Concept note on the challenges and opportunities for standardization and simplification in the context of the transport sector

Transcription

1 CLEAN DEVELOPMENT MECHANISM CDM-EB72-AA-A09 Concept note on the challenges and opportunities for standardization and simplification in the context of the transport sector

2 TABLE OF CONTENTS Page 1. PROCEDURAL BACKGROUND PURPOSE KEY CHALLENGES AND PROPOSED SOLUTIONS IMPACTS PROPOSED WORK AND TIMELINES BUDGET AND COSTS RECOMMENDATIONS TO THE BOARD of 7

3 1. Procedural background 1. The Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol (CMP), at its sixth session, decided that Parties, project participants, as well as international industry organizations or admitted observer organizations through the host country s designated national authority (DNA), may submit proposals for standardized baselines applicable to new or existing methodologies, for consideration by the Executive Board of the clean development mechanism (hereinafter referred to as the Board). 2. In this context, the Board, at its sixty-second meeting, adopted the Guidelines for the establishment of sector specific standardized baselines (the SB guidelines) and at its sixty-fifth meeting, agreed to the Work programme on standardized baselines, which included the element of expansion of the SB guidelines to CDM projects in the transport sector. 3. In response to the mandate given by the Board to the secretariat on the expansion of the SB guidelines to CDM projects in, the secretariat conducted an elaborate analysis of approaches to the standardization of baseline setting in the transport sector, hired a consultant and scrutinized the report developed by the consultant, and conducted consultations on the report and approaches to standardization with external experts, the Methodologies Panel (MP) and Small-Scale Working Group (SSC-WG). After the elaborate analysis and extensive consultations, the secretariat came to the conclusion that there are fundamental limits to the standardization of baseline setting in and described these challenges in a concept note presented to the Board at its sixty-ninth meeting. 4. At its sixty-ninth meeting, the Board considered the aforesaid concept note on the challenges and options for work on the development of guidelines on standardized baselines for, provided feedback and requested the secretariat to submit a concept note for the Board's consideration at a future meeting, with a detailed analysis of the following elements: (c) Background information and rationale for the key challenges for standardized baselines for transport sector projects, as presented in the concept note as per annex 12 to the annotated agenda of the sixty-ninth meeting of the Board; Rationale for the options suggested on standardization and scaling-up of CDM in ; Benefits of and efforts required for the options suggested. 2. Purpose 5. The purpose of this concept note is to fulfil the request of the Board by: Providing more detailed background information and in-depth explanation of the nature of the challenges faced when the concept of standardized baselines is attempted to be applied in the context of CDM projects in ; 3 of 7

4 Presenting options for exploring opportunities for standardization and simplification as well as providing the rationale for the suggested options on standardization and scaling-up of the CDM in ; (c) Describing the benefits of and efforts required for the implementation of the suggested options. 3. Key challenges and proposed solutions 6. After an elaborate analysis conducted by the secretariat on approaches to the standardization of baseline setting in transport, hiring a consultant and scrutinizing and conducting consultations with external experts from international organizations and the Small-Scale Working Group and Methodologies Panel on the consultancy report, the secretariat came to the conclusion that the key challenge to standardization in the transport sector is posed by the fact that the standardized baseline cannot be established in advance for most of the measures without knowing the level of service and boundary of the CDM project activity for which the baseline is set. 7. The level of service, which can be defined as service of moving a volume of cargo or number of passengers over a distance, is difficult to be standardized in transportation projects, as it differs from situation to situation even with a similar distance covered and the same number of passengers/goods transported. Unlike any other sector, where level of service is the goods manufactured which can substitute for each other in the market, the level of service of transporting passengers/goods from point A to point B cannot be compared or substituted with the service of transporting passengers/goods from point C to point D. This is because in, emissions are very specific to a geographical area and significantly influenced by local conditions in that area. This aspect poses the key challenge in developing standardized baselines for transportation projects, because unlike in the context of individual CDM project activities, for which baselines are established based on data collected within the boundary of the planned project activity, in the context of standardized baselines the baseline is required to be established without knowing a project activity and its project boundary. The challenges to establishing standardized baselines are further substantiated in the following paragraphs, which should be understood in the context of the key challenge discussed above: There are many factors that influence emissions from transport, such as the level of economic development and intensity of economic activities, population size and population density, availability and state of transport infrastructure and driving conditions, climate and topography. As a result, the carbon intensity of transport-related emissions can (and often does) profoundly differ, not only within one country, but also within a relatively well delineated area, such as a city, due to a unique combination and interplay of the above-mentioned factors (e.g. high population density vs. low population density, congested driving vs. freeway driving, hilly terrain vs. flat terrain, high levels of economic activity with high levels of passenger demand and demand for cargo transport vs. loosely populated residential areas having only a few small shops). As a consequence, it is hardly possible to predict up-front the level of emission intensity that a certain combination and interplay of these factors would result in; 4 of 7

