Climate change mitigation and international finance: the effectiveness of the Clean Development Mechanism and the Global Environment Facility in India and Brazil

This study analyzes the effectiveness and efficiency of the two principal United Nations (UN) climate change mitigation finance mechanisms, the Clean Development Mechanism (CDM) and the Global Environment Facility (GEF). The realised abatement and costs of the two mechanisms in India and Brazil (using data from 28 GEF and 233 CDM project documents) are compared with theoretical marginal abatement cost curves, based on bottom-up technology studies. We find that both mechanisms have focused on negative and low-cost abatement potential but still leave substantial theoretical potential in this cost range untapped. CDM has more effectively harvested abatement potential of industrial gases and methane emissions, whereas GEF has more successfully targeted demand-side energy efficiency (EE) and transport emission reduction opportunities. CDM has excelled at capturing abatement potential in areas with a limited understanding of abatement, highlighting the shortcomings of theoretical estimates (such as Marginal Abatement Cost Curves) and the benefits of a market mechanism. In some sectors and technologies (particularly renewable energy), the two mechanisms overlapped, which suggests a need for better coordination in the future.     

UNFCCC Kyoto Protocol Clean Development Mechanism Baseline Construction for Vietnam National Electricity Grid

For projects under the UNFCCC Kyoto Protocol Clean Development Mechanism (CDM), a baseline has to be set to allow calculation of the greenhouse gas emissions reductions achieved. An important obstacle to CDM project development is the lack of data for baseline definition; often project developers do not have access to data and therefore incur high transaction costs to collect them. The government of Vietnam has set up all necessary institutions for CDM, wants to promote CDM projects and thus is interested to reduce transaction costs. We calculate emission factors of the Vietnam electricity grid according to the rules defined by the CDM Executive Board for small scale projects and for large renewable electricity generation projects. The emission factors lie between 365 and 899 g CO₂/kWh depending on the specification. The weighted operating and build margin reaches 600 g for 2003, while grid average reaches 399 g. Using three-year averages, a combined build and operating margin of 705 g is calculated. We hope that these data facilitate CDM project development in the electricity supply and energy efficiency improvement in Vietnam.     

Bioenergy and the CDM in the Emerging Market for Carbon Credits

This paper analyses the eligibility of different types of biomass energy projects in developing countries for funding under the Kyoto Protocol's Clean Development Mechanism and related funds. Specifically, GHG emission reductions through the replacement of non-renewable types of biomass with renewable energy, or the improvement of the efficiency of energy systems based on non-renewable biomass, is discussed in more detail, as it is currently difficult if not impossible for these to qualify as CDM projects under current rules. These problems are caused by the categorical exclusion of land-use from the CDM (with the exception of afforestation and reforestation projects). The paper offers some possible solutions for both small-scale and large-scale CDM projects. These limitations hold for a number of carbon funds. The paper covers of the major funds operated by the World Bank and that are already operational, to point out differences between existing funds in order to identify the best opportunities for different biomass sources and technologies. This systematic, comparative analysis covers the characteristics of the different funds in terms of eligible technologies, geographical foci, and size (targets and completed and ongoing transactions, CO₂ equivalents, project asset values). To provide the context for the analysis of the carbon funds, the regulatory drivers and frameworks influencing the demand side of the market are discussed. This first of its kind analysis for the specifics of the carbon market regarding bioenergy enables decision makers and project managers active or planning to become active in the area, to identify and target the most promising funds for their specific purposes.     

