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Financial Mechanismsto address Climate Change
Arab Climate Resilient Initiative“Towards Sustainable Energy – Resources, Challenges & Opportunities”
Manama, Kingdom of Bahrain
Benoit Lebot UNDP Climate Change Advisor
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Venus Earth Mercure
Diameter 12 100 km 12 700 km 5 000 km
Distance to Sun 110 M km 150 M km 50 M km
Temperature 460 °C 15 °C 180 °C
Venus Earth
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-36 m
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The Mediterranean Today
Source: GoogleEarth
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The Mediterranean 15 000 years ago
-5 °C compared to today average temperatureSource: France 2 Malaterre
.
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http://hdr.undp.org
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2007 2050
Today World Average
South
4.2 tCO2eq/Cap
North16.1 tCO2eq/Cap
2050Target50%
Global Emissions
CO2/Cap/yearUNDP HDR Objective for 2050:
• In the north, - 80% in emissions
•In the south, - 20% in emissions
Arab States
9 tCO2eq/Cap
2020
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18%
1%
8%
14%
59%
World Greenhouse Gas Emissions
CH4
N2OF Gas
CO2
From Combustion
CO2
From LUCF
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67%3%
0%
10%
20%
CH4
N2O
CO2
From CombustionCO2
From LUCF
Greenhouse gas emissions in the Arab States
Source: CAIT WRI
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Source: IPCC AR4, Synthesis Report (shares are for 2004)
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All sectors and regions have the potential to contribute
Note: estimates don’t include non-technical options such as lifestyle changes
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1
2
3
4
Trend in Green House Gases
Low Carbon Path
Behavior & Waste
EfficiencyRenewable Energy
REDD & Sequestration
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Baseline Emissions 62 Gt
BLUE Map Emissions 14 Gt
Contribution of Technology Wedges
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We are not short of Financial Instruments to address Climate Change:
Sources International NationalPublicFinance
- Official Development Aid- Multilateral Funds (Global Environment Facility, GEF)
- Phase out subsidies on conventional energies- Tax rebates & Tax Credits- Subsidies on Clean Technologies- Low or zero interest rate for loans
PrivateFinance
-Carbon Finance (CDM, voluntary, REDD, ETS…) - Private Equity Funds- Green or White (Energy Efficiency) Certificates- Foundations
- Demand Side Management- New Insurance services- Tax Credit- Green municipal funds
PublicPolicies
- Tax on Financial transaction (Tobin)- Tax on Airline tickets- Global Tax on Carbon- IMF Special Drawing Rights- Wipe out exterior debts
- National Tax on Carbon- Energy Tax- Auctioning of GHG quotas- Feed-in Tariff for Renewable Energy
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Policies & barriers
Policies & barriers
GEF, ODAGEF, ODA
IncentivesIncentives
FiTs, taxes, loans, CDM
FiTs, taxes, loans, CDM
Carbon financeCarbon finance
PoAs, sectoral crediting
PoAs, sectoral crediting
Research, development , demonstration
Research, development , demonstration
Technology transfer
Technology transfer
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Rating, Labeling, Benchmarking apply to a large number of markets
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0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Per
cent
age
of M
arke
t
Low Carbon Footprint High Carbon Footprint
6 Steps to move towards a low carbon economy
2. Knowledge & understanding
B ECA D F G
3 .Rating & Benchmarking
R&
D4. Research & Development5. Set Standards6. DSM, $ incentives, CDM….
1. Set Right Price Signal $
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Key operational provisions for development from the Copenhagen
Accord:1. $30bn pledged by developed countries between 2010 & 2012 for mitigation and adaptation inclusive.• New and additional• Priority access for SIDS, LDCs, Africa.
2. 2020 Target : $100bn/year• “in the context of meaningful mitigation actions
and transparency”• Come from a wider variety of sources
3. Creation of Copenhagen Green Climate Fund (CGCF) as an operating entity of the financial mechanism• GEF no longer only operating entity• Support all main Bali Road Map areas
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Key operational provisions for development from the Copenhagen
Accord:4. Creation of a Technology Mechanism in support of mitigation and adaptation• Country-driven and based on national priorities
5. Establishment of a forestry mechanism around REDD+
6. Monitoring, Reporting & Verification (MRV) of actions and financial flows
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National Appropriate Mitigation Actions (NAMAs) may condition future financial mechanism
• Developing countries invited to develop low emission development strategies that include NAMAs
• Developed countries will provide financing, capacity building and technology for some NAMAs, although the means for deciding which is unclear
• Supported NAMAs will likely be internationally recorded in a registry, and their implementation monitored, reviewed, and verified (MRV)
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UNDP’s message to National Government: Let’s get ready for any future financial mechanism
• Green Fund will not be a silver bullet
• National coordination is essential for governments to access, coordinate, sequence & combine climate finance (e.g. MDCFs next slide)
• National Strategies can guide the flow of funds:=> National Communications to UNFCCC, TNA,
NAMA, NAPA, IF&F…
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Multi Donor Trust Fund as a national instrument Comparing 3 possible formats
1National MDTF
2UNDG MDTF
3UNDP TF
Government led Steering Committee with UN as Co-Chair
UN & Government co-chair the Steering Committee
In line with POPP
Who receives the funds
National Entities (for direct access);Part UN Orgs
Part UN Orgs (they can in turn pass resources to national entities)
UNDP (which can in turn passes resources to national entities)
Governance Structure
Government for resources passed-on to national Entities Part UN Org
Part UN Orgs receiving funds
UNDP
Donors 1+ 1+ 1+
Guidance during establishment
UNDP MDTF Office
UNDP MDTF Office
UNDP PB/ DRM
UNDP MDTF Office web-site: http://mdtf.undp.org/
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1National MDTF
2UNDG MDTF
3UNDP TF
Strategic Document
Government document
UN document UNDP document
Legal Documents
TORMOA (Gvt and AA)SAA (donors & AA)MOU (PUNO & AA)
TORSAA (donors & AA)MOU (PUNO & AA)
ProdocContr. agreement (donors & UNDP)
Indicative financial size (over 5 years)
> $100 million > $20 to $30 million
> $3 to $5 million
Multi Donor Trust Fund as a national instrument: Comparing 3 possible formats
UNDP MDTF Office web-site: http://mdtf.undp.org/
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As Climate Changes, Can We?
Kofi Annan, UN SGWednesday, November 8, 2006
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A