewable

energy NAMAs, it appears that they can be classified as

unspecified (in the event that the NAMA does not address

a specific renewables source), solar, wind, geothermal,

biomass, and hydropower.

At the 36th session of the Subsidiary Body for

Implementation (SBI) in Bonn, Germany (May 14-25,

2012), the UNFCCC secretariat presented a design

prototype of the registry for the Parties consideration.

Additionally, the Parties continued workshops under the

Ad hoc Working Group for Long-term Cooperative Action

(AWG-LCA) to further understanding of the diversity of

mitigation actions, underlying assumptions and any

support needed to implement these actions, and produced a

report summariszing developments to date.

Conceptually, there are four stages of NAMA

development: feasibility study, concept, proposal/

planning and implementation.

(1) Feasibility Study - A feasibility study

describes a potential NAMA that does not yet

have government support.

(2) Concept Stage – In the concept stage, a

country will identify the NAMA sector and

specific mitigation objective, which has either

been published or will have traceable sources.

Documentation in addition to the official

submission to the UNFCCC should be provided.

(3) Proposal / Planning Stage – Once these

criteria have been met, the NAMA will progress to

the proposal/planning stage, where a country will

draft a proposal with a clear proponent and cost

estimates for the implementation of the NAMA,

support needs, and the estimated greenhouse gas

emission mitigation. Furthermore, it should

contain the types of activities to be conducted and

a time frame for their implementation.

(4) Implementation Stage – In the final stage, the

NAMA will have secured some level of support to

undertake the implementation activities specified

in the proposal and will have a previous NAMA

proposal that has been presented to the UNFCCC.

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FUNDING NAMAS

Although there are funds that are internationally available

and have been earmarked for NAMA funding, there is

not a one size fits all approach to NAMA funding. On

the other hand the South African example shows that a

well-designed NAMA can attract international

governmental support, the necessary guarantees, and

subsequently enormous private sector investments. The

more focused a country is in determining its NAMA

activities and to address risks that otherwise would

hinder investments in sectors such as renewables, the

more likely it is for this country to implement its

approaches and bring in substantial investments. The

key will be for countries to show their ability and

willingness to implement the NAMAs and make the step

from concept and capacity building to implementation of

clear frameworks that allows partners to understand the

costs and opportunities of the NAMAs. The

developments related to the Green Climate Fund have to

be watched as well. Advanced NAMA concepts seem

ideal for funding there (also under fast track funding).

AGENDA ITEMS AT DOHA

Negotiations concerning NAMAs are placed in the

negotiation track of the AWG-LCA but will also be

addressed under the Subsidiary Body for Scientific and

Technological Advice (SBSTA) and the SBI. Major

issues to be discussed include short and long-term

financing of NAMAs, deployment of the NAMA registry

prototype, and the development of guidelines for

measurement, reporting and verification (MRV) of

NAMAs.

With respect to the AWG-LCA, agenda item 3(b)(ii)

(Enhanced national/international action on mitigation of

climate change: NAMAs) addresses issues facing

developing country Parties as they prepare their NAMAs.

On a related note, agenda item 3(e) (Enhanced action on

the provision of financial resources and investment to

support action on mitigation and adaptation and

technology cooperation) and its subparts will be a major

focus for how financial mechanisms can help developing

countries implement NAMAs.

The SBSTA will cover methodological issues under the

convention relating to the creation of "General guidelines

for domestic measurement, reporting and verification of

domestically supported nationally appropriate mitigation

actions by developing country Parties" under agenda item

11(c). These MRV decisions will be important for

developing countries as they attempt to accurately

quantify the impacts of unilateral/voluntary NAMAs.

Finally, the SBI will initiate the rollout of the prototype

NAMA registry pursuant to agenda item 5(a). The

deployment of the NAMA registry prototype is expected

to take place in the first week of negotiations. Other

technical NAMA issues will be addressed under agenda

item 5(b) (Composition, modalities and procedures of the

team of technical experts under international consultations

and analysis).

DLA Piper will continuously monitor the developments in

this area. If you have any questions related to this or other

issues addressed at the Climate Change Conferences

please check our website or contact us directly.

KEY CONTACT

Alexander Sarac

Legal Director

T +44 (0)20 7153 7729

alexander.sarac@dlapiper.com

The most successful NAMA currently in the

implementation stage is the South African

Renewable Initiative (SARI). It aims to mobilise

funding, both domestic and international, and

increase sector expertise to stimulate renewable

energy in South Africa through 2030 by, among

other things, developing grid infrastructure. Other

unspecified NAMAs focus on price stabilisation,

such as the Chilean NAMA to implement a

stabilisation fund to protect renewable energy

projects against market fluctuation. An unspecified

NAMA from Barbados relates to reducing

dependency on fossil fuels by promoting the

generation of renewable energy.