Sustainable energy investments: contributions of the Global Environment Facility

Addressing energy, economic and environment security is a pressing challenge for nations worldwide. Global energy demand is projected to increase by 45% during the next 20 years, with the fastest growth in developing and transition countries. Over the past two decades, the Global Environment Facility (GEF) has invested in a portfolio of sustainable energy projects with an emphasis on energy efficiency, renewable energy, and urban transport. These projects address many different national priorities including infrastructure, technologies, policies, best practices, institutions, and capacity building. Since 1991, more than US2,735 billion has been invested in energy sector projects with an additional US2,735 billion has been invested in energy sector projects with an additional US17.118 billion in co-financing from governments and the private sector. US1,186 billion, together with US1,186 billion, together with US7,092 billion in co-finance, has been invested in energy efficiency projects that deploy new technologies, develop institutional and human capacity, disseminate best practices, and build public awareness and understanding. GEF renewable energy investments of US1,298 billion, with co-financing of US1,298 billion, with co-financing of US7,555 billion, have advanced demonstration and deployment of solar thermal heating, solar thermal power, photovoltaics, wind power, geothermal energy, small hydropower, biomass, and combined technologies and best practices across 5 continents. The GEF has invested US251 million (with US251 million (with US2,471 billion in co-finance) in urban transport projects that address transport strategies, infrastructure, and mobility technology solutions. These energy efficiency, renewable energy and urban transport projects contributed to the direct reduction of about 1.7 billion tons of greenhouse gas emissions. Other tangible environmental benefits also flowed from these GEF investments. Case studies of representative projects are presented to illustrate lessons learned from the energy efficiency, renewable, energy, and urban transport investments. Experiences from GEF investments can inform development and implementation of future sustainable energy investments.     

生物质发电项目碳排放计算方法应用研究

生物质发电是将废弃生物质变成可再生能源得以充分利用,这些工程将减少来自于生物质自然腐烂和无控燃烧产生的温室效应,这不仅节约了煤炭,同时也减少了二氧化碳的排放。本文中以某生物质项目发电为例,根据CDM方法学ACM0006计算了该项目的减排量。结果表明,该项目10年间共减少了二氧化碳排放量2 075 140吨,给中国带来了可观的经济效益和环境效益。     

Assessing audit impact and thoroughness of VCS forest carbon offset projects

Voluntary markets transacted over $66 million USD of forest carbon offsets in 2016, according to Forest Trends, and over 99% of those offset projects were audited to a standard, primarily the Verified Carbon Standard (VCS). We provide a table characterizing all 70 validated and verified forest carbon projects employing the VCS version 3.0 currently-in-use (December 2011–July 2017). We also examine two separate aspects of the audit process––impact and thoroughness––to assess the effectiveness of the costly audit process, which can consume up to one-third of offset revenue. Audit impact we measure in terms of reduction in the number of offsets from ex ante estimated to ex post approved. Audit thoroughness we measure both directly in terms of the number of auditor hours worked per project and also indirectly in terms of the total number of Corrective Action Requests (CARs)/Non-Conformity Reports (NCRs) auditors prescribe. In terms of impact, we find that Afforestation/Reforestation/Restoration (A/R/R) and Improved Forest Management (IFM) projects, though only constituting 5% of total verified offsets, demonstrate significant (p < = 0.05) reductions from ex ante estimated to ex post approved offsets, likely because auditors can easily scrutinize carbon stocks/emission factors for the commercial tree species involved in these project types. In terms of thoroughness, we find that higher ex ante estimates correlate with more total auditor hours worked and total CARs/NCRs prescribed for three of four project activity types, likely because auditors perceive larger ex ante projects as higher risk. We conclude with recommendations for the VCS to empower auditors to scrutinize carbon stocks/emissions factors from avoided deforestation projects, and also to continue to flag high ex ante projects as higher risk.     

Cleaner production as climate investment—integrated assessment in Taiyuan City,China

Taiyuan, one of the most polluted cities in the world, is the first cleaner production demonstration city in China. We assess energy related cleaner production projects in Taiyuan from the point of view of climate change and integrated assessment. In the assessment we develop a rather detailed methodology that relies on a battery of chained models All of the projects improve energy efficiency and reduce emissions. Still, we find that their environmental health benefit differs substantially. The projects are treated similarly from point of view of funding and the regularatory process. Yet, we find that their cost differs substantially, and there is no proportionality between costs and benefits. The finding could supplement explanations of cleaner production progress that rely on financial and institutional barriers. We also ask if the positive attitude to cleaner production in China may help the country introduce greenhouse gas saving projects under another name. It turns out that some, but not all of the projects we analyse have significant greenhouse gas reduction potential. The possibility for foreign funding as CDM projects is discussed.     