5 The level of emission intensity changes depending on how the boundaries for data collection are set. For example, the emission intensity of passenger transport in a city centre with well-developed public transport experiencing high passenger demand and, as a result, having high occupancy rates would significantly differ from the emission intensity of passenger transport in a suburban area with predominantly individual transport with low occupancy rates. If a boundary is set in such a way that it covers both the city centre and suburban areas (for example, for a project activity to develop a public transit system that connects suburban areas with the city centre), the emission intensity within the boundary would differ when comparing the emission intensity of passenger transport in the city centre and that in the suburban area. 8. All these reasons point to the fact that without knowing the level of service delivered by a CDM project activity and boundary of project activity, it is hardly possible to say whether a standardized baseline truly represents the project activity. This means that for the purpose of developing standardized baselines, one has to disaggregate the sector to a level (e.g. in terms of geographical boundaries, types of vehicles, services delivered) at which the standardized baseline truly represents the project activity by standardizing the local conditions associated with the project activity. But then the benefits of standardization and scaling-up are lost, and there remains no rationale for the development of standardized baselines against the development of project-specific CDM methodologies. 9. In order to address the challenges, the proposed solutions are discussed below. Two solutions are primarily discussed: one is to explore opportunities to simplify the existing CDM methodologies in the context of programmes of activities (PoAs); the second is to explore establishing standardized baselines for specific measures that require parameters (including level of service) that can reasonably represent the project-specific context to set the baseline: The complexity of baseline setting in is appropriately tackled in the context of approved CDM methodologies wherein the proposed CDM project activity defines the boundary for collecting data necessary for the baseline setting, which allows establishing a conservative baseline appropriate for that particular proposed CDM project activity. In this context, it is possible to extend the application of methodologies to PoAs which contain component project activities (CPAs) that deliver the same level of service as delivered in the baseline. For example, there are a number of CPAs implemented covering different modes of transport with lower emission intensities providing the same level of service to a passenger (e.g. distance travelled from point A to B). These CPAs can calculate baseline emissions by using a standardized baseline emission factor (gco 2 /km-passenger) multiplied by the level of service delivered under project; At the same time, bearing in mind the benefits that standardization may bring about, the secretariat still wishes to continue exploring opportunities for standardization in the context of standardized baselines focusing efforts on developing guidelines for establishing standardized baselines for specific measures that require parameters (including level of service) that can reasonably represent the project-specific context to set the baseline. One possible approach for defining guidelines for standardized baselines for transport sector projects 5 of 7

6 could be the following, provided that it is further analysed and the modalities are clearly set: (i) (ii) (iii) (iv) Categorize different modes of transport and transportation services provided in the country or region. For example, the categories could be road transport for passengers, road transport for cargo, rail transport for passengers, rail transport for cargo. Define different sub-categories of each mode of transport. One sub-category includes vehicle types under one category, another sub-category is defined for conditions of transport such as flat terrain, mountainous terrain, city driving, highway driving. Further sub-categories can be defined for different fuels that can be used under different transportation vehicles; Based on the data available from design, pilot testing or other credible sources, define emission factors (e.g. in unit kg CO 2 /passenger/km) for each applicable combination of category and sub-category. These emission factors are defined under a common matrix; These emission factors will serve as baseline emission factors for the vehicles/modes that have been replaced under the CDM project; The projects that can qualify to use such standardized emission factors are those involving a switch of transport mode/vehicle from one type to another that is less-carbon intensive due to an energy-efficient design or cleaner fuel. These projects can choose the baseline emission factors from the common matrix for their historical mode/vehicle of transport. The project emissions shall be monitored based on the actual performance of project. 10. To fulfil the tasks described above, including simplification of CDM methodologies in the context of PoAs and developing guidelines for standardized baselines for specific measures under, the secretariat would need to assign manpower and monetary resources to test the developed approaches and conduct consultations with the Methodologies Panel, Small-Scale Working Group and external stakeholders and project developers. 4. Impacts 11. The mandate from the Board will help the secretariat to focus its work on certain project types of transport sector where standardization and simplification is feasible to implement. 5. Proposed work and timelines 12. According to the approved CDM two-year business plan and management plan , the work will be performed from the first quarter of 2013 to the third quarter of Based on approval of mandate by the Board, as requested, first draft of the guidelines for the standardised baselines will be developed and presented for the consideration of seventy-third meeting of the Board, and final draft of guidelines and work programme for implementation of guidelines will be presented for the consideration and approval of seventy-fourth meeting of the Board. 6 of 7

7 6. Budget and costs 13. There will be professional and general service staff costs, transportation-related data purchase costs, and consultations with the Methodologies Panel and Small-Scale Working Group. The total cost will be less than USD 50,000, which does not include the cost of consultancy already paid. 7. Recommendations to the Board 14. It is recommended that the Board provide the following mandate to the secretariat: Simplification of CDM methodologies in the context of PoAs; Developing guidelines for standardized baselines for specific measures under the transport sector Document information Version Date Description February 2013 Revised as an annex to the annotated agenda of EB August 2012 Initial publication as an annex to the annotated agenda of EB 69. Decision Class: Regulatory Document Type: Information note Business Function: Methodology Keywords: Standardized baselines, transport sector 7 of 7