the world bank’s carbon finance business: joint implementation experience
DESCRIPTION
The World Bank’s Carbon Finance Business: Joint Implementation Experience. UNFCCC JI Workshop Moscow, May 26-27, 2004. Benoît Bosquet, World Bank Carbon Finance Business. Contents. World Bank and Climate Change World Bank Carbon Finance Products Current JI Projects Lessons Learnt from JI - PowerPoint PPT PresentationTRANSCRIPT
The World Bank’s Carbon Finance Business:
Joint Implementation Experience
Benoît Bosquet, World Bank Carbon Finance Business
UNFCCC JI Workshop Moscow, May 26-27, 2004
Contents
World Bank and Climate Change World Bank Carbon Finance Products Current JI Projects Lessons Learnt from JI Potential Future JI Projects AAU Greening Next Steps for Russia
World Bank and Climate Change
World Bank’s mission is poverty reduction WB endorses IPCC predictions Climate change, a “global public bad”, affects
the poorest the most Private-public initiatives needed to mitigate
climate change Take advantage of Kyoto flexible mechanisms Develop core CDM/JI market Expand “carbon finance” into small projects Demonstrate implementation of carbon sinks Build capacity of Host Countries
World Bank Carbon Finance Products
Italian Carbon Fund. $35 million (open). Italian Multi-shareholder. Multipurpose.
Netherlands Clean Development Facility. $125-180 million.
Netherlands Ministry of Environment. CDM energy projects.
BioCarbon Fund. $12.5 million (open).
Multi-shareholder. JI and CDM LULUCF projects.
Community Development Carbon Fund. $39.5 million (open).
Multi-shareholder. Small-scale CDM energy projects.
Prototype Carbon Fund. $180 million (closed).
Multi-shareholder. Multi-purpose.
Total funds under management, April 2004: ~ US$410 million
Netherlands JI
Facility
Netherlands JI Facility. $60 million with IFC (under negotiation). Netherlands Ministry of Economic Affairs. JI projects.
Current JI Projects (PCF)
Bulgaria Sofia and Pernik District Heating Bulgaria Svilosa Biomass Czech Energy Efficiency and Renewable Energy Hungary Pannonpower Latvia Liepaja Solid Waste Management Poland Stargard Geothermal Romania Afforestation of Degraded Agr. Land
Bulgaria Sofia and Pernik District Heating
Energy efficiency improvements (pipes, pumps, substations)
1,241,000 t CO2e (2005-2012) Pre-2008 credits under discussion: AAU
greening Baseline study, pre-validation Project submitted for Approval Contract under negotiation
Bulgaria Svilosa Biomass
Switch from heavy fuel oil to wood residue biomass in 13 MW boiler at wood pulp plant
450,000 t CO2e (2004-2012) Pre-2008 credits approved (1 t CO2e = 1
AAU) Baseline study, pre-validation, contract,
initial verification, start of generation
Czech Energy Efficiency and Renewable Energy
Umbrella agreement for several energy efficiency and renewable energy projects
Contracts with intermediaries: CEA, SEF 2 district heating projects in Decin and Rozmital
approved and validated: 212,000 t CO2e (2004-2012)
More projects under preparation, incl. Hydro Pre-2008 credits approved (1 t CO2e = 1 AAU)
Hungary Pécs Heat and Power
Switch from coal to biomass (wood chips) for co-generation (65 MWth and 49 MWe)
Pannonpower will supply heat to the city of Pécs and electricity to the grid
1,193,000 t CO2e (2008-2012)
Baseline study, pre-validation, contract
Latvia Liepaja Solid Waste Management
Recovery of landfill gas for electricity production
388,000 tCO2e (2004-2014)
Pre-2008 credits approved (1 t CO2e = 1 AAU)
Baseline study, pre-validation, contract
Poland Stargard Geothermal
13 MW geothermal project 300,000 tCO2e (2004-2012)
Pre-2008 credits approved (1 t CO2e = 1 AAU)
Baseline study Contract under negotiation
Romania Afforestation
Afforestation of 6,000 ha of degraded state-owned agricultural land
855,000 t CO2e (2003-2017) Pre-2008 credits approved (1 t CO2e = 1
AAU) Baseline study, pre-validation, contract,
initial verification, start of generation, first ER delivery
Lessons Learnt from JI (a)
Competitive market (more than CDM) Fewer projects than anticipated (only 10% of
PCF): Financing constraints in some countries What is the project approval process? Need to be creative for remunerating pre-2008
reductions: hybrid between Art.6 and 17 (“AAU Greening”), but controversial with some governments
Will there be enough headroom?
Lessons Learnt from JI (b)
Apply Track 2: waste of money? “CDM process” is still heavy, especially methodology
approval: too project-specific, not generic enough Focus on additionality not needed: Host Country
could sell ERs as ERUs or AAUs EU accession countries: how will JI coexist with
EU ETS? Move to Track 1 desirable
No need for establishing additionality, but Multiple standards, depending on Host Country
JI (and CDM) window of opportunity is closing due to long lead times
Potential Future JI Projects (BioCF, Netherlands JI, ICF)
Czech Republic: try Track 1 approach on portfolio of projects
Romania: N2O reduction, afforestation
Poland: Biomass, biodiesel, afforestation Russia: Fuel switch, coal bed methane capture,
energy efficiency Ukraine: Coal bed methane capture, forest
management
AAU Greening
“Project-based Art.17”, “early credits” and/or “late credits”
Sale of AAUs by Host, with reinvestment of revenues into climate-friendly projects (energy efficiency, carbon sinks, etc.)
Sale of AAUs to raise capital and service debt Discussed with several Governments More palatable to buyers than straight Art.17 Seller rebuilds its AAUs
Next Steps for Russia to Sell
Ratification of the Kyoto Protocol JI or AAU Greening To deal with the World Bank carbon funds:
Sign Memorandum of Understanding: who represents Russia?
Sign Host Country Agreement (if pre-2008 credits to be sold)
Endorsement/Approval of projects (many proposals received)
www.carbonfinance.org