碳税对我国宏观经济及可再生能源发电技术的影响——基于电力部门细分的CGE模型

本文基于电力行业上市公司年报数据将传统CGE模型中的电力部门细分为7个发电部门,其中包含水电、风电、光伏和生物质电4个可再生能源发电部门.首先基于传统CGE模型和电力部门细分的CGE模型比较了我国引入可再生能源发电技术前后征收碳税对宏观经济的影响,然后分析了单一碳税政策、碳税与可再生能源发电补贴复合政策对可再生能源发电技术发展的影响.研究发现：引入可再生能源发电技术后,征收碳税对宏观经济的负面影响相比没有引入而言将有所降低;征收碳税将促进可再生能源发电技术的发展;在征收碳税的同时如果对特定可再生能源发电技术给予补贴,可能会对未受到补贴且不具备成本比较优势的可再生能源发电技术产生“挤出效应”.     

Implementing the hydrogen economy

In the Icelandic community the use of renewable energy and the tests with a clean domestic fuel that most people refer to as the fuel of the future have become the points of focus. In Reykjavik this future has arrived. Hydrogen is used currently as the energy carrier within the public transportation system and is electrolyzed from water with hydroelectric power and leaves the system as water again.A small collaboration platform, Icelandic New Energy Ltd (INE), has been working on projects related to hydrogen as an energy carrier since 1999. A number of projects and feasibility studies are currently being carried out in Reykjavik, revolving around the issue of making hydrogen domestically from water and renewable energy (hydro and geothermal power), abundant local resources.In April 2003 the first electrolytic hydrogen production, compression and filling station was inaugurated in Reykjavik. The refueling station is designed to be open to public services. The hydrogen station is a delivery to be tested within the project ECTOS, the Ecological City Transport System — a fuel cell bus demonstration running between 2003 and 2005. A socioeconomic and environmental research methodology has been established and followed for three years now. The outcomes of ECTOS are needed to establish the basis of further decisions of integrating hydrogen into societal functions. Amongst the undertakings is a forecast for the scale and costs of the essential infrastructure. General surveys have shown that Icelanders have a high general acceptance towards using hydrogen as a fuel for the transportation sector and fishing vessels. Therefore it is presumed that hydrogen fuel stations need only to be established in a limited number before hydrogen fuel vehicles can be introduced in the public market. Yet, a realistic time-frame depends on the hands-on experience, the performance and availability of the equipment in the market. In 2005 the outcomes and experiences from the ECTOS project will be published.     

Renewable energy resources and technologies in Nigeria: present situation, future prospects and policy framework

Nigeria is endowed with abundant energy resources, both conventional and renewable, whichprovide her with immense capacity to develop an effective national energy plan. However, introduction of renewable energyresources into the nation's energy mix have implications on itsenergy budget. The national energy supply system has been projected intothe future using MARKAL, a large scale linear optimization model.However, this model may not be absolutely representative of the highlynon-linear future of renewable energy. Results of the model reveal that under onlya least cost constraint, only large hydro power technology is the prominentcommercial renewable energy technology in the electricity supply mix of thecountry. Despite the immense solar energy potentials available, solar electricity generation is attractive only under severeCO2 emissions mitigation of the nation's energy supply system. Similarly, the penetration of small-scale hydro power technology in theelectricity supply mix is favoured only under CO₂ emissionsconstraints. Due to economy of scale, large hydropower technology takes the lion share of all the commercial renewableenergy resources share for electricity generation under any CO₂emissions constraint. These analyses reveal that some barriers exist to thedevelopment and penetration of renewable energy resources electricity production in Nigeria's energy supplysystem. Barriers and possible strategies to overcome them arediscussed. Intensive efforts and realistic approachtowards energy supply system in the country will have to be adopted inorder to adequately exploit renewable energy resources and technologiesfor economic growth and development.     

