lucas black (undp regional technical advisor for climate change
TRANSCRIPT
Supporting Countries to Transition to Low-Emission, Climate-Resilient Development (LECRD): UNDP Case Studies from South
Africa and the region
Lucas BlackUNDP Regional Technical Advisor
Climate Change Mitigation & Carbon FinanceEast & Southern Africa
ICLEI Local Climate Change Solutions for Africa Conference 2011February 28, 2011
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Greenhouse gas concentrations are reaching alarming levels…
• Atmospheric CO2 concentration has remained below 300ppm for at least the past 600,000 years.
• 550ppm (a doubling of pre-industrial greenhouse gas concentration) will be reached by 2035.
• Even if stabilization were to take place at 550ppm, there is:
― an 80% probability of exceeding2ºC (widely considered to be the threshold for ‘dangerous’ climate change)
― a 5% probability of an 11ºC rise
― a 1% probability of a 20ºC rise
Source: IPCC, 2007; Weitzman, 2009
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…to avert major climate impacts we must reduce global emissions by 50% by 2050
2007 2050
Today World
Average
South4.2 tCO2eq/Capita
North16.1 tCO2eq/Capita
2050 target:50% global emissions
CO2/Capita/year
Source: UNDP Human Development Report, 2007/08
• In the North – 80% cut in emissions
• In the South – 20% cut in emissions
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Although most of Africa’s emissions come from land use, global warming is essentially an energy problem
Energy28,407 MtCO2e
(65%)Agriculture,
6,075 MtCO2e(14%)
LULUCF: 5,380 MtCO2e (12%)
Industry: 1,866 MtCO2e (4%)
Waste 1,419 MtCO2e (3%)Internationalbunker fuels
959 MtCO2e (2%)
Source: WRI (2009); Baumert et al (2005); Houghton (2008)
Anthropogenic Greenhouse Gas Emissions
44,000 MtCO2e (44 billion
tonnes) per year
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South Africa’s emissions are high relative to the region and the rest of world, particularly in terms of carbon intensity of GDP
Source: LTMS
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Features of the Energy and Climate Change Challenge in Africa UNDP’s goal – in Africa and elsewhere – is to align human development and climate change management efforts that do not slow down but rather accelerate socio-economic progress.
Its widely acknowledged that successful climate change management in the region will require a coordinated mix of policy and financial instruments and interventions, much of it at a local level.
While Africa did little to contribute to the problem, the world will not be able to limit global temperature increases to below 2 degrees Celsius without reducing emissions from land use. Africa has a central role to play in that process.
Climate change management offers a number of “win-win” opportunities for African countries to both mitigate climate change while simultaneously addressing development concerns, namely energy access and food security.
According to a World Bank study, SSA has an estimated technical potential of more than 3,200 clean energy projects. If fully implemented, this estimated technical potential could provide more than 180 GW of additional power-generation capacity. The achievable avoidance of future GHG emissions would total about 740 million tCO2 per year, potentially translating into billion of dollars in carbon finance revenue.
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Energy Access and Scale-Up are Crucial for Much of Africa Generation requirements for universal electricity access, 2030 (TWh)
• The UN Advisory Group on Energy and Climate Change (AGECC) has estimated the amount needed to fund global modern energy access at $35-40 billion per year in loan capital and subsides, basing this assumption on the IEA 2009 developing country reference case for universal energy access.• An estimated 575 million people still rely on traditional biomass in Africa.• At present there is an investment gap to meet this required upfront capital, which for SSA is estimated at US$343 billion for the period 2010-2030 (IEA Universal Electrical Access Case).• To address climate change effects and harness the full benefits of energy access, it is crucial that the energy mix provided contain RE sources.
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What is it
• Sub-national authorities (regions, provinces, states, cities andmunicipalities) have a key role to play in actively incorporatingclimate change considerations in day-to-day business and inintroducing climate-friendly policies, regulations and investmentdecisions at their level, as a direct outreach to the public.
• Adaptation to climate change is very site-dependent, and localplanning decisions will be critical to tailor almost every singleadaptation action to the conditions in which it will take place.
• Similarly, 50% to 80% of GHG emissions are influenced by localbehavior and investment choices
• UNDP has developed a number of knowledge platforms andservices designed to specifically engage with sub-nationalauthorities across the spectrum of LECRD. Go tohttp://www.lowcarbonportal.org/
Local actors are key, however sub-national and localgovernments are confronted with a number of constraintsthat limit their ability to make LECRD interventions
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5 key steps to preparing a LECRD Strategy
Develop Partnership & Coordination
Structure
Prepare Climate Change Scenarios
• Climate scenarios• Vulnerability scenarios• GHG emissions scenarios
Identify Mitigation & Adaptation
Options• Identify priority M&A options through a multi-stakeholder consultative process
Assess Priority Climate Financing Needs
• Assess existing financing options• Undertake cost-benefit analysis of priority options• Identify Financial flow requirements• Identify policy & financing options
Finalize comprehensive Low Emission & Climate Change Resilient Policy Development
and Investment Roadmap
• UNDP is currently supporting sub-national authorities in Uganda, Nigeria,Senegal and Ethiopia in developing LECRD strategies in pilot provinces orat the city level; engagement is with planning and financial policy makers.• One example is joint work between Mckinsey & Co., DfID and UNDPEthiopia (among others) to support Ethiopia’s Climate Resilient GreenEconomy planning process. UNDP is also working with the City of Addis onseveral Carbon Finance (CDM) projects.
