NAMAs and the Building Sector

1
NAMAs and the Building Sector
UNFCCC Workshop Buildings under UNFCCC
Flexible Mechanisms Chia-Chin Cheng UNEP-SBCI
Beihang University International Green Energy
Center Bonn, Germany March 24, 2011
2
Outline

• NAMAs context
• CDM and NAMAs working together a two-track
  developing country mitigation support mechanism
• Benefits of the new NAMAs mechanism
• Three Papers/Reports from SBCI and Risoe
• The Kyoto Protocol, the CDM The Buildings
  Construction Industry- 2008
• NAMAs for Dispersed Energy End-Use Sectors Using
  the Building Sector as an Example- 2009
  Perspective Series
• CDM, NAMAs and the Building Sector a Two-Track
  Financing Mechanism for Post-2012 2011 working
  paper

3
New Development under UNFCCC

• Developing Countries will share mitigation
  responsibilities
• Bali Action Plan
• Nationally appropriate mitigation actions by
  developing country Parties in the context of
  sustainable development, supported and enabled by
  technology, financing and capacity-building, in a
  measurable, reportable and verifiable manner.

• Copenhagen Accord started signing up for NAMA

• Cancun Agreement confirmed setting up NAMA
  registry for support

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Underlying causes for low EEB uptake

• Long-tail characteristics of the sector- small
  saving, big effort
• Fragmentation of sector / uncoordinated
  stakeholders
• Insufficient RD and information for new EEB
  technologies
• Insufficient EEB tech and management expertise
  and tools
• High upfront and transaction costs for tech
  adoption in DC
• Lack financing mechanism and interests for EE
  investments
• Lack of awareness and general inertia restrict
  uptake

Source Cheng, et al., 2008
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To Overcome Generic Barriers in Building Sector

• These barriers are essentially market failure
• CDM as an market-based mechanism cannot correct
  market failure
• key long-tail sectors market failures are
  prominent
• rural sectors and LCD no sufficient market
  activities
• Public policies are required to correct market
  and overcome barriers
• To fundamentally transform the building sector in
  developing countries
• Developing countries requires public sector
  support to enforce public policies -- NAMAs
• Developing countries requires private sector
  support for compliance of public policies -- CDM

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Possible Post-2012 Mechanisms -- Dual Track
Financing

• Policy based financing mechanism (NAMAs)
• create enabling conditions for a systematic
  uptake for climate change mitigation activities
  from the private sector in developing countries
• provide necessary funding, technology and
  capacity assistance for policy implementation,
  particularly to difficult sectors and in least
  developed countries
• Project/program based carbon financing
• The boost of enabling conditions foster
  large-scale private sector investment and make
  use of CDM as an additional mechanism
• provide necessary means and financial resources
  to help regulated entities comply with government
  policies
• increase speed, quality and depth of policy
  implementation

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Important Issues to be Address before inserting
NAMAs

• All BAP elements need to be addressed in the new
  mechanism
• Technology transfer and development
• Capacity building
• Sustainable development
• Avoid double counting with CDM
• Use non-carbon based MRV
• - some effective policy measures do not
  necessarily result in carbon emission reduction
• - many quantitative indicators available to
  measure success
• Source of funding
• Initially public funding
• Later private sector funding

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Need Based NAMAs Registry for the Building Sector

• Mandatory building inventory and baseline
  performance
• Mandatory minimum performance based standards
• Mandatory/voluntary building rating and
  certification program
• Loan, subsidies, incentives and tax breaks
• Building auditing programs for compliance and
  certification
• Building survey and monitoring programs for MRV
  purposes
• Minimum performance standards for appliances and
  equipment
• Building professional certification and education
  programs
• Technology need assessment, demonstration and
  model house programs
• Public sector building improvement and high
  performance building deployment programs
• RD programs for new building materials,
  technology, and practices
• Awareness raising and informational campaign
  programs

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MRV for NAMAs

• Carbon emission reduction is not a good
  measurement of success for NAMA programs.
• -- impacts of public policies are often
  far-reaching and interwoven, it is almost
  impossible to distinguish emission reduction
  resulting from an enabling policy or from real
  and additional voluntary private sector actions,
  when the majority of emission reduction occurs in
  the private sector.
• Using carbon credits for NAMA MRV and the basis
  for financing, double counting with the CDM will
  become almost inevitable.
• Lead to selective implementation on measures
  which are easy to determine emission reductions.
  Many policies and measures that have profound
  long-term impact, and create extensive
  co-benefits, may not be considered and
  implemented in DC.

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Other Indicators are Available to Measure Program
Success

• Indicators for MRV should be able to demonstrate
  the specific outcome or changes in various
  enabling programs.
• Improvement in average energy performance of
  commercial buildings
• Percentage of new buildings built according to
  minimum energy performance standards.
• Percentage of existing building retrofitted
  according to minimum energy performance standards
  for building retrofitting.
• Percentage (number) of buildings audited,
  certified or rated according to predetermined
  benchmarks.
• Number (percentage) of state-of-the-art buildings
  constructed (e.g., zero emission buildings and
  passive buildings).
• Total amount of loans, subsidies, or tax breaks
  issued.
• Number of auditors on job, number of new auditors
  trained.
• Number of building professionals and percentage
  trained and on job.

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NAMAs to Create Enabling Environment for Project
Based Mechanism
BAU BASELINES
Energy Performance KWh/m2 (by topology, climate
zones)
Time
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NAMAs to Create Enabling Environment for Project
Based Mechanism
BAU BASELINES
Energy Performance KWh/m2 (by topology, climate
zones)
Time
13
NAMAs to Create Enabling Environment for Project
Based Mechanism
Energy Performance KWh/m2 (by topology, climate
zones)
Time
14
NAMAs to Create Enabling Environment for Project
Based Mechanism
Energy Performance KWh/m2 (by topology, climate
zones)
Carbon Credits
CDM or Project Program Based Mechanism (carbon
credit based financing)
Voluntary technology upgrade Building rating
certification
Time
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Benefits of the new NAMA mechanism

• Because carbon credits are not the measurement of
  success , it avoids the double counting problem
  with the existing mechanisms.
• Utilize public policy and funding to foster and
  mobilize private sector investment through the
  CDM.
• For developed countries, the NAMA framework goes
  beyond offsetting mechanisms and focuses on
  supporting enabling environment for mitigation
  actions in developing countries.
• Address all essential elements in the BAP 1b(ii)
  and include mechanisms to support activities for
  capacity building, technology, financing and MRV.
  

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Benefits of the new NAMA mechanism

• Integrate funding from developed countries for
  development aids for capacity building and
  technology transfer in the climate change sector
  and implement in a more systematic manner.
• Correct market barriers for key end-use long-tail
  sectors and boost CDM activities in these
  underdeveloped sectors.
• Change the regional distribution of the CDM by an
  enabling policy framework based on country needs.