overview of carbon pricing policies and pmr support to...
TRANSCRIPT
Asia LEDS Forum 2016 Hanoi, Vietnam June 28, 2016
Taisei Matsuki PMR Secretariat
Overview of Carbon Pricing Policies and PMR Support to Countries in Southeast Asia
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Overview of Carbon Pricing
PMR Efforts to Promote and Enable Carbon Pricing
Country Cases
Vietnam PMR Project
Thailand PMR Project
Content
Growing consensus among governments and businesses on the fundamental role of carbon pricing in the transition to a decarbonized economy.
Broadly revenue neutral or require expenditure
Implicit GHG pricing (e.g. feed in tariffs, vehicle efficiency standards)
Reduce government expenditure
Fossil-fuel subsidy removal
Potential to raise government revenue
Explicit GHG pricing (e.g. cap and trade, taxes)
Carbon Pricing and its Instruments
Reasons for introducing GHG Pricing Instruments
Source: OECD (2013)
A cost-effective way for reducing emissions at scale
Explicit GHG pricing instruments can help achieve other policy objectives
A way to raise revenues
A way to encourage long-run innovation
Source: Vivid Economics (2012)
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Carbon pricing initiatives almost doubled since 2012, jumping from
20 to 38
Growing global GHG Emissions Being Priced
(Source: State and Trends of Carbon Pricing 2015)
Expansion of national and subnational jurisdictions putting a price on carbon
(Source: State and Trends of Carbon Pricing 2015)
Challenges and Lessons Learned
Pricing GHG emissions can have a disproportionate impact on low income households
There are significant political challenges related to competitiveness and carbon leakage
Policy interactions and coordination are critical to avoid overlapping and uncoordinated efforts
Building readiness for GHG pricing takes time and effort
Data on current and projected emissions
Technical infrastructure for Monitoring Reporting and Verification of emissions
Legal rules and procedures for implementation
Most of these challenges can be overcome through well designed instruments and complementarity of other policies
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Overview of Carbon Pricing
PMR Efforts to Promote and Enable Carbon Pricing
Country Cases
Vietnam PMR Project
Thailand PMR Project
Content
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Validating the need for
carbon pricing
Building capacity for and piloting
carbon pricing
Scaling up carbon pricing efforts
Enabling connectivit
y among carbon
markets
World Bank Group (WBG) Efforts to Promote and Enable Carbon Pricing
Partnership for Market Readiness
The PMR provides support to countries to design and implement a range of climate change mitigation policies and cost-effective measures – including carbon pricing instruments – in order to scale up GHG mitigation.
Supported activities
Provide grant funding to improving technical and institutional
“readiness”, including work on GHG registries; Monitoring,
Reporting and Verification (MRV) systems, data collection and
management tools, and regulatory frameworks
Support piloting and testing of innovative market instruments
(e.g., emissions trading schemes (ETS), carbon tax and new
crediting mechanisms)
Provide a platform for technical discussions and knowledge
creation, country-to-country exchanges, and collective
innovation on new market instruments
Support countries’ efforts to determine post-2020 mitigation
scenarios and identify packages of effective and cost-efficient
policies to achieve climate change mitigation.
Share lessons learned & best practices with the International
community
Participation
Participants include:
▬ 19 developing countries/emerging
economies & 13 countries that
donate financially
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Supporting Countries in Developing Compatible Domestic Market Approaches
The PMR facilitates the choice, design or implementation of a number of policy instruments. Scope of the PMR has also evolved over time, now focuses on
1. Emissions Trading Schemes
2. Carbon Taxes
3. Scaled-up Crediting
4. Offsets
Readiness Implementation
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Overview of Carbon Pricing
PMR Efforts to Promote and Enable Carbon Pricing
Country Cases
Vietnam PMR Project
Thailand PMR Project
Content
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Vietnam PMR: Objectives and Focus
Overall Objective: to strengthen the Government of Vietnam’s capacity to develop market-based instruments to reduce greenhouse gas emissions.
Specific Objectives:
Strengthening capacity for developing carbon pricing approaches through supporting priority building blocks for MBIs ;
Readiness to pilot selected market-based instruments; Program management and stakeholder engagement
facilitation
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Assessing the overall institutional, policy, and technical gaps and opportunities for designing and implementing carbon pricing approaches in Vietnam.
Development of the main building blocks for recommended market-based carbon pricing approaches at the national level, with focus on the data collection, MRV-related components and the crediting process.