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IV. SELECT FUNDING OPTIONS
INTERNATIONAL NATIONAL & SUB-NATIONAL
Public Funds
Innovativefinance
Private Funds
At every level, policy-makers will need to adopt a strategic approach
• Market barriers
• Institutional barriers
• Social barriers
• Technical barriers
I. IDENTIFY PRIORITY MITIGATION ACTIONS & STRATEGY
• Capacity development and info-based instruments
• Regulations• Tax-based mechanisms• Early market-based
development mechanisms• Market-based mechanisms
II. DEFINE BARRIERS
III. SELECT APPROPRIATE MIX AND SEQUENCE OF SUPPORT POLICIES
Source: UNDP, Engineering Investability (2010) and McKinsey, GHG Abatement Cost Curve (2009)
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UN-REDD
Green Commodities
Facility
MDG Carbon Facility
Energy Access Facility
Territorial Approach
Community-based
Adaptation
Poverty and Environment
Facility
Selected UNDP policy & programdevelopmentservices and financial mechanism -specific expertise (Facilities)
Environmental Finance Facilities
To formulate, finance and implement MRVable low carbon and climate resilient strategies
$6 - 9 billion
$ Amounts available in developingcountries
(2010-2014)$15 billion
$200-400
billion
$200-500m
$80 billion
$75-150
billion
Global Environment Trust Funds• GEF Trust Fund
• Montreal Protocol Multilateral Fund• SCCF, LDCF, Adaptation Fund
Market based & Innovative Sources of Financing
• Carbon Finance (CDM/JI, VC, sectoral credit + financing)
• Insurance + other risk financing• Innovative mechanisms (e.g. IFIs, air levies
etc…)
UN/UNDP E&E Trust Funds (TF)• MDG Spanish Fund, E&E TF
Multi/bilateral funds• WB: CIF, FCPF, CPF
• Japan CEP, Norway CFI, Germany ICI, Australia IFCI
Institutional & Corporate Finance• Private equity funds
•Green bonds
New UNFCC Related Funds• REDD fund (s)
• Fast Start Funds (s)• COP green climate fund (M/A , REDD, TT, CD)
• Technology mechanisms
Foundations• UNF, Packard, Gates, Rockefeller
$3 billion
CC Risk Financing
UNDP’s institutional response to the emerging CC
architecture
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Case Study: UNDP-GEF South Africa Wind Energy Project (SAWEP)
Key outcomes of the SAWEP:• City of Cape Town Green Power Guarantee Scheme hosting agreement signed by DoE and
DBSA; currently finalizing guarantee agreement between DoE & City of Cape Town (funds are held at DBSA).
• Domain Protocol for Voluntary Tradable Renewable Energy Certificate System final report submitted.
• City of Cape Town started to sell green energy certificates (GECs) since April 2010.• Other key SAWEP activities include support for REFIT1, Wind Atlas, Wind Energy Capacity Credit
study, strengthening of SAWEA, various wind energy workshops and investigation into the development of a Wind Energy Industrial Strategy for South Africa.
“Green Power” funding and marketing in action at the local level
Supported the successful implementation of afirst-of-its-kind IPP demonstration project –the 5.2 MW Darling wind farm. This projectused a premium pricing model and enteredinto a 20 year Power Purchase Agreement(PPA) with the City of Cape Town, facilitatedby a UNDP-established, GEF-funded USD .5mGreen Power Guarantee Fund.
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Case Study: UNDP-GEF support for pioneering SSDG FiT Scheme in Mauritius
Key outcomes:
Addressing both energy security and climate change at a grassroots levelPrior to 2010, no framework existed which would allowsmall independent power producers to sell theirproduction on the grid. The Maurice Ile Durable vision ofthe Government was to enable the population toproduce their own electricity to achieve LT energyindependence and contribute to the fight against climatechange. An ambitious target of 35% electricity fromrenewable sources by 2025 has been established. Withinput from UNDP and support from GEF, the Ministry ofEnergy and Public Utilities together with the CentralElectricity Board launched a Grid Code in December2010 with a scheme for up to 200 SIPPs or 2 MWworth of Renewable Energy Systems.
Key outcomes of the project:• UNDP provided assistance at all stages of development of the grid code and FiT scheme, helping
advise on specific tariffs for different technologies (net metering) and installations sizes based on other success stories around the world.
• As of mid February 2011 – 2 months after the scheme was launched – 758kW worth of applications have been received, indicating that the first phase of the scheme is likely to be oversubscribed. Many of these applications are mini (2.5kW -10 kW) and small systems (10-50 kW); 51 residential PV applications (184.9 kW) have applied to date.
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UNDP-GEF support for pioneering SSDG FiT Scheme in Mauritius Addressing both energy security and climate change at a grassroots level
UNDP is working with many other countries on small scale RE & EE interventions in homes, buildings, schools and businesses
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North Africa
Robert Kelly
Regional Technical Advisor,Climate Change Mitigation
Eastern & Southern Africa
Lucas Black
Regional Technical Advisor,Climate Change Mitigation
West Africa
Benoit Lebot
Regional Technical Advisor,Climate Change Mitigation
“The battle against dangerous climate change is part of the fightfor humanity. Winning that battle will require far-reachingchanges at many levels—in consumption, in how we produceand price energy, and in international cooperation. Above all, itwill require far-reaching changes in how we think about ourecological interdependence, about social justice for theworld’s poor, and about the human rights and entitlementsof future generations.”
-- UNDP Human Development Report 2007/2008