Supporting Countries to Transition to Low- Emission, Climate-Resilient Development (LECRD): UNDP Case Studies from South Africa and the region

Transcription

1 Supporting Countries to Transition to Low- Emission, Climate-Resilient Development (LECRD): UNDP Case Studies from South Africa and the region Lucas Black UNDP Regional Technical Advisor Climate Change Mitigation & Carbon Finance East & Southern Africa ICLEI Local Climate Change Solutions for Africa Conference 2011 February 28, 2011

2 Greenhouse gas concentrations are reaching alarming levels Atmospheric CO 2 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 Even if stabilization were to take place at 550ppm, there is: an 80% probability of exceeding 2ºC (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,

3 to avert major climate impacts we must reduce global emissions by 50% by 2050 CO 2 /Capita/year North 16.1 tco 2eq /Capita In the North 80% cut in emissions In the South 20% cut in emissions South 4.2 tco 2eq /Capita Today World Average 2050 target: 50% global emissions Source: UNDP Human Development Report, 2007/08 2

4 Although most of Africa s emissions come from land use, global warming is essentially an energy problem Anthropogenic Greenhouse Gas Emissions Waste 1,419 MtCO 2 e (3%) Industry: 1,866 MtCO 2 e (4%) International bunker fuels 959 MtCO 2 e (2%) LULUCF: 5,380 MtCO 2 e (12%) Agriculture, 6,075 MtCO 2 e (14%) Energy 28,407 MtCO 2 e (65%) 44,000 MtCO 2 e (44 billion tonnes) per year Source: WRI (2009); Baumert et al (2005); Houghton (2008) 3

5 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 4

6 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. 5

7 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 (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. 6

8 What is it Local actors are key, however sub-national and local governments are confronted with a number of constraints that limit their ability to make LECRD interventions Sub-national authorities (regions, provinces, states, cities and municipalities) have a key role to play in actively incorporating climate change considerations in day-to-day business and in introducing climate-friendly policies, regulations and investment decisions at their level, as a direct outreach to the public. Adaptation to climate change is very site-dependent, and local planning decisions will be critical to tailor almost every single adaptation action to the conditions in which it will take place. Similarly, 50% to 80% of GHG emissions are influenced by local behavior and investment choices UNDP has developed a number of knowledge platforms and services designed to specifically engage with sub-national authorities across the spectrum of LECRD. Go to 7

9 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 multistakeholder 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 or at the city level; engagement is with planning and financial policy makers. One example is joint work between Mckinsey & Co., DfID and UNDP Ethiopia (among others) to support Ethiopia s Climate Resilient Green Economy planning process. UNDP is also working with the City of Addis on several Carbon Finance (CDM) projects. 8

10 At every level, policy-makers will need to adopt a strategic approach I. IDENTIFY PRIORITY MITIGATION ACTIONS & STRATEGY II. DEFINE BARRIERS Market barriers Institutional barriers Social barriers Technical barriers IV. SELECT FUNDING OPTIONS III. SELECT APPROPRIATE MIX AND SEQUENCE OF SUPPORT POLICIES Public Funds Innovative finance Private Funds INTERNATIONAL NATIONAL & SUB- NATIONAL Capacity development and info-based instruments Regulations Tax-based mechanisms Early market-based development mechanisms Market-based mechanisms Source: UNDP, Engineering Investability (2010) and McKinsey, GHG Abatement Cost Curve (2009) 9

11 UNDP s institutional response to the emerging CC architecture Selected UNDP policy & program development services and financial mechanism - specific expertise (Facilities) UN-REDD MDG Carbon Facility Poverty and Environment Facility Communitybased Adaptation Green Commodities Facility Energy Access Facility Global Environment Trust Funds GEF Trust Fund Montreal Protocol Multilateral Fund SCCF, LDCF, Adaptation Fund Multi/bilateral funds WB: CIF, FCPF, CPF Japan CEP, Norway CFI, Germany ICI, Australia IFCI UN/UNDP E&E Trust Funds (TF) MDG Spanish Fund, E&E TF Foundations UNF, Packard, Gates, Rockefeller New UNFCC Related Funds REDD fund (s) Fast Start Funds (s) COP green climate fund (M/A, REDD, TT, CD) Technology mechanisms $6-9 billion $15 billion $ m $3 billion $80 billion $ Amounts available in developing countries ( ) To formulate, finance and implement MRVable low carbon and climate resilient strategies Territorial Approach CC Risk Financing Environmental Finance Facilities 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 ) Institutional & Corporate Finance Private equity funds Green bonds $ billion $ billion 10

12 Case Study: UNDP-GEF South Africa Wind Energy Project (SAWEP) Green Power funding and marketing in action at the local level Supported the successful implementation of a first-of-its-kind IPP demonstration project the 5.2 MW Darling wind farm. This project used a premium pricing model and entered into a 20 year Power Purchase Agreement (PPA) with the City of Cape Town, facilitated by a UNDP-established, GEF-funded USD.5m Green Power Guarantee Fund. 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 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. 11

13 Case Study: UNDP-GEF support for pioneering SSDG FiT Scheme in Mauritius Addressing both energy security and climate change at a grassroots level Prior to 2010, no framework existed which would allow small independent power producers to sell their production on the grid. The Maurice Ile Durable vision of the Government was to enable the population to produce their own electricity to achieve LT energy independence and contribute to the fight against climate change. An ambitious target of 35% electricity from renewable sources by 2025 has been established. With input from UNDP and support from GEF, the Ministry of Energy and Public Utilities together with the Central Electricity Board launched a Grid Code in December 2010 with a scheme for up to 200 SIPPs or 2 MW Key worthoutcomes: 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 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. 12

14 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 13

15 The battle against dangerous climate change is part of the fight for humanity. Winning that battle will require far-reaching changes at many levels in consumption, in how we produce and price energy, and in international cooperation. Above all, it will require far-reaching changes in how we think about our ecological interdependence, about social justice for the world s poor, and about the human rights and entitlements of future generations. -- UNDP Human Development Report 2007/2008 North Africa Robert Kelly Regional Technical Advisor, Climate Change Mitigation robert.kelly@undp.org Eastern & Southern Africa Lucas Black Regional Technical Advisor, Climate Change Mitigation lucas.black@undp.org West Africa Benoit Lebot Regional Technical Advisor, Climate Change Mitigation benoit.lebot@undp.org 14