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Yayasan Pelangi Indonesia
PELANGI
Doing Business while Mitigating Climate Change
Moekti H. Soejachmoen -Yayasan Pelangi Indonesia
Jakarta, 25 January 2006
Yayasan Pelangi Indonesia
PELANGI
Structure of presentation
Climate change – what is it Causes of climate change Impacts of climate change – in
Indonesia? Tackling climate change globally –
UNFCCC More actions – the Kyoto Protocol Clean Development Mechanisms
Yayasan Pelangi Indonesia
PELANGI
WHAT IS CLIMATE CHANGE?
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PELANGI
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PELANGI
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PELANGI
CAUSES OF
CLIMATE CHANGE
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PELANGI
Natural Causes of Climate Change
Volcanoes eruption Forest fire Respiration process – O2 CO2
Organic decomposition – CH4
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Anthropogenic Causes Fossil fuel combustion
Electricity & power generation Transportation
Industrial process Cement industries Hydrocarbon based industries
Non-energy activities: Agriculture, farming & husbandry Waste disposal – municipal waste Deforestation & land clearing
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IMPACTS OF
CLIMATE CHANGE
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Diseases outbreak at El-Nino 1997/98 (WHO)
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PELANGIAnnual Rainfall (A) 1931-1960 and (B)
1961-1990 (Source: Kaimudin, 2000)
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Predicted Impacts
Shifting of seasons – length and characteristics as well as period and duration
Changing of precipitation – strength, length and characteristics
Extreme weather – stormy weather, typhoon, extreme drought
Desertification – especially for arid area
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PELANGI
Predicted Impacts
Melting of ice (cryosphere) – not only polar ice but also other ice-caps
Sea level rise – small and flat islands Tropical diseases – malaria, dengue Degradation of biodiversity – coral reef,
fishes Food (in-)security – failed harvesting
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PELANGI
Impacts in IndonesiaIn Indonesia, based on studies (1994,
1998): Sea level rise – most coastal zone especially in
northern Java; eastern Sumatera; southern, eastern & western Kalimantan; western Sulawesi; swamp area in western and southern of Papua.
Impacts will be: Relocation of coastal population Loss of land Infrastructure and communication damages Special case for Jakarta – already sinking due to
draining of groundwater table, soil compression because of heavy construction. The sea level has risen 4.5 mm annually due to tectonic movements
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Agriculture – as impact of drought, flooding and shift of precipitation pattern: Deterioration of soil quality Soil erosion/land slides Abrupt changes in water supplies Declining of agricultural products
Coastal zone: Sea water warming (0.2-2.5C) Coral bleaching Diminishing of productivity of marine
resources Migration of marine species Marine-based tourism will be affected
heavily
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Human health – increase of diseases incidence: Malaria – due to changes in mosquito
breeding habitat and changes in incubation period
Dengue fever – (similar case as malaria) Cholera & diarrhea – due to
contamination of water supply by flooding
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PELANGI
TACKLING CLIMATE CHANGE
GLOBALLY
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End of 1980s
World Meteorological Organization (WMO) observed changes of world climate and meteorology
1988 Intergovernmental Panel on Climate Change (IPCC) was established by WMO and UNEP
1991 Intergovernmental Negotiating Committee (INC) was established by UNGA
1992 Earth Summit in Rio de Janeiro: The UNFCCC was signed
1994 UNFCCC has entered into force
1995 1st Session of the Conference of the Parties (COP-1) to the UNFCCC
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1997 Kyoto Protocol was adopted
2005 Kyoto Protocol has entered into force
2005 11th Session of the Conference of the Parties to the UNFCCC, Serving as the 1st Meeting of the Parties to the Kyoto Protocol (COP-11/MOP-1)
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United Nations Framework Convention
on Climate Change [UNFCCC]
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The Ultimate Objective
… is to achieve, in accordance with the relevant provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.
Such a level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner.
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Parties under the UNFCCC
Annex I Countries – industrialized and countries with economy in transition. Commit to limit and to reduce their GHG emissions.
Non-Annex 1 Countries (Developing Countries) – voluntarily limiting and reducing their GHG emissions while developing the countries in a sustainable manner.
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Entered into force in 1994 after ratified by 50 countries
Number of ratifying countries: 189 COP-1 to COP-10:
Berlin Mandate (COP-1) Kyoto Protocol (COP-3) Buenos Aires Plan of Actions (COP-4) Deadlocked (COP-6) COP-6bis Marrakech Accord (COP-7) The Delhi Ministerial Declaration on
Climate Change and Sustainable Development (COP-8)
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KYOTO PROTOCOL
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The Target of Kyoto Protocol The Parties included in Annex I shall,
individually or jointly, ensure that their aggregate anthropogenic carbon dioxide equivalent emissions of the greenhouse gases listed in Annex A do not exceed their assigned amounts, calculated pursuant to their quantified emission limitation and reduction commitments inscribed in Annex B and in accordance with the provisions of this Article, with a view to reducing their overall emissions of such gases by at least 5 per cent below 1990 levels in the commitment period 2008 to 2012.
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Flexibility Mechanisms To assist Annex I to fulfill their
commitment Between Annex I:
Joint Implementation Emission Trading
With Non-Annex I: Clean Development Mechanism
However, Annex I has to undertake ‘Domestic Action’
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Entered into force: 16 Februari 2005 after ratified by 141 countries
Ratifying countries: 156 1st Meeting of the Parties to the KP
during the 11th COP to the UNFCCC in Montreal, end of 2005
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CLEAN DEVELOPMENT MECHANISMS
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Objectives of the CDM
To assist developing countries to support sustainable development and to contribute to the objective of the UNFCCC;
To assist industrialized countries to fulfill their emissions limitation and reduction commitments;
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Industrialized
countriesDevelopin
gcountries
How does CDM work?
