Programmatic pCDM

1. Programmatic pCDM Definition: At COP11/MOP1, the Parties approved an additional type of projecteligibility, under the CDM – pCDM. A programmatic CDM project activity is an activity where the emission reductions are achieved by multiple actions executed over time as a result of a government measure or a private sector initiative. Potential: pCDM has the potential to enable a wider range of emission reductionsactivities under the CDM. It also serves as an incentive for the introduction of new policies and measures to accelerate the adoption of less GHG-intensive technologies.

2. Some remarks on COP/MOP1 decision • Lack of methodolgies - how to address such complicated issues such as leakage, baselines, double-counting and monitoring. For example programmatic activities could include activities that are implemented as a mandatory policy – then how could it be shown that these activities were additional? • COPMOP1 did not give a defn of ”project activities under a programme of activities”. An agreed ”upfront” defn could help project developers to avoid the time and expense associated with developing a project activity and methodology for a non-eligible project type i.e an upfront defn could increasethe efficiency of the CDM.

3. Some remarks for pCDM • pCDM is expected to reshape the landscape of CDM implementation by providing incentives for sector-wide transition to low-carbon society as well as increasing emission reduction through CDM. • Promotes sustainable development in developing countries as well as contributing to stabilization of concentration of GHG’s. • However, the lack of clarity on guidance and provisions is not desirable e.g.one Pcdm had been submitted(by June 2007).

4. Advantages of pCDM • pCDMsignificantly increases the representation of small projects in the CDM market. • pCDMcould help ”democratise” the CDM. EE improved technology does not typically occur on an individual basis but rather on large number of individual households and small industrial firms – thus CDM programmes open the benefits to many users. • Needs of small countries is catered for. Small countries could design CDM programmes that involve many small users.

5. Basis for pCDM 1. pCDM project activities during 2008-2012 C.P. operate within the constraints of the existing regulatory CDM framework to strenghten CDM in the short term without renegotiating the basic architecture of the KP. 2. Areas of promising project activities: EE, fuel switching and renewable energies particularly private for HH, small enterprises and transportation. 3. pCDM – project activities i.e. emission reduction are achieved not only by one single investment but rather by multiple actions executed over time.

6. Core characteritics of PA • Deliberate programme either by public sector (voluntary or mandatory) or private sector intiative. • Multitude of dispersed actions that occur as a result of program • GHG reductions do not necessarily occur at the same time • Type, size and timing of reductions emissions may not be known ex ante but should be verifable ex post. • While PA can be implemented by one or more entities, they have only one enacting agent to stimulate individual actions under the programme. • Programme activity is submitted for validation and registration as one single PDD.

7. Niche sectors for EE projects and pCDM Current Status:EE projects are under-represented in the CDM pipeline. Project developers could take advantage of the Pcdm and develop projects that could be accepted under the improved Pcdm CDM rules. Characteristics: • Suitable for small to medium-size units that are geographically dispersed • Large number of potential owners can participate in the programs for EE improvements • Number of committed owners can be unknown exante i.e at the onset • Owners can be rolled onto the EE programmes as the local situations evolves

8. Conceptual distribution of EE projects

9. pCDM vs Bundled CDM vs Stand-alone CDM • Bundled CDMis suitable for medium to large units or small units in large aggregation – but with a limited number of owners. • Number of committed owners is known at the start of the project and the addition of new participants is not allowed. • EE improvements activities occur more or less during a short period of time in different project sites. Stand-alone CDMis suitable for large units and large sites that generally belong to a single owner(majority of registered CDM projects belong to this category)

10. Examples of EE EE in Residential Sector: • Building design and orientation • High effieciency lighting and PV lighting • Solar thermal water heaters • Energy efficient stoves and solar and biomass stoves Due to large number of end-use units, number of participants is unknown at the start of the project – participants can join at any stage of the project. pCDM also accomodates new installations and appliances in different periods.

11. Examplesof EE EE in Commercial and Services Sector: Most technological improvements in this sector – similar to residential sector except that commercial improvements may be larger. Suitable technologies to improve end-use EE include: • renewable based small generation units • efficient fossil fuel-based cogeneration • energy storage options(e.g. fuel cells) in conjunnction with renewable energy generation Because of small capacities, high installation costs, dispersed- end uses - they suffer the same barriers as other small EE options

12. Examples of EE EE in industrial energy consumption including small renewable applications: IEA 2006 Energy Outlook – EE policies can reduce energy consumption in DC by 10 % in 2030(cf with BAU scenario). Heating and cooling examples: • Better insulation • more efficient heat exchange • improved steam and chilling energy uses and recovery EE in electrical equipment: • using variable speed motors, optimising use of KE(reducing friction and suction heads), reducing transmission and conversion losses of electricity delivery sysytems

13. Examples of EE EE in transportation sector: • measures promoting fuel switching by car owners • selection of fuel efficient vehicles • replacement of inefficient cars • encouraging use of public transport by individuals or by public or private entities EE in Agriculture sector: Because agric sector is dispersed and constituted primarily by small actors in developing countries, it is especially suitable for pCDM. EE Technological options: • water pumps and agricultural produce processors • agricultural vehicles and tractors (similar to transportation sector)

14. Generic Barriers to end-use EE Finance: Installation of EE equipment and appliances require additional funding esp. at initial stages Limited technological expertise: Industrial base in DCs does not have sufficient energy-efficient technological capacity i.e insufficient capacity for designing and manufacturing EE products Information barriers: Information gaps are present in all aspects of the markets e.g. consumers lack knowledge to purchase EE end-use equipment

15. Generic Barriers to end-use EE Dispersed end-use barriers: • widespread geographical locations • multiplicity of small end-users • differing technological and knowledge levels of end-uses these barriers make any attempt for control and command difficult.

16. Conclusion • While pCDM is allowed, there is a vacuum in the provision of appropriate methodological guidance for the submission of progmmatic project activities.