CDM for Local Governments : An innovative approach for

CDM for Local
Governments :
An innovative approach for
lake basin management
Adelina C. Santos-Borja
Chief, Research and Development
Team Leader, Carbonshed Project
Laguna Lake Development Authority
Philippines
Presented at the
CDM for Local Governments Session
Parallel Event to the
UN Climate Change Conference
Organized by ICLEI, Japan Office
Badung Room, Grand Hyatt Bali
Nusa Dua, Bali, Indonesia
10 December 2007
THE PHILIPPINE ARCHIPELAGO
THE LAGUNA DE BAY BASIN
1
THE LAGUNA DE BAY REGION
PROVINCES
Total no. of cities
= 14
Lakeshore municipalities
= 25
Non-lakeshore municipalities
= 22
Total no. of barangays
= 2,655
TOTAL AREA: 3880 km2 including the 900 km2 lake
2
Threats: impacts of economic development
Results: Pollution and sedimentation of the lake
PIONEERING INTERVENTIONS
Laguna de Bay
Institutional Strengthening and
Community Participation Project
(LISCOP)
(2004-2009)
Laguna de Bay
Community Carbon Finance Project
(Carbonshed Project)
(2004-2008)
3
61 LGUs
OBJECTIVES of LISCOP
1. Improve the environmental quality in
the Laguna de Bay basin by engaging
Local Government Units (LGUs) and
other stakeholders in implementing
environmental sub-projects.
2. Ensure that Laguna de Bay and its
watershed are managed effectively and in
a sustainable manner by strengthening
the capacity of institutions in
environmental governance.
Stakeholders
POLICYMAKERSAND
PLANNERS
• NEDA
• DBM
• DTI/BOI
• BFAR
• DA
• PRRC
• MMDA
Laguna
de Bay
Region
REGULATORS
•
•
•
•
•
DENR
LWUA
NWRB
HLURB
LLDA
INFRASTRUCTURE
DEVELOPERS
• DPWH
• LWUA/
LWD
• NHA
• PRA
• MWSS
R&D
INSTITUTIONS
NGOs
LGUs
• Provinces
• Municipalities
• Cities
• Barangays
Resource User Communities
- Industries
- Business
- Fisherfolks
- Communityrepresentatives
(committeeandcouncils)
- Managersof protected
areas
- Households
- Farmers
- Fishpen opeators
- UplandCommunities
COMPONENTS
COMPONENT I:
COMPONENT 2:
Co-Managed
Investments for
Watershed
Development
Strengthening
Institutions and
Instruments
US $ 5 Million (Php 260 million)
:
World Bank Loan
US $ 5 Million (Php 260 million)
US $ 2.2 Million (Php 113 million)
:
:
Dutch Gov’t Grant
GOP Counterpart
4
Laguna de Bay Watershed Environmental Action Planning (LEAP)
- basic framework is the
microwatershed
Measures
Laguna Lake Development Authority
Laguna de Bay Community Carbon Finance Project
(Carbonshed Project)
 Being implemented through a grant from the
Japan Trust Fund – Special Program on Climate Change
Initiatives which the World Bank administers
 Grant amount:US$358,450.00
 Duration: June 2004-June 2006, extended to
March 2008
 Buyers of Emission Reductions are the Community
Development Carbon Fund (CDCF) and the BioCarbon
Fund (BioCF) which are managed by the World Bank.
5
CARBONSHED PROJECT
OBJECTIVES:
 Build the capacity of LLDA as an intermediary
to enable small-scale environmental projects to
result in certifiable emission reductions (CERs).
 To implement carbon emission reducing
interventions, such as waste management and
erosion reduction in order to address priority
environmental issues: pollution and
sedimentation of the lake.
CARBONSHED PROJECT
OBJECTIVES:
 to
mitigate the emission of greenhouse gases
by engaging the cooperation and participation of
local government officials and communities with
the purpose of enhancing their capacities in
environmental governance and in getting
benefits from Carbon Finance, through the Clean
Development Mechanism (CDM) of the Kyoto
Protocol.
