Capacity Development for CDM The UNEP CDM Sustainable Development Impacts Guidebook Tunis, 27-29 August 2004

1. Capacity Development for CDM The UNEP CDM Sustainable Development Impacts Guidebook Tunis, 27-29 August 2004 Samir Amous, APEX, TunisiaRegional Centre for North Africa and Middle-East Capacity Development for CDM - RW4 / 27-29 August 2004

2.  Published by URC in June 2004 • Authors: 4 experts from URC • Almost 90 pages Capacity Development for CDM - RW4 / 27-29 August 2004

3. 8 Chapters • Introduction and outline • Article 12 KP addressing SD • Steps for SD assessments in CDM projects • SD in relation to CDM • Selecting SD Criteria for CDM projects • Selecting SD indicators for CDM projects Capacity Development for CDM - RW4 / 27-29 August 2004

4. 8 Chapters • Decision-making tools for SD evaluation • CDM and SD: case studies Annex: the South-South-North criteria and indicators Appraisal matrices Capacity Development for CDM - RW4 / 27-29 August 2004

5. 1. Introduction and outline • SD: a main driver for Non-Annex I partie participation to the CDM • Stress on the difficulties to assess SD contribution of CDM projects • The guidebook is meant to give a general introduction to policy makers and project developers how CDM projects can be developed in a way where they assist in achievement SD goals Capacity Development for CDM - RW4 / 27-29 August 2004

6. 2. Article 12 of KP and the link to SD • Explicit purpose of the CDM contribute to SD of host countries • The SD perspectives of the CDM – examples of areas where CDM can contribute to SD: • Increased Energy Efficiency • Sustainable energy production • Transfer of Technologies and Financial Resources • Local env. benefits • Poverty alleviation • Private and public sectgor capacity development Capacity Development for CDM - RW4 / 27-29 August 2004

7. 3. Six major steps of a SD assessment • Overview of Policy priorities reflecting the development context • Selecting SD Criteria based on national SD priorities • Initial screening of potential CDM projects • Outline of procedures for assessing SD impacts • General decision-making procedures • Evaluation performance of implemented CDM projects Capacity Development for CDM - RW4 / 27-29 August 2004

8. 3. Six major steps of a SD assessment 4. Outline of procedures for assessing SD impacts: • Identification and selection of SD indicators • Designate an approach for assessing the indicators • Format of Reporting: measurment standards and aggregation rules 5. General decision-making procedures: stakeholder dialogue, detailed SD assessment 6. Evaluation performance of implemented CDM projects Capacity Development for CDM - RW4 / 27-29 August 2004

9. 4. SD in relation to CDM • CDM and the SD perspective: Environment is the core issue, but also Development priorities of host countries • Some examples of SD criteria • Social (improve quality of life, alleviate poverty, improve equity • Economic: financial returns to local entities, positive impacts on balance of payments, transfer of nezw technologies • Environment: reduce GHG, conserve local resources, reduce pressure on local env., etc. Capacity Development for CDM - RW4 / 27-29 August 2004

10. 4. SD in relation to CDM • SD criteria for CDM are largely overlapping with national Dev. CriteriaLarge potential synergies • Operationalizing SD at the project level: if a project contribute to SD at its level, it will have a positive impact on SD at national level (although marginal): • SD criteria should be meaningful from a project level perspectiveappropriate indicators • The overall SD impacts should be positive • The negative/irreversible side-effects should be taken into account Capacity Development for CDM - RW4 / 27-29 August 2004

11. 4. SD in relation to CDM • Aggregate SD impacts: how to interpret the resultsnegative VS positive impacts • How to address the trade-offs • Compensation of the negative impacts • In absence of reliable calculationonly limited impacts are acceptable (above safe minimum level) Capacity Development for CDM - RW4 / 27-29 August 2004

12. 5. Select SD criteria • Link CDM projects to national SD criteria: • Screening the Millenium Development Goals: formalized targets: • E.g. Halve the proportion of people whose income is less than US$ 1 between 1990-2015goals and indicators • E.g. achieve significant improvement in the lives of at least 100 millions slum dwellers in Indiacommission 14 GW hydro • In general: linkage between MDG and Energymeet national power demandhow can CDM support rural electrification Capacity Development for CDM - RW4 / 27-29 August 2004

13. Desirable properties of SD indicators • Complete: all dimensions are reflected through the set of indicators • Operational • Decomposable • Non redundant • Minimal Capacity Development for CDM - RW4 / 27-29 August 2004

14. Some examples of SD indicators • Employment: nbr man-years generated • Growth : Net Surplus achieved • Exhaustible resources: physical units Capacity Development for CDM - RW4 / 27-29 August 2004

15. Some examples of applying SD • Hypothetical illustration (e.g. biogas in rural area) • Only qualitative assessment Capacity Development for CDM - RW4 / 27-29 August 2004

16. Conclusion regarding indicators • Indicators are necessary for any assessment procedure • There are many qualitative and quantitative indicators available in the litterature that we need to define for assessing CDM projects Capacity Development for CDM - RW4 / 27-29 August 2004

17. 7. Decision making tools for SD evaluation • A number of Tools are available: Cost-benefit analysis, Multicriteria analysis, Ranking methodologies • Can be carried out in a simple or more complex way • Key advantage and disadvantages of each approach Capacity Development for CDM - RW4 / 27-29 August 2004

18. 7. Decision making tools for SD evaluation • Cost-effectiveness analysis: cost of the mitigation against potential reductions • Simple, but • Difficulties in predicting the future • Care is needed when defining the relevant cost: financial VS economic costs, etc. • Cost-benefit analysis: all costs of the project (either negative or positive): • Time cost, lack of transparencymore relevant for CDM programmes • Readily appliable for larger CDM projects Capacity Development for CDM - RW4 / 27-29 August 2004

19. 7. Decision making tools for SD evaluation • Multicriteria analysis: weighting the different criteria, combine scores and obtain an overall value, examine the result, conduct sensitivity analysis: • Widely used • Attractive approach • Ranking methodologies: simple checklist approach (identification of indicators, notations: negative, neutral, positive, weights), best practice (project against the baseline, -1 to +1), Analytical Hierarchy Processclose to multicriteria Analysisscoring and weighting tool for non quantifiable attributes Capacity Development for CDM - RW4 / 27-29 August 2004

20. 8. Case studies • South-South-North initiative: the Checklist approach (details in annex A). Indicators: • -2 to +2: • -2: Major negative impacts (ecological, social, economic, etc. • -1: very minor negative impacts • Applications: • South Africa (biomass) • Brazil (Biodiesel) • Too many criteria, high level of subjectivity associated with using scores to qualitatives cirteria Capacity Development for CDM - RW4 / 27-29 August 2004

21. 8. Case studies • Multicriteria analysis: • Egypt (better guidance to apply indicators, but varying number of indicators in each type of criteria, a sensitivity analysis is required) • Cost-effectiveness Approach Applications (dependent of the discount rate, carbon benefits are rarely crucial to justify the project, etc.) : • Egypt • Philippines • Uganda Capacity Development for CDM - RW4 / 27-29 August 2004

22. END OF THE PRESENTATION Thanks Capacity Development for CDM - RW4 / 27-29 August 2004