Demand for CDM from Business Side Current status of CDM in Japan

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Demand for CDMfrom Business Side- Current
status of CDM in Japan -

• Taishi Sugiyama,
• Masayo Wakabayashi, Takahiro Ueno and
• Osamu Kimura
• CRIEPI, Japan
• International Conference June 7, 2004

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Outline

• Emission trends in Japan
• Demand for CDM
• Public and private initiatives for CDM
• Promising project types
• Conclusion

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Reductions Required to Meet Kyoto Target
-6 from 1990
(modified from Grubb et.al. 2001)
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Energy-CO2 emission trend in Japan
Mt-CO2
Target
500
-7
Industry
400
1990 level emission
300
Transport
17
Commercial
200
-2
Residential
-2
100
0
90
95
00
02
91
92
93
96
97
98
99
94
01
2010
Even strong efforts are not sufficient.
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Large Demand for Kyoto Mechanism

• Japan has to comply the Kyoto target.
• Political salience will pressure toward
  compliance.
• Emission trading?
• Not get used to business with Russia and EITs.
• CDM with Asian countries can be promising for
  compliance
• Large demand for CDM

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Business response for CDM/JI

• A number of private companies involved
• 1 JI and 5 CDM projects are registered
• 3 projects have been validated by the EB
• Participation in PCF and CDCF
• Japan Carbon Fund from this summer
• To minimize the risk of CDM/JI projects
• Why business response?
• Implementing Voluntary Action Plans
• Preparation for the possible future regulation
• Learning by doing

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Japan Carbon Fund

• Scheduled to start this summer
• About 100 mil USD, with over 20 private firms

26 JBIC offices across the world
Communication
Host Country
Loans
Loans
CDM/JI projects
Credit
Funds
Credit
Credit
Firms
JBICDBJ
Fund
Equity
Equity
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Government initiative

• Not strong so far
• 1.6 reduction through the Kyoto Mechanism in
  its 6 obligation.
• Subsidy program for feasibility studies.
• But getting stronger
• Subsidy program for CDM projects started in 2002.
• Further initiatives to promote KM under
  consideration.

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How to Meet Carbon Demand?

• A variety of project types
• Wind and PV low risk, but expensive and limited
  volume
• Energy efficiency cost-effective and substantial
• Fuel switching to low-carbon fuels
  cost-effective and substantial
• In order to obtain a great amount of reduction
  credit required,
• All pillars should be explored
• with equal importance

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Cost of Emissions Abetment Technologies Chinas
Energy Sector
ADB/ ALGAS
Renovation and reconstruction of conventional
thermal power plant
Hydro power
ALGAS Asia Least-Cost Greenhouse Gas Abatement
Strategy
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Cost of Emissions Abetment Technologies
Thailands Energy Sector
ADB/ ALGAS
More electricity generation from nuclear
Fuel switching from gas to nuclear for power
generation
Further fuel switching from coal to gas for power
generation
Fuel switching from coal to gas for power
generation
ALGAS Asia Least-Cost Greenhouse Gas Abatement
Strategy
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Conclusion

• Strong target and small domestic potential
• Large demand for CDM
• Strong interests from private companies
• Governmental initiative had been weak so far, but
  getting stronger.
• Broad range of technology options should be
  explored to meet the target.

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• Thank you!
• Contact
• Osamu Kimura
• Central Research Institute of Electric Power
  Industry (CRIEPI), Japan
• o-kimura_at_criepi.denken.or.jp