International climate finance: Measures to adapt to climate ......International climate finance:...

© 2018. For information, contact Deloitte Tohmatsu Financial Advisory LLC.

International climate finance:

Measures to adapt to climate change and reduce

greenhouse gas emissions in the agriculture sector

of the Philippines

1

February 20-22, 2018

Bangkok, Thailand

© 2018. For information, contact Deloitte Tohmatsu Financial Advisory LLC.2

GHG emissions from agriculture in the Philippines

Climate change and agriculture

Rice cultivation in the

Philippines accounts for about

64% of emissions from the

agriculture sector, or 21% of the

total national emissions.

© 2018. For information, contact Deloitte Tohmatsu Financial Advisory LLC.3

Why CDM was not efficient to address GHG emissions in agriculture, especially in rice cultivation?

Climate change and agriculture

Involves too many

participants

for implementation

Involves large-scale

social change

CDM monitoring

is very complex


4

What is alternate wetting and drying (AWD)?

Alternate wetting and drying

AWD is a water management technology that uses a simple

tool to determine the right time to irrigate and the right amount

of water to apply;

The simple tool is a perforated 10 cm x 25 cm polyvinyl chloride

(PVC) tube that is inserted 15 cm to the ground during the dry

season and 20 cm during the wet season;

The AWD scheme is implemented at about 20 days after

transplanting or sowing for direct seeded rice;

When AWD is applied, the number of irrigation events in a

season ranges from 4-6 times only;


Adaptation and mitigation measures to adapt to climate change and reduce greenhouse gas emissions

in the agriculture sector of the Philippines

Program concept

Provision of financial incentives to rice farmers to encourage them to switch from continuous flooding to Alternate Wetting and Drying (AWD) practices.

Initially focused on an area of 110,000 hectares in the Upper Pampanga River Integrated Irrigation System (UPRIIS),

• Followed by Central Luzon (190,000 ha) and the MRIIS (90,000 ha).

• As additional resources are mobilized, the program can be scaled even further up to include other regions in the Philippines.

Expected Results:

• GHG emission reduction potential estimated at 23 million tons per year

• Increased food security

• Improved water management

• Resilient rice production

• Increase in irrigated areas

• Increase in rice yield

• Reduction of conflicts among farmers

http://www.undp.org/content/undp/en/home/librarypage/environment-energy/mdg-carbon/NAMAs/adaptation-and-mitigation-initiatives-in-philippine-rice-cultiva.html

http://www.undp.org/content/undp/en/home/librarypage/environment-energy/mdg-carbon/NAMAs/adaptation-and-mitigation-initiatives-in-philippine-rice-cultiva.html


Submission to the Transformative Carbon Asset Facility (TCAF) of the World Bank

Implementation Partners

United Nations Development Program

(UNDP)

• Sustainable Development Goal (SDG) impact

assessment

• Documenting best practice case studies for

possible policy level interventions and

dissemination – workshop, study tours etc.

• International exchange of experience and

facilitating replication in other potential

areas/regionally in other countries in the Asian

region

• Linking renewables to water management

(solar pumping etc.), even if not part of the

project yet, it might be an option if we can

identify a business case.

• Imparting skills for producing the PVC

equipment/enterprise development for potential

scale up through irrigation services

Deloitte Tohmatsu Financial Advisory LLC

• Joint program design and preparation of

documentation

• Seeking all necessary approvals and arrangement of

stakeholder consultation

• Support of the monitoring and verification of

mitigation outcomes

• Support to Climate Mundial in the preparation and

execution of the program financial model

Philippine Rice Research

Institute (PhilRice)

• Overall program implementation

and management

• Engagement of individual

farmers to participate in the

program

• Management of payments under

the ERPA

• Raise any other finance needed

for program implementation

Climate Mundial

• Advising PhilRice on the Emission Reduction Purchase

Agreement (ERPA)

• Preparation and execution of the program financial model

• Arrangement of carbon finance including carbon receivable

finance

• Arrangement of other finance for program implementation

• Joint program design and preparation of documentation

• Arrangement of on-going monitoring and verification of

mitigation outcomes




Interventions

Limiting the average global surface temperature increase

Promote climate smart agriculture in the Philippines

Align with national priorities on climate actions in

agricultural sector

• Financial incentives to rice farmers to encourage

them to practice AWD;

• Information dissemination campaigns and introducing

AWD as the “new” and “appropriate” way of irrigating

the rice crop or managing irrigation water at the

farmers’ field;

• Design and implement Training Programs and special

training manual for NIA/BSWM field officers;

• Regular knowledge updates (brush-up) seminars;

• Hotline service to provide field officers and farmers

constant support in implementing AWD;

