beyond offsetting: ambitious sbl as a national contribution to combat climate change malin ahlberg...
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Beyond offsetting:
Ambitious SBL as a national contribution to
combat climate change
Malin Ahlberg
„Designated Focal Point/Designated National Authority“
German Emissions Trading Authority
BMU Side-Event: “Building blocks for NAMA development”
02 June 2011, Barcelona
Background: Definition of SBL
CMP6 definition: baseline established for a Party or a group of
Parties to facilitate the calculation of emission reduction and
removals and/or the determination of additionality for clean
development mechanism project activities, while providing
assistance for assuring environmental integrity.
Types of standards
- With a standardized approach a baseline scenario could be established,
baseline emissions and/or the additionality could be determined.
- Different types of standards are possible:
- Emissions intensity benchmarks (t CO2 / t product)
- Technology /practice standards
- Default values
- Positive Lists
Standardized baselines may:
- Improve efficiency by reducing transaction costs, complexity and uncertainty for
project participants;
- Enhance transparency and objectivity and thus reduce inconsistency of decisions
on project registration;
- Facilitate access to the CDM;
- Reduce the overall transaction costs - especially if high numbers of projects are
developed using the same standardized approach;
- Promote the scaling-up of mitigation actions while ensuring environmental
integrity.
Furthermore, standardized baselines may:
... go beyond offsetting if the baseline is sufficiently ambitious.
- Emissions reductions below the defined baseline could be accounted for a
national appropriate mitigation action by the host country.
- CMP 6: “Decides that the application of the SBs shall be at the discretion
of the host countries DNA.”
- As far as the baseline is consistent with the past EB decisions the host
country may use the CDM as a policy instrument in order to promote the
implementation of climate protection projects.
Advantages of ambitious baselines
- SBL can allow host countries to better align the use of carbon financing with
wider public policy goals (e.g. energy policy).
- The development of SBL by the DNA could have a steering function, and
support the development of CDM projects in certain sectors.
- SBL will reduce the supply of CERs but at the same time it may increase the
number of projects and thus the price won’t necessarily be influenced.
- SBL is beneficial for PD since it reduces project implementation risks and
transaction costs.
I. Example: Default grid emission factor
- An advanced developed country could define an ambitious benchmark for
the grid emission factor (and define a technology positive list for additional
project activities.)
- Once such a standard for the baseline and additionality is approved by the
EB, PDs have a higher ex-ante certainty, the CDM procedures are more
streamlined (validation, LoA issuance etc.) and thus the transaction costs
decrease significantly.
- The financial flows from developed countries to developing countries could
be increased and moreover the host country can account for a certain
amount of emissions reductions to its national goal (no zero-sum game).
II. Example: Default grid emission factor
- Ambitious baseline is not appropriate for LDCs where a high degree of
suppressed demand exist.
- With SBL obstacle of lack of data for calculating the grid emissions factor can
be overcome by using benchmarks (eg. most efficient gas power generation).
- In low-income countries such a benchmark should reflect suppressed
demand (e.g. by defining the electricity demand per capita).
- Level of stringency: With a high level of stringency non-additional projects will
be weeded out, but fewer projects will be able to beat the performance
standard.
Which sectors should be prioritized?
Defining priority areas for the development of standardised baselines:
Definition of the system boundaries: Sector or single activity, country wide
or regional (comparability).
Identification of key performance indicators (t CO2e per product, heat or
fuel).
Data avalability
- Inhomogeneous sectors are more feasible for not credited NAMA where a
higher degree of uncertainty is acceptable (no offsetting in Annex I countries).
Examples for possible sectors/project types
In general it is highly dependent on the regional circumstances:
- Household consumption of heating and lightning
- Off-grid energy supply
- Certain transport project with clear system boundaries
- Agriculture
Conclusion
- Efforts to reduce GHG emissions by developed countries alone will not be
sufficient to reach 2°C objective. Also substantially enhanced NAMAs by
other Parties are required.
- This implies that commitments by developed countries need to be completed
by (advanced) developing countries.
- Additional international financing (to supported NAMAs) is needed to allow
developing countries to go beyond their own action and to promote the
transition towards a low-carbon economy.
Ambitious SBL can path the way to the new market-based mechanism.
