TWN Info Service on Climate Change (Oct12/02)
3 October 2012
Third World Network

Respect diversity and nationally-driven approach to developing country mitigation – workshop told

Kuala Lumpur, 3 October, (Fauwaz Abdul Aziz) – A workshop of the Ad Hoc Working Group on Long-Term Cooperative Action under the UN Framework Convention on Climate Change (AWG-LCA) saw developing countries stress that in relation to their nationally appropriate mitigation actions (NAMA), Parties must respect their diversity and ensure flexibility so as to reflect the varying circumstances and challenges they face in addressing climate change.

Insisting on the matter as an issue of great importance, Brazil questioned efforts towards standardisation, having guidance, handbooks, templates and even suggestions for a “pilot standardisation format” that indicated moves towards a direction and model that ran contrary to the concept of diversity associated with NAMAs.

This was among the main issues highlighted in the AWG-LCA workshop held in Bangkok on 2 September during the inter-sessional meeting of the United Nations Framework Convention on Climate Change (UNFCCC) on 30 August to 5 September. The workshop was held to further the understanding of the diversity of NAMAs by developing country Parties, their underlying assumptions, and the support needed for implementation of these actions.

Dr. Gary Theseira (Malaysia) facilitated the workshop and provided an informal summary of the substantive issues raised by the participants (see below). The workshop was held in two parts - Panel 1 addressed the” Underlying assumptions and methodologies, sectors and gases covered, Global Warming Potentials (GWP) values used and estimated mitigation outcomes and Panel 2 was on “Support needs”.

Presentations were made by Australia, the European Union, Indonesia, Japan, Maldives, Mali, Mexico, the Philippines, South Africa, and Uruguay. Brazil intervened from the floor after the presentations by the first panel.

The workshop’s first panel moderator was John Christensen of the United Nations Environment Programme (UNEP) who asked presenters to address the following questions: (i) what the main methodological challenges are that need to be addressed for the preparation and implementation of NAMAs, (ii) the main gaps of information on NAMAs communicated to the UNFCCC, and (iii) what the UNFCCC could do to address those gaps of information.

South Africa said that among the first assumption to be considered while preparing NAMAs was the respect for diversity, that NAMAs should be nationally appropriate, and that developing countries should be held to their commitment to the action, but not to the outcome. While developing countries can report on estimates of mitigation outcome, it is important to remember that the negotiations from Copenhagen to Cancun to Durban, the commitment of developing countries is to implement actions, said South Africa. Another assumption is that NAMAs should involve working with country experts and should include development indicators of implementation, such as the gigawatts of renewables built which are committed to if South Africa were to receive funding, rather than the CO2 tons equivalent that are avoided.

As to the methodological challenges, South Africa said it is important to bear in mind the issue should be about flexibility, not an attempt to develop a rigid template, and that the indicators of such work should be broader and include, but not be limited to, greenhouse gas emission outcomes.

Maldives, similarly, also said since NAMAs are nationally appropriate actions for climate mitigation, they have to be carried out in the context of the traditional and cultural norms and current situation of the country concerned. It should be in the context of the country’s sustainable development plans, sectoral plans, although ultimately measurable, reportable and verifiable (MRV), though efforts to fulfil the last criteria have faced considerable challenges in the past.

While many have suggested the use of CDM (Clean Development Mechanism) methodologies to apply to NAMAs, Maldives noted that CDM methodologies had in the past years been mostly “project-centric” and complicated with long and costly processes.

Indonesia noted at the outset its distinction as a country made up of more than 300 islands spanning 2 million square kilometres, with a bio-physical diversity that combines with a population of 200 population that is expected by 2013 to reach 300 million, under a decentralised governance that includes 33 provincial governments and 400 district authorities.

On methodological challenges for the preparation and implementation of its potential mitigation actions, Indonesia cited the establishment of business-as-usual as a basis for national mitigation action, how to select effective and efficient mitigation action, how to establish effective and efficient financial schemes such as public-private arrangements and how to use market- and non-market approaches in the mitigation actions.

If you treat it more practically, what does it mean for the sub-national in terms of how you prove the concept of mitigation action, asked Indonesia. It asked the following questions - how do we increase willingness for climate change targets at the sub-national level; how does international support come into Indonesia’s framework for action; how to find a robust, cost-effective and reliable methodology, institutional and human resource capacity, and technology and data, and so on?; and how to address the unfinished work in defining NAMAs and related technical refinements that often lead to difficulties in translation into domestic mitigation action that involve government processes at national and sub-national levels?

In addition to the lack of national capacity in integrating NAMAs into the broader spectrum of national objectives and development, there is also the need to obtain an agreed timeframe with the UNFCCC process that matches the national plan, said Indonesia. The lack of data reliability and the lack of a focused methodology would lead to unsatisfactory target achievement, it added further.

Mexico, in its presentation, stressed that the creation of one or several NAMAs should be embedded into the wider policy concepts and national pledges or obligations of the developing country concerned. Just as Mexico in 2009 launched a special programme for climate change that included a long-term vision stating that the country should strive to reduce its emissions. It also submitted a pledge to reduce emissions by 30% from business-as-usual, while some NAMAs were conceived and a general law on climate change was passed unanimously in the country’s national legislature and signed into effect in June 2012.