CDM项目大气污染物减排的协同效应研究

为了CDM项目的优化开发和大气污染物的协同控制,就国内CDM项目的污染物减排协同效应进行了分析.在统计其项目年减排量、总投资额以及协同减排系数的基础上,按不同项目类型(零排放的可再生能源、生物质、甲烷废气回收、燃料替代、煤层气回收、水泥原料替代、N2O分解消除以及节能和提高能效)和不同项目所在地(华中、华东、海南、华北、东北、西北以及华南)分析了项目的SO2、NOx和PM2.5协同减排量和投资减排收益.燃料替代、煤层气回收、节能提高能效类项目的投资减排收益高,华中和华东地区的生物质能源项目收益较高,而风电、水电类项目收益较低.     

Assessment of renewable energy potential and policy in Turkey – Toward the acquisition period in European Union

This paper aims to assess the renewable energy capacity of Turkey in order to consider main priorities in the energy policy of Turkey. In this paper, renewable energy potential and regulatory conditions are discussed in Turkey in comparison with European Union. The results of the study implemented within the framework of EnviroGRIDS project indicated a promising yet very susceptible future for the implementation of renewable energy power plants in Turkey. The forecasts have shown that the solar power potential utilization is becoming more significant after 2020. The projections for 2050 indicate that electricity consumption from small and medium renewable energy sources including solar and wind will constitute 15% of the total, whereas the solar thermal will constitute around 16%. Geothermal and other renewables will remain around 3%. According to the high demand scenario, in 2050 the share of hydropower in overall electricity generation will be 12%, followed by solar power at 7% and wind power at 3%. Additionally, renewable energy policy and regulations in Turkey and in EU are overviewed in this study. On the contrary to EU, the constant feed-in tariff amount does not consider capital investments of specific energy sources in Turkey that brings disadvantage to the implementation. However, new regulations published and currently applied should be accepted as milestones in acquisition period of Turkey in EU.     

生物质发电项目碳排放计算方法应用研究

生物质发电是将废弃生物质变成可再生能源得以充分利用,这些工程将减少来自于生物质自然腐烂和无控燃烧产生的温室效应,这不仅节约了煤炭的同时也减少了二氧化碳的排放。本文中以某生物质项目发电为例,根据CDM方法学ACM0006计算了该项目的减排量。结果表明,该项目10年间共减少了二氧化碳排放量2,075,140 t,给我国带来了可观的经济效益和环境效益。     

Integrated assessment of CCS in the German power plant sector with special emphasis on the competition with renewable energy technologies

The study presents the results of an integrated assessment of carbon capture and storage (CCS) in the power plant sector in Germany, with special emphasis on the competition with renewable energy technologies. Assessment dimensions comprise technical, economic and environmental aspects, long-term scenario analysis, the role of stakeholders and public acceptance and regulatory issues. The results lead to the overall conclusion that there might not necessarily be a need to focus additionally on CCS in the power plant sector. Even in case of ambitious climate protection targets, current energy policy priorities (expansion of renewable energies and combined heat and power plants as well as enhanced energy productivity) result in a limited demand for CCS. In case that the large energy saving potential aimed for can only partly be implemented, the rising gap in CO₂ reduction could only be closed by setting up a CCS-maximum strategy. In this case, up to 22% (41 GW) of the totally installed load in 2050 could be based on CCS. Assuming a more realistic scenario variant applying CCS to only 20 GW or lower would not be sufficient to reach the envisaged climate targets in the electricity sector. Furthermore, the growing public opposition against CO₂ storage projects appears as a key barrier, supplemented by major uncertainties concerning the estimation of storage potentials, the long-term cost development as well as the environmental burdens which abound when applying a life-cycle approach. However, recently, alternative applications are being increasingly considered?Cthat is the capture of CO₂ at industrial point sources and biomass based energy production (electricity, heat and fuels) where assessment studies for exploring the potentials, limits and requirements for commercial use are missing so far. Globally, CCS at power plants might be an important climate protection technology: coal-consuming countries such as China and India are increasingly moving centre stage into the debate. Here, similar investigations on the development and the integration of both, CCS and renewable energies, into the individual energy system structures of such countries would be reasonable.     