• Develop database of issues encountered by farmers

and field officers to expedite smooth transformation;




GHG Emission Reductions

YearBaseline (tCO2e) Emissions (tCO2e) Emission Reductions

(tCO2e)Sector Region Sector Region

2020 59,141,072 13,624,223 58,546,990 13,030,141 594,082

2021 60,430,669 13,957,966 59,242,504 12,769,801 1,188,165

2022 61,747,348 14,298,718 59,965,100 12,516,471 1,782,248

2023 63,091,677 14,646,626 60,960,821 12,515,770 2,130,856

2024 64,464,237 15,001,840 61,984,772 12,522,375 2,479,464

2025 65,865,620 15,364,513 63,037,547 12,536,440 2,828,073

2026 67,296,433 15,734,802 64,119,752 12,558,121 3,176,681

Total14,179,569

The program will continue beyond the duration of TCAF support as practices will be entrenched by the end of

seven years. The emission reductions for the entire period, including the years 2027-2030, shall be as follows:

YearBaseline (tCO2e) Emissions (tCO2e) Emission Reductions

(tCO2e)Sector Region Sector Region

2027 68,757,293 16,112,868 65,232,003 12,587,578 3,525,290

2028 70,248,830 16,498,873 65,994,439 12,244,482 4,254,391

2029 71,771,690 16,892,984 66,788,198 11,909,491 4,983,492

2030 73,326,530 17,295,371 67,472,503 11,441,344 5,854,027

Total18,617,200


Simple and conservative GHG emissions MRV approach

Standardized baseline

Table 1. Specific emission factors for baseline, project and emission reductions (kgCH4/ha/season) for Dry Season

EFc

Baseline

Project Scenarios

ProjectEmission

Reduction

Factor (EFER)SFBL,w SFBL,p SFBL,o

Emission

Factor

(EFBL)

SFP,w SFP,p SFP,oEmission

Factor (EFP)

For regions where double cropping is

practiced171.40 1.00 1.00 2.88 493.63

Scenario 1: change the water regime from

continuously to intermittent flooded conditions

(single aeration)

0.60 1.00 2.88 296.18 197.45



(multiple aeration)

0.52 1.00 2.88 256.69 236.94

For regions where single cropping is

practiced171.40 1.00 0.68 1.70 198.14



(single aeration)

0.60 0.68 1.70 118.88 79.26



(multiple aeration)

0.52 0.68 1.70 103.03 95.11

Table 2. Specific emission factors for baseline, project and emission reductions (kgCH4/ha/season) for Wet Season

EFc

Baseline

Project Scenarios

ProjectEmission

Reduction

Factor (EFER)SFBL,w SFBL,p SFBL,o

Emission

Factor

(EFBL)

SFP,w SFP,p SFP,oEmission

Factor (EFP)

For regions where double cropping is

practiced297.42 1.00 1.00 2.88 856.56



(single aeration)

0.60 1.00 2.88 513.94 342.62



(multiple aeration)

0.52 1.00 2.88 445.41 411.15

For regions where single cropping is

practiced297.42 1.00 0.68 1.70 343.81



(single aeration)

0.60 0.68 1.70 206.29 137.53



(multiple aeration)

0.52 0.68 1.70 178.78 165.03


Real, measurable and verrifiable

SDG Impacts

SDGs Impacts

Increased food security through increase in total

irrigated areas and increase in yield

Increased resilience in rice production

Increased number of farmers having access to reliable

irrigation services

New jobs created

Decreased conflicts among farmers

Reduced GHG emissions

Promotes dissemination and diffusion of environmentally

sound technologies through international partnerships


Bridging the carbon markets gap and increasing NDC ambition

Financing proposal

Government of the Philippines TCAF

Program Implementation and Administration

Financial Incentive to Farmers

First-Loss Equity

ERPA

Pay

men

ts

37.5% 62.5%

USD

XX

per

to

nn

e

USD YY per tonne

USD ZZ per tonne


The DGTI Fund is a blended-finance mechanism providing performance based grants to de-risk

private capital and facilitate the rapid uptake of clean technologies

Another possible approach:

Direct Green Technology Incentive (DGTI) Fund


International climate finance:

Measures to adapt to climate change and reduce

greenhouse gas emissions in the agriculture sector of the

Philippines

13

Thank you!

Vladislav Arnaoudov

Manager

Deloitte Tohmatsu Financial Advisory LLC

3-3-1 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan

Tel: +818037116298

Email: [email protected]

© 2018. For information, contact Deloitte Tohmatsu Financial Advisory LLC.14 Measures to Adapt to Climate Change and Reduce Greenhouse Gas Emissions in the Agriculture Sector of the Philippines

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