Emissions Reduction
CertifiedEmissions Reduction
(CERs)
Targeted Emission
s Reductio
n
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Buyers
Governments – Annex I: Netherlands, Denmark, Canada, Austria, etc.
Commercial funds – Natsource, EcoSecurities, etc.
Public private funds – World Bank CF, KfW CF, Japanese CF, etc.
Large companies – Shell, Mitsui, etc. Traders – RWE Trading, Shell
Trading, etc.
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Sellers – CDM Developers
Consultants and developers – DPSolusi, PEACE, etc.
Technology providers Utilities Large industries – Indocement Municipalities Companies
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Institutional setting of CDM
Conference of the Parties serving as
Meeting of the Parties (COP/MOP)
Countries / Parties
CDM Executive BoardSecretariat
(Accredited) Operational
Entities:Validation
(Accredited) Operational
Entities:Verification
Designated National Authority
(DNA)
Project Proponents
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CDM Executive Board Members:
10 members 10 alternate members
Representing: Annex I countries Non- Annex I countries 5 UN region SIDs (small islands developing states)
Supported by: CDM Secretariat CDM Methodologies Panel CDM Accreditation Panel CDM Afforestation and Reforestation Working
Group CDM Small-Scale Projects Working Group
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Designated Operational Entity (DOE)
Validate the proposed CDM project activities Verify and certify the reduction of GHGs Complies with host country laws Demonstrate that has no potential conflict of
interest Maintain publicly available list of CDM it
works on Submit annual report to EB Make information from CDM project
participants publicly available
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Designated Operational Entity (DOE)
Up to 24 January 2006: 12 OEs accredited and provisionally
designated for validation 3 OEs (of those 12) also accredited for
verification and certification 24 Accredited Entities with indicative
letter
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Sectors under CDM*
Sectoral Scope Approved methodologies
1. Energy industries (renewable/non-renewable sources)
Large scale, small scale, consolidated
2. Energy distribution Small scale
3. Energy demand Large scale, small scale
4. Manufacturing industries Large scale, small scale, consolidated
5. Chemical industries Large scale
6. Construction -none-
7. Transport Small scale
8. Mining/mineral production Consolidated
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Sectors under CDM*Sectoral Scope Approved
methodologies
9. Metal production -none-
10. Fugitive emissions from fuels (solid, oil and gas)
Large scale, small scale, consolidated
11. Fugitive emissions from production and consumption of halocarbons and sulphur hexafluoride
Large scale
12. Solvent use -none-
13. Waste handling and disposal Large scale, small scale, consolidated
14. Afforestation and reforestation Large scale
15. Agriculture Large scale, small scale* As per 24 January 2006
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Steps to develop a CDM project
2 Documentation
7 Implementation & Monitoring
3 Public consultation
4 Validation by Operational Entity
5 Approval by National Authority
8 Verification & Certification by OE
9 Issuance of CERs by EB
10
Transaction of CERs
2 Methodological approval 6 Registration by
Executive Board
1 Feasibility & Due Diligence
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Methodology
To define baseline and/or monitoring methods
Up to 24 January 2006: 25 methodologies for large scale projects 14 simplified small scale methodologies 8 consolidated methodologies
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Additionality
To show that the proposed CDM project will reduce the GHG emissions compared to the baseline – to ensure that the proposed project is not (part of) the baseline scenario
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Validation
The process of independent evaluation of the project activity by a Designated Operational Entity: Requirement of CDM Annexes and relevant decision of COP/MOP Based on Project Design Document
Up to 24 January 2006: 84 project activities are open for public comments under validation process
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Host Country Approval
Host country Designated National Authority to endorse and approve the CDM project: The project is voluntary Support achievement of the national
sustainable development goal
The letter of approval to be attached to the PDD for registration to the EB
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Registration The formal acceptance of by the
Executive Board of a validated project as a CDM project activity
Is a prerequisite for the verification, certification and issuance of CERs
Up to 24 January 2006: 77 project activities are registered 62 project activities are submitted for
registration
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Project Implementation and Monitoring
Implementation of CDM projects after registration – some projects can start before the registration
Monitoring of project performance in reducing GHG emissions – based on the Monitoring Plan
Up to 24 January 2006: 9 projects have published their monitoring report
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Certification/Verification of CDM project
Verification is the periodic independent review and ex post determination by the DOE of the monitored reductions during the verification period Verification of CDM project activity based on the
monitoring report Verification report will be submitted by the Designated
Operational Entity to the CDM-EB
Certification is the written assurance by the DOE that, during a specified time period, a project activity achieved the reductions as verified.
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Issuance & Transaction of CERs
The certification report shall constitute a request for issuance to the CDM-EB of CERs equal to the verified amount
Up to 24 January 2006: 5 project activities (issued) – 646,561 CERs 2 project activities (request for issuance) –
1,674,763 CERs
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Price of CERs Risks:
Project risks Project partner risks Registration risks Delivery risks Transfer and issuance risks
Co-benefits: Social benefit Environmental benefit
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THANK YOU
PelangiJalan Pangeran Antasari 10Kebayoran Baru, Jakarta 12150Indonesia
Tel: +62 (21) 7280-1172Fax: +62 (21) 7280-1174www.pelangi.or.id [email protected]