6
Working together: LISCOP and CARBONSHED PROJECT
Financing
Planning
LGUs, River
Councils
IBRD thru the
Department of
Finance
Participatory
Multi-stakeholder
LLDA
Technical Support
(Carbonshed Team
LEAP
PhP 250 million
($50M)
Characterization
Priority setting
Project Identification & Development
LGU 2
VERs
LGU 2
……..
LGU 3
LGU 3
24 microwatersheds
Projects (5 million-10 million PhP each)
in up to 24 microwatersheds
CDM-ELIGIBLE
CDMPROJECTS
Other LISCOP
projects
Private Sector Projects
Clean Development Mechanism (CDM)

Article 12 of the Kyoto Protocol

Assist developing countries to achieve
sustainable development

Assist developed countries to meet
commitments through projects in
developing countries
Laguna Lake Development Authority
7
How Carbon Credits are Formed
CO2
Emissions
BaU
CDM
Time
Laguna Lake Development Authority
Methane Avoidance
From an open dumpsite
(Business as Usual)
To a Materials Recovery Facility with
Composting (CDM project)
8
Methane Recovery through wastewater treatment
1,200 kg/yr
coconut area
7,900 kg/yr
coconut area
19 households
rice area
8,100 kg/yr
52 households
7 backyard piggeries
2 commercial piggeries
176 households
34 backyard piggeries
14 commercial piggeries
23 backyard piggeries
19 commercial piggeries
Carbon Sequestration through reforestation of
denuded areas in the lake’s watershed
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(1)
FS and due
diligence
(2) PDD documents
Methodological
Approval
(3) Approval by the
Designated National
Authority (DNA)
Public
Consultation
(4) Validation by the
Designated
Operational Entity
(DOE)
(5) Registration by the
CDM Executive Board
(EB)
(6) Implementation
Steps in Developing a CDM
Project
CDM website: http://cdm.unfccc.int/index.html
(7) Verification by the
DOE
(8) Issuance of VERs or
CERs (Upon verification and
approval of report by the EB)
(9) Transaction of ERs
SMALL-SCALE CDM PROJECTS IN LAGUNA DE BAY
BUNDLE 1: Avoidance of Methane Production from Biomass Decay
Through Composting-1 (CDM-SSC-PDD, Version 03 - in effect as of: 22
December 2006).
ER Treshold: Not more than 60 kilo tonnes tCO2-e
BUNDLE 2: Methane Recovery in Wastewater Treatment-1
(CDM-SSC-PDD, Version 02)
ER Treshold: Not more than 60 kilo tonnes tCO2-e
BUNDLE 3: Watershed Rehabilitation Project –1 (CDM-SSC-AR-PDD,
Version 02)
ER Treshold: Not more than 8 kilo tonnes tCO2-e
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CDM Sub-projects in the Laguna de Bay Watershed
CDM subprojects and CERs
11
Required Legal Agreements
1. Memorandum of Agreement between the Project Participant and
the LLDA for the Intent to Sell and Purchase Verified Emission
Reductions
Signing of the Memorandum of Agreement (cMoA)
between the LLDA and Municipal Mayors as witnessed by Dr. John MortonMorton -World Bank (5th
from left) and Cong. Baculio, Vice Chairman, Committee on Ecology, Philippine House of
Representatives (7th from left).
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2. Emission Reduction Purchase Agreement (ERPA): Conditions
To Sell and Purchase Verified Emission Reductions between the
LLDA and the World Bank.