As part of forming the assumptions underlying its NAMAs, Mexico said the question of budget for the design of the studies for the NAMA, and whether there are any donors willing to step in to help, should be posed. The existence and availability of the technology to get the NAMAs being created should also be addressed, as well as whether there is sectoral commitment and involvement of the private and/or public sectors and other major stakeholders that are going to be part of the NAMAs.

Further assumptions to be considered involve whether sufficient funding will be available to pilot the NAMA, the creation of measuring, reporting and verification (MRV) technologies and methodologies, and whether funding will be available. For crediting NAMAs, a strong and stable market demand will support the existence of the NAMA.

According to Mexico, among the main methodological challenges that need to be addressed includes sectors and policies that are currently not covered by CDM methodologies. New solid and credible methodologies need to be developed, and funding for it must be readily available, and in order to have credible and accountable methodologies, a national certifying body will be necessary or strengthened. Solid baselines for the sector-approaches need to be done. To eliminate barriers to NAMA, considerable economic and political effort needs to be undertaken as solid and technical and accurate verification of a NAMA reduction may impose high costs.

Japan expressed sympathy with what it interpreted was the fear or anxiety of certain countries over the failure of their implementation of NAMAs. The purpose of MRV is not to punish, but to serve as a tool for processes with which countries can keep themselves on the right track towards addressing climate change. In terms of knowledge, it is not always possible to avail of data in the best quality. In the context of developing countries, many data sets are often missing, so that we sometimes rely on the sets of default values provided by the Intergovernmental Panel on Climate Change or other times import some certain likely figures from neighbouring countries as applicable. This is not to investigate for the absolute accuracy but to conduct solid MRV and regularise such exercise in developing countries with domestic system.

Japan said there is need to solve issues such as “double accounting” between NAMAs and credits for offsets. Until 2020, it said there is need to actually try and think how we can secure the incentives for developing countries to be engaged in actions, including market mechanisms.

In its intervention, Brazil said the instruments developed under the AWG-LCA, such as the biennial updates, the International Consultation and Analysis (ICA) and the national communications, offer a significant amount of tools for recognising the diversity of NAMAs. The objective is respecting the diversity of these actions and it believed that having created these new instruments which, in the following years, will be beginning to be implemented, it did not see the need for additional processes under subsidiary bodies to achieve this.

Brazil also said the questions proposed for the workshop did not reflect the issue of diversity in the sense that there is a bit of prescriptiveness in the questions, such as the idea that there are assumptions that should be considered, that there are methodological challenges that need to be addressed, and that there are gaps of information that should be identified.

When dealing with NAMAs, Brazil said that we are completely in a non-format kind of world because in order to ensure a significant amount of NAMAs coming forward, it’s important that they be considered whether they are specific actions in projects, actions in a specific sector, multi-sector and this diversity has come through. The assumptions will be varied. The methodological challenges will be varied, and in this context, identifying gaps – which would be gaps in each case – will be impossible.

It does seem that we are speaking of issues such as standardisation, guidance, handbooks and templates. Even the proposed pilot standardisation format seems that we are moving away from the concept of diversity of NAMAs towards something that would try to establish this as a kind of a (standardised) model, said Brazil. On the issue of the CDM as relevant in the context, standardisation has to happen in the CDM because it is an offset mechanism. In order to generate an offset, there are certain guarantees around mitigation and the quantification of mitigation that is necessary. This is not the case in a NAMA.

The European Union agreed with the statements made regarding the diversity of NAMAs, and said there should be further work by countries over their development and transparency, and proposed that a subsidiary body be tasked next year to look at the requirements for NAMAs, to ensure certainty and transparency.

The United States also called for greater work to resolve the lack of clarity, including on assumptions related to an intensity value and GDP, what is meant by business-as-usual, what are the baseline gases, sectors, global warming potential, and so on. These were what are alluded to in the ‘gaps of information’ and for understanding better the baseline and what goes into the baseline.

The second part of the workshop saw Mr. Youba Sokona of the UN Economic Commission for Africa moderating on the issue of support for developing countries NAMA efforts.

The Philippines presented its national initiative on mitigation in the renewable energy sector, the need for international climate finance support for the payment of incremental energy development cost and to further scale up the share of renewables in its energy mix, improve efficiencies or optimise mitigation actions in other sectors such as transport.

Since the Philippines is highly vulnerable to extreme climate events, the incremental costs must take into account or factor-in possible unforeseen damages or shocks due to extreme events. The Philippines is also currently implementing country initiatives relevant to NAMAs, including strengthening its capacity to prepare and develop NAMAs, and that would include capacity for greenhouse gas inventories, formulation of NAMAs, low carbon development strategies, in the context of national development and the design of MRV systems. The Philippines’ NAMAs are carried out in the context of national development and to achieve sustainable development. If it is asked how much it needed and how much it can do, the Philippines said the question was how much developed countries are willing to do?