Component 1. Strengthening capacity for developing carbon pricing approaches
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Component 2a. Developing market-based instrument pilot in steel sector
Designing and developing data collection and data management systems and MRV in steel sector;
Developing a credited NAMA for steel sector;
Developing an action plan for mid- to long-term market-based carbon pricing approach in the steel industry (including participation in a potential domestic Emissions Trading Scheme); and
Capacity building for stakeholders involved in the implementation of MBI(s) in the steel industry.
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Component 2a. Developing market-based instrument pilot in steel sector
Activities for MBIs in Steel Sector in Vietnam
1. 2016 – 2019: The core elements of a NAMA will be designed in coordination with other Development Partners’ initiative;
2. 2019 onwords:
- Implementation of a pilot crediting NAMA and preparation for the next stage;
- Application of MBI(s) (such as cap-and-trade system if applicable) for the steel sector.
NAMA Piloting Pilot NAMA
Implementation Application of
MBI
2016-2019 2019 onword
(Based on Vietnam’s Final Market Readiness Proposal, MONRE,2014)
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Developing a GHG emissions data collection and management system and relevant reporting forms, as well as a MRV protocol for the targeted sub-sectors of the solid waste sector;
Defining the targeted sub-sector(s) and the choice of the crediting instrument and defining the outline of the crediting components for a crediting NAMA;
Designing a concept for a representative piloting activities for the crediting NAMA in the solid waste sector to test data collection and management system and the outlined approaches for the crediting components of the credited NAMA ; and
Developing an action plan for mid- to long-term market-based carbon pricing approaches in the solid waste sector (including participation in a domestic ETS, e.g., through offsetting)
Component 2b. Design of no-regret measures in solid waste sector with analysis of potential MBIs
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1. 2016-2019: Design of no-regret measures in solid waste sector with analysis of potential MBIs & strengthening of the capacity in the collection of reliable data.
2. 2019 onwards
- Development of credited NAMA for the sector if the GOV decides
- Nationwide application of selected MBIs.
Data mgt. & reporting Identify appropriate MBIs
Development of credited NAMA
Application of MBIs
Capacity building to facilitate NAMA implementation and data management
2016 2019 2019 onward
Component 2b. Design of no-regret measures in solid waste sector with analysis of potential MBIs
(Based on Vietnam’s Final Market Readiness Proposal, MONRE,2014)
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Communication Strategy
Identify key stakeholders
Identify the key private sector and/or associations that may be affected by a new market instruments
Identify public audience
Develop main message to communicate
Governmental agencies & International Organizations
Private sectors & NGOs
Public & Communities
Overall messages to all stakeholders
3. Program Management and Stakeholder Engagement Facilitation
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Overview of Carbon Pricing
PMR Efforts to Promote and Enable Carbon Pricing
Country Cases
Vietnam PMR Project
Thailand PMR Project
Content
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To design and initially implement a domestic market mechanism to reduce energy consumption and GHG emissions in energy sector with a view to transform to ETS in the future.
Phase I – Preparation for a demonstration of the Energy Performance Certificate Scheme (EPC) including supporting infrastructure, such as database and MRV system and a study on legal framework for the ETS.
Phase II – Demonstration of the EPC scheme.
To promote and support municipalities and local communities to implement GHG mitigation actions while achieving sustainable development and low carbon society goals through domestic market mechanism.
Phase I – Preparation of the Low Carbon City Program (LCC) and Low Carbon City Program Fund (LCC Fund).
Phase II – Implementation of the LCC program.
Thailand PMR Objective
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Vision Toward ETS and Low Carbon Society
(Based on Thailand’s Final Market Readiness Proposal, TGO,2013)
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1. ETS Market Readiness Preparation
Study on legal framework
EPC Preparation – EPC focuses on energy intensive industrial units and commercial buildings.
- Verify and improve quality of energy consumption data (and GHG emission data) for targeted designated factories and buildings
- Build data collection and management tools
- Strengthen MRV system
- Capacity building for PREs* & verifiers
- Legal framework
- Study on incentives for voluntary participation to EPC and source of fund
Thailand PMR Project’s Focus
* PRE – Personnel Responsible for Energy
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2. Low Carbon City Preparation using domestic crediting mechanism
LCC Preparation
- Study on potential GHG emission reduction from LCC program
- Prepare guidelines for the development of local GHG abatement plan
- Development of the local GHG abatement action plans
LCC Fund Preparation
- Study on pricing for LCC-TVERs and incentives for LCC-TVERs buyers and philanthropists
Thailand PMR Project’s Focus (continued)
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FOR MORE INFORMATION ON THE PARTNERSHIP FOR MARKET READINESS (PMR), PLEASE CONTACT:
TAISEI MATSUKI
WWW.THEPMR.ORG
Thank You