Millennium development goals and clean development: synergies in the Pacific

This paper addresses synergies between the Millennium Development Goals (MDGs) and the Clean Development Mechanism (CDM), and considers how the CDM can facilitate the MDGs in Pacific Island Countries (PICs). To date, only 6 CDM projects have been registered in PICs, highlighting the ‘lose-lose’ business case that applies to this type of project development. This paper identifies constraints on and opportunities for CDM project development in PICs, and proposes a range of specific policy reform measures that could alter existing negative investment profiles. Key findings are that small-scale agricultural projects providing renewable energy from existing sources of biomass (currently seen as waste) are ideal candidates for CDM investment in PICs, and that the single most important reform to facilitate CDM activity and contribute to achieving the MDGs would be the implementation of a regional approach to CDM administration, in which a regional body became the designated CDM Authority for all states in the region. This would offset investment risk, improve governance transparency, and facilitate a targeted approach to sustainable development activities in the Pacific region.     

The elephant in the room – A comparative study of uncertainties in carbon offsets

The clean development mechanism (CDM) is a flexible mechanism under the Kyoto Protocol, which makes it possible for developed countries to offset their emissions of greenhouse gases through investing in climate change mitigation projects in developing countries. When the mitigation benefit of a CDM project is quantified, measurable uncertainties arise that can be minimised using established statistical methods. In addition, some unmeasurable uncertainties arise, such as the rebound effect of demand-side energy efficiency projects. Many project types related to land use, land-use change and forestry (LULUCF) have been excluded from the CDM in part because of the high degree of statistical uncertainty in measurements of the carbon sink and risk of non-permanence. However, recent discussions within the United Nations Framework Convention on Climate Change (UNFCCC) have opened up for the possibility of including more LULUCF activities in the future. In the light of this discussion, we highlight different aspects of uncertainties in LULUCF projects (e.g. the risk of non-permanence and the size of the carbon sink) in relation to other CDM project categories such as renewables and demand-side energy efficiency. We quantify the uncertainties, compare the magnitudes of the uncertainties in different project categories and conclude that uncertainties could be just as significant in CDM project categories such as renewables as in LULUCF projects. The CDM is a useful way of including and engaging developing countries in climate change mitigation and could be a good source of financial support for LULUCF mitigation activities. Given their enormous mitigation potential, we argue that additional LULUCF activities should be included in the CDM and other future climate policy instruments. Furthermore, we note that Nationally Appropriate Mitigation Actions (NAMAs) are currently being submitted to the UNFCCC by developing countries. Unfortunately, the under-representation of LULUCF in comparison to its potential is evident in the NAMAs submitted so far, just as it has been in the CDM. Capacity building under the CDM may influence NAMAs and there is a risk of transferring the view on uncertainties to NAMAs.     