Mali said it is developing a green growth strategy focused on several sectors, suggesting a handbook for NAMA preparation, and regional workshops to provide guidance to countries developing their NAMAs. Mali’s emission is insignificant in terms of global emissions, but with the energy mix being 50-50 between hydro and fossil fuel, the country is spending about US$150 million in subsidies, which is becoming a problem.

In the last two years, Mali has embarked on a number of initiatives at the institutional and policy framework level, having a climate change policy strategy and action plan, an agency for sustainable development and environment protection, and finally a national climate fund. In terms of institutional policy support, it has been mainly through bilateral and multilateral channels, and the national climate fund was designed and operationalized through the UN system.

Mali is working on a green growth strategy, which would have an investment plan in about 7 sectors. It believes that support for the preparation and implementation of NAMAs in the case of Technology Needs Assessment would be helpful, with regional workshops to prepare and support NAMAs. On the Green Climate Fund, it was happy that it has started its work and hoped to have a readiness or preparedness programme as soon as it is available. The main obstacles, said Mali, is the need for an assessment of capability needs in terms of institutions, policy, and technical capacity, which are not there.

Uruguay, in stressing mitigation initiatives in the renewable energy sector, underscored the dual significance of oil and hydro power on its energy needs, rendering the country dependent not only on oil prices but also on precipitation.

It spoke of its low-current development strategy, its conduct of studies and activities on low-current development options with the support of the World Bank, and the collaboration with the Intra-American Development Bank to design the appropriate national institutional framework and arrangements needed for the identification, preparation and implementation of NAMAs. It is working on the design of a national registry of NAMAs, preparing documents for the recognition of NAMAs, seeking support for their preparation, and seeking support for implementation, under templates provided by the Secretariat to be sent to the UNFCCC that are to be included in the registry.

At this early stage of development of NAMAs, Uruguay said support is needed for raising awareness in the involved sectors, both NAMA developers and financiers and investors at the national level; for identification and preparation of the NAMAs; and for NAMA implementation by the identification and mobilisation of international financing and the associated national co-financing, including the involvement of the private sector.

The European Union said that there have been “sterile” debates on how to mobilise resources for climate finance to address the “big numbers” (in terms of the resources needed). There is need to look at the design and implementation of NAMAs at the individual country level, what plans and programmes are being formulated, and the nature of NAMAs and the sectors concerned. Scaling up support for implementation is obviously a crucial issue, it said, but the pace of implementation is not just about the pace of the delivery of international climate finance or support for technology transfer or capacity-building.

The justification for engaging in a NAMA could hardly rely solely on the availability of international financing to support it, the EU added further. There will be local economic benefits that such actions can generate. There are many issues over the national capacity to prepare and implement NAMAs it said that these are important. We need readiness activities in creating conducive investment frameworks to enhance implementation and to attract support, it said. A stronger monitoring and institutional set-up at a national level in developing countries can provide a greater clarity and give much greater justification for encouraging and attracting the financing of NAMAs, and this can work around a virtuous circle and strengthen itself.

An informal written summary of the workshop (dated 4 September) was provided by Theseira, the facilitator of the workshop, on the UNFCCC website. Some of the highlights of the summary are presented below.

As regards Panel 1 on the “Underlying assumptions and methodologies…”, the assumptions were that:
- NAMAs are nationally appropriate, diverse, developed in the context of national development objectives. They should contribute to national sustainable development and to global emission reductions;

- Finance, technology and capacity building support should be available for the preparation and implementation of NAMAs, including for the setting up of national MRV systems. Support could come from domestic or international and public or private sources;

- Developing county Parties have committed to implementing actions and not to their outcomes. In this context, Parties may use a range of indicators of implementation and sustainable development. Nonetheless Parties may also report on estimated mitigation outcomes.

On the “methodological challenges”, these included : lack of reliable data and easy access to it; development of national baseline scenarios as a basis for identifying mitigation actions; lack of resources and institutional and human capacity for the selection of mitigation actions, and their integration into broader national objectives and development plans; establishment of effective and efficient financial schemes; conduct of stakeholder consultations; definition of boundaries and addressing leakage; understanding and eliminating barriers to implement NAMAs; high costs envisaged in setting up robust MRV systems; and understanding the accuracy of business as usual scenarios. Parties therefore could initially focus on domestically developed methodologies, which are in line with broader internationally accepted guidelines.

In relation to Panel 2 on the “Support needs”: Collaboration among countries through bilateral and multilateral channels is on-going in support of the design and/or strengthening of national institutional frameworks for the identification, preparation and implementation of NAMAs; countries are using domestic resources to design and implement NAMAs but international support is needed; the registry (for NAMAs) could facilitate matching of NAMAs seeking support with support available. Modalities for facilitation of support through the registry would need to be operationalized; readiness activities and conducive investment frameworks will be crucial to enhance implementation; public finance for investment is limited, however it has potential to leverage private sector funding to the scale needed; absorptive capacity of countries should be considered when assessing financial needs for NAMAs.+