30 June 2006
Laguna Lake Development Authority
3. sub-Emission Reduction Purchase Agreement:
ConditionsTo Sell and Purchase Verified Emission
Reductions between the LLDA and the project participant
Mayors of the town of Tanay and Pililla in the Province of Rizal
25 June 2007
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Capacity Building Activities
Marketing of Carbonshed Project
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Carbon Team’s Workshop on the Operations Manual
Seven Suites HotelHotel-Observatory, Antipolo City, February 7, 2006
Dr. John Morton, Task Team Leader from the
World Bank discussing the Operations Manual
The Carbon Finance Team
Proponent Workshop
Participants from fifteen (15) LGUs at
Vivere Suites, Alabang, Muntinlupa City,
February 99-10, 2006
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Training on CDM Project Monitoring
22 June 2007
Alumni Center, UP Diliman Campus
OTHER IMPORTANT COMPONENTS OF THE CARBONSHED
PROJECT
1. Greenhouse Gas Emission Inventory in the Laguna
de Bay Watershed
 Develop a map showing the location of major sources of
greenhouse gas emissions including agricultural, land use,
industrial, and waste management sources as well as
potential hazard areas, e.g. landslide/mudslide prone areas.
 Conduct baseline assessment of present, historical and
scenarios for future greenhouse gas emissions from the
above activities in each of the sub-watersheds of Laguna de
Bay consistent with international practices such as those
described by the IPCC.
 Incorporate data and analysis into LLDA’s watershed
modeling, GIS and Decision Support System (DSS).
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CO2 emissions from
AFOLU
>70 ktons
50 to70
30 to 50
10 to 30
-10 to 10
-30 to -50
-0 to -70
-70 to -90
-90 to -110
<-110 ktons
CO2-e from
WASTE Sector
>180 ktons
160 to 180
140 to 160
120 to 140
100 to 120
80 to 100
60 to 80
40 to 60
20 to 40
<20 ktons
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OTHER IMPORTANT COMPONENTS OF THE CARBONSHED
PROJECT
2. Development of a simplified CDM toolkit
 Baseline methodology spreadsheets
 Templates for PINs and PDDs
 Guidelines and step by step procedures
 Criteria and procedures for enhancing community benefits
 Monitoring protocols, including relevant forms and checklist
that can be used by the various levels of monitors
 Procedures and resources for updating the toolkit in
response to changing requirements under the Kyoto Protocol
Continuing and Next Steps:
 Signing of a sub-ERPA between the LGU and the individual
project participants
 Application for approval of the Designated National
Authority
 Validation by the Designated Operational Entity
 Registration of the bundled sub-projects by the CDMExecutive Board
 Training of Project Participants and LLDA staff on
monitoring Carbon Emission Reduction
 Emission Reduction delivery and payment of corresponding
revenue
Laguna Lake Development Authority
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BARRIERS AND CHALLENGES
CDM Project Development
•
Project financing
•
Bureaucratic red tape
•
High CDM transaction cost
•
Stringent CDM rules
•
Changing methodologies
•
DNA requirements – extensive documentation
•
Uncertainties beyond 2012
BARRIERS AND CHALLENGES
Politics
1. Divergence in priorities among local officials as influenced
by political party affiliation
2. Uncertainty in tenure of assigned project staff (political
appointees)
Preparedness to develop a CDM project
1. Lack of manpower
2. Insufficient technical know-how
3. Slow-learning curve – CDM rules
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OPPORTUNITIES
1. Awareness of LGUs and communities on global
warming and climate change
2. Call to Action to mitigate greenhouse gas
emissions
3. Capacity building both for the LLDA, LGUs and
communities
•
•
•
•
•
Understanding of CDM rules
Developing CDM projects with community participation
PDD preparation
Project implementation and monitoring
Carbon transaction
OPPORTUNITIES
4. Better environment in the Laguna de Bay Basin
through CDM
5. Political value for LGUs, “pogi points”
6. Additional revenues to make the financial
investment more attractive
7. Benefits of monitoring, better project
implementation, efficiency
8. Empowerment of communities
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LLDA Carbonshed Project Team
Laguna Lake Development Authority
Rizal Provincial Capitol Compound
Pasig City Philippines
Tel No. +63-2-637-7581
Email address: redd@llda.gov.ph
Website: www.llda.gov.ph
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