生物质能源及发电技术研究

随着能源消耗和环境污染之间矛盾的加剧,使得人类需要寻找一些相对比较清洁的可再生能源。生物质能源由于其数量巨大,环境污染小,并具有可再生性,成为目前比较好的选择之一。生物质能发电是生物质能利用的主要方式之一。介绍了生物质能的特点及利用转化方式,重点讲述了直接燃烧发电技术、气化发电技术以及生物质燃料电池技术,最后根据我国国情指出了生物质能利用的主要问题及几点建议。对我国生物质能发电的发展提供了技术参考和技术支持。     

Preserving Environmental Integrity in standardised baselines: The role of additionality and uncertainty

The European Union EU project PROBASE hasexplored a range of possible multi projectstandardised benchmarks as a way ofencouraging projects under Joint Implementation (JI) and the Clean Development Mechanism (CDM)by minimising transaction costs. The aim ofthis paper is to examine the environmentalintegrity of the use of standardisedbaselines and to explore the role ofadditionality. The environmental integritydepends on the uncertainty in emissionreductions, which was estimated bygenerating scenario baselines and comparingthese with the standardised baselines. Thishas allowed a comparison of selected multiproject baselines with the envelope ofuncertainty on the reductions. The projectsincluded a range of electricity supply,heat sector, cogeneration and methane(CH$_{4}$) projects in different countries. Theanalysis showed that the key uncertaintieswere in the technology fuel selection inthe baseline, the continued additionalityof the project emission reductions,uncertainties in some project emissions(e.g. spinning reserve emissions for wind)and data uncertainties. The effect on theestimation of reductions was in the range±12% to ±46% for the electricityprojects and from ±19% to ±57%for the heat and Combined Heat and Power CHP sector projects.Comparison with the envelope of uncertaintyfor the range of projects showed that multiproject electricity sector baselines whichhave been weighted or use high technologyperformance benchmarks (e.g. Organization for Economic Cooperation and Development OECD)can provide conservative estimates buttheir general nature can lead to variationsbetween countries. We would recommend thatthe country-specific context must be takeninto account so that standardised baselinesfor the electricity sector are generated onthe basis of country specificcharacteristics, the project type, andwhether it provides new or existing demand.The conservative scenario produced shouldthen be weighted. Whereas weightings havebeen applied to account for uncertaintiesor to bias towards renewables, we havesuggested a weighting factor of 25% on theelectricity baseline for large projectsbased on an analysis of the effect ofnon-additionality on emission reductionuncertainty. For heat projects, theappropriate benchmark is a technology/fuelbenchmark which is deemed relevant for theheat sector in that (part of the) country.Again we suggest that a weighted sectorbaseline is required to take account of theuncertainties. These recommendations applyto large projects only for a 10-yearcrediting lifetime.     

CDM potential of SPV lighting systems in India

In view of the increasing interest in the development and dissemination of technologies for harnessing new and renewable sources of energy in India, there have also been some efforts towards their use in the domestic lighting sector. However, the cumulative number of Solar Photovoltaic (SPV) lighting systems such as SPV lanterns and solar home lighting systems in India is far below their theoretical potential despite government subsidy programmes. One of the major barriers is the high capital investment in these systems. The Clean Development Mechanism (CDM) provides industrialized countries with an incentive to invest in emission reduction projects in developing countries to achieve a reduction in CO₂ emissions at lowest cost that also promotes sustainable development in the host country. SPV lanterns and solar home lighting systems could be of interest under the CDM because they directly displace greenhouse gas emissions while contributing to sustainable rural development. However, only two SPV projects have been submitted under the CDM so far. This study assesses the maximum theoretical as well as the realistically achievable CDM potential of SPV lanterns and solar home lighting systems in India. The SPV lantern project is financially viable at a certified emissions reductions (CER) price of 34 € whereas the solar home lighting project is financially viable at a CER price of 46 €. While the maximum mitigation volume is about 35 million tonne CO₂ on an annual basis, an estimate of achievable CER levels is done using the past diffusion trends of SPV systems. We find that annual CER volumes could reach 0.8 to 2.4 million by 2012 and 5.6 to 13.6 million by 2020. This would require that the government sets the subsidy level for SPV lighting systems at a level that allows them to become viable with the CER revenue. From a macro-economic point of view this makes sense if the sustainability benefits are deemed sufficiently high to warrant promotion of this type of project.