Financing Capacity Building and Improving Readiness for Climate Finance and International Carbon Markets Mr. Kai Uwe Barani Schmidt Senior Environment Specialist World Bank The What, Who and How of the Partnership for Market Readiness (PMR) 2 1
WHAT: PMR is a Grant-based, Global Partnership PMR provides funding for capacity building and a platform for piloting of marketbased instruments for greenhouse gas emission reductions PMR Objectives include: Provide grant funding for building market readiness capacity (e.g., GHG data management systems, tracking tools, baseline setting, institutional systems Design, pilot and test new market instruments (e.g., domestic emissions trading schemes and scaled-up crediting mechanisms) Provide a platform for technical discussions, South-South exchange, and collective innovation on new market instruments Create and share lessons learned and best practices 3 WHO: PMR Participants = Market Leaders PMR Participants and Observer countries represent a diverse, geographic swatch and include the major market players important to GHG mitigation Implementing Country Participants Brazil India South Africa Chile Indonesia Thailand China Jordan Turkey Colombia Mexico Ukraine Costa Rica Morocco Vietnam Australia Denmark European Commission Germany Japan Contributing Participants Netherlands Norway Switzerland United Kingdom United States Observer countries include Finland, France, Italy, New Zealand, South Korea, Spain, and Sweden 4 2
HOW: From Conception to Getting Ready to Pilot 15 Implementing Country Participants are exploring market instruments in order to scale up their mitigation actions Expression of Interest (EoI) Share initial thinking on using market instrument(s) to achieve mitigation Organizing Frameworks (OF) Preliminary assessment on market readiness Identify sectors/programs for PMR support Market Readiness Proposal (MRP): Roadmap and funding proposal Comprehensive analysis and assessment of readiness gaps Pre-feasibility study for a market instrument Timetable and estimated budget for implementation Implementation Phase Implementation of readiness components Design of market instrument Reaching pilot-ready status 5 Status of Action by Implementing Country Participants Within one year, all 15 have started substantive work 15 Implementing Country Participants have presented an Organizing Framework PA has allocated $350K to each All 15 are in various stages of preparing a Market Readiness Proposal(MRP); the PMR expects to see a first batch of draft MRPs by October 2012 Chile, China, Mexico and Costa Rica are expected to present their draft MRPs at the next meeting of the PMR Partnership Assembly in Australia 6 3
Overview of Selected Implementing Coutries PMR Activities 7 China Mitigation pledge under UFCCC: emission intensity target (base year 2005)= 40-45% China s 12-year plan Piloting national ETS National ETS design National registry Feasibility study of application of ETS to electricity sector Data/GHG accounting MRV Coverage (electricity sector) Institutional capacity 8 4
Chile Recent OECD member; aim to reach developed country status by 2020 Dynamic private sector & good governance Design ETS (setting point of obligation, coverage, allocations, offsets and linkage) Develop pilot ETS GHG goal: 20% below business as usual by 2020 support for use of market instruments to achieve GHG goal MRV and registry Build capacity and understanding within government and across stakeholders on market based measures Informing and consulting stakeholders on complex topic and constituting coalition to support policy decision on ETS Gathering support and buy-in for voluntary ETS pilot Small country 9 Costa Rica Aspiration: carbon neutrality by 2021; Steady progress at national level (2011): adoption of CR carbon standard incl. CR carbon offset unit; feasibility studies on domestic market, etc. High level of political support; sector champions, good governance Defining and achieving carbon neutrality vis-à-vis trading carbon offsets Donor coordination Develop domestic carbon market infrastructure Develop sector programs / NAMAs for a crediting mechanism: Energy (renewables & energy efficiency (appliances)) Agro-industry (coffee, sugar cane, dairy => C-neutral exports) Transport (tbd: urban, roads, modal shift (train)) Waste (landfill gas, waste management) Housing (materials for social housing) Registry design and MRV system 10 5
Mexico GHG pledge: 30% below business as usual by 2020 50% of effort to be supported (including through crediting) Elaboration of Nationally Appropriate Mitigation Actions (NAMAs) for a scaled-up crediting mechanism: Urban NAMA Climate change legislation recently approved Recent national elections Integrated urban mobility NAMA Appliances (refrigerator) NAMA Registry design and MRV system Suitability of sectors for market mechanisms? Demand (domestic or international) for emission reductions 11 INFORMATION @ www.wbcarbonfinance.org/pmr or by emailing the PMR Secretariat pmrsecretariat@worldbank.org 12 6
PMR History Current Achievements: $80 mm Pledged major donors involved December 2010 April 2011 May 2011 October 2011 May 2012 15 Implementing Countries engaged including BASICs 15 Preparation Funding Grants awarded Cancun PMR Launch Organizational Meeting Governance structure adopted 8 countries confirmed 1 st PA Meeting First Preparation funding awarded 2 countries confirmed 2 nd PA Meeting/ 1 st Workshop Implementing Participant target reached MRP Tool adopted 3 rd PA Meeting/ 3 st Workshop All preparation grants allocated MRP Tool Designed & Adopted Forum for sharing insights on market instruments created 13 7