DEA methodological development

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DEVELOPMENT AND ENERGY IN AFRICA (DEA) WORKSHOP
Mulungushi International Conference Centre 9th
September 2005
ZAMBIAN EXPERIENCE ON METHODOLOGICAL FRAMEWORK ON
SUSTAINABLE DEVELOPMENT CDM PERSPECTIVES
Prof. F. D. Yamba and E. Matsika CEEEZ Private
Bag E721, Lusaka, ZAMBIA Tel/Fax 260 - 1 -
240267 Email ceeez_at_coppernet.zm
/yamba_at_eng.unza.zm ematsika_at_yahoo.com
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BACKGROUND (1)

• In accordance with the Kyoto Protocol and
  Convention, the purpose of the CDM shall be to
  assist parties not included in the Annex I
  (developing countries) in achieving sustainable
  development
• It is therefore an explicit requirement that CDM
  projects should contribute to the achievement of
  SD in the host country
• Project participants must demonstrate that the
  CDM project assist in achieving SD and also that
  it meets the sustainability requirements of the
  host country

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BACKGROUND (2)

• It is the host partys prerogative to confirm
  whether a CDM project activity achieves SD
• In this context, the host country (Zambia) has
  clear sovereignty and responsibility to evaluate
  the project and decides whether it complies with
  its SD targets and priorities

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BACKGROUND (3)

• Question How are projects assessed to meet SD
  criteria?
• This requires evaluation/approval of CDM projects
  by the host country

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ASSESSMENT OF SD UNDER CDM (1)

• How possible is it to evaluate an isolated
  project and to decide whether such a project is
  sustainable or not?
• Various methods exist qualitative and
  quantitative

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ASSESSMENT OF SD UNDER CDM (2)

• What is ranking (in this context)?
• A systematic tool that allows the qualitative
  comparison of very different and interrelated
  policy priorities and preferences
• For sustainable development, ranking is useful
  for assisting policy makers come to a uniform
  decision on what should be prioritised.

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ASSESSMENT OF SD UNDER CDM (3)

• Multi-criteria analysis (MCA) a tool developed
  for complex multi-criteria problems that include
  qualitative and quantitative aspects. All these
  methods involve two stages first, goals and
  objectives are clarified, and second, weights are
  attached to different objectives. The following
  MCA methods can be used

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ASSESSMENT OF SD UNDER CDM (4)

• Preferential Ranking simplest and does not
  require scoring as such, but indicators with or
  sign to indicate a range

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ASSESSMENT OF SD UNDER CDM (5)

• Multi-criteria analysis (MCA) contd
• Normal ranking closely related to preferential
  ranking, except here, the range is indicated with
  numbers rather than or

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ASSESSMENT OF SD UNDER CDM (6)

• Multi-criteria analysis (MCA) contd
• Ordinal ranking technique where each expert is
  asked to put the list of decision elements in
  order of importance or hierarchy of importance

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ASSESSMENT OF SD UNDER CDM (7)
 
 

• Multi-criteria analysis (MCA) contd
• Rating requires that a decision maker allocates
  or indicates a score between 1 100 (ideally,
  total adds to 100)

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ASSESSMENT OF SD UNDER CDM (8)

• Pairwise simply a round of tournament technique
  by which every item in a list is compared to
  every item according to a single criterion
• Decision hierarchy combines normal ranking and
  pairwise ranking with simple vector mathematics,
  and considered at different levels of aggregation

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ASSESSMENT OF SD UNDER CDM (9)
Figure An Example of Decision Hierarchy
Level 1
Sustainable Development
Level 2
Economics
Society
Environment
Reduced Debt Ratio
Other indicators
Gender Equality
Other indicators
Better air
Other indicators
Level 3
Qns
Qns
Qns
Qns
Qns
Qns
Level 4
Indicates strong impact on
Qn a question on the CDM checklist (see Section
4.2.2 for more details)
Indicates weak impact on
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ASSESSMENT OF SD UNDER CDM (10)
Steps for identifying SD criteria under CDM

• Step 1 identification of sustainability criteria
• Should reflect the requirements of the host
  country as well as preference of the decision
  makers involved
• Presented as targets grouped in an objective tree
  embracing the accepted criteria of economic,
  environmental, social and technological aspects

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ASSESSMENT OF SD UNDER CDM (11)
Steps for identifying SD criteria under CDM

• Step 2 Definition of indicators
• Indicators are associated to each SD criteria
  above
• They measure to what extent a particular CDM
  project meets the SD criteria
• Qualitative, semi-quantitative and quantitative
• To be comparable, all indicators are calibrated
  with the same scale

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ASSESSMENT OF SD UNDER CDM (12)
Steps for identifying SD criteria under CDM

• Step 3 Weighing the criteria
• According to the specific context and preferences
  of decision makers, the relative importance of
  criterion is determined
• Mixture of top-down approach and participatory
  techniques
• Step 4 Assessment of CDM project
• In a review process, a project receives a rating
  of how it performs against those indicators based
  on a quantitative/qualitative assessment

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ASSESSMENT OF SD UNDER CDM (13)
Steps for identifying SD criteria under CDM

• Step 5 Aggregation and interpretation of results
• The projects rating of all criteria are
  aggregated to a single number that reflects the
  eligibility of a project in regard to SD in the
  host country
• Cut off mark below which projects fail to be
  successful this determines how stringent a
  country wishes to make the requirements that CDM
  projects conform to SD criteria

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ZAMBIAS EXPERIENCE IN DEVELOPMENT OF SD FOR CDM
(1)

• Zambia is one of the few countries in Africa
  which has made good progress in developing SD
  criteria and indicators for CDM through CDM
  SUSAC (2000 2002)
• Methodology developed by CEEEZ for assessing SD
  is presented

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ZAMBIAS EXPERIENCE IN DEVELOPMENT OF SD FOR CDM
(2)

• The rating approach gives appropriate weighting
  to the 3 broadly agreed upon principles of
  sustainable development goals, namely economic,
  environmental and social.
• Indicators related to each of these principles
  are then identified in relation to the indicators
  agreed upon earlier.

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ZAMBIAS EXPERIENCE IN DEVELOPMENT OF SD FOR CDM
(3)

• The ranking approach then weighs each indicator
  in each given category after which the total
  marks accrued are proportionally related to a
  percentage of a given category.
• Based on the principle above, the assessment for
  this project is undertaken as follows...

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ZAMBIAS EXPERIENCE IN DEVELOPMENT OF SD FOR CDM
(4)
INDICATOR MARKS OBTAINED REPRESENTATIVE WEIGHTING () TOTAL ()
Economic 38
Environmental 33
Social 29
Total 100
A project is eligible if it scores at least 55,
the threshold
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ZAMBIAS EXPERIENCE IN DEVELOPMENT OF SD FOR CDM
(5)
Sustainable Development Indicators (1)

• Economic (1)

• Reducing the burden on the imports of energy and
  enhancing the balance of payment
• Increased investment in priority sectors of the
  economy
• Contributing to competitiveness at a micro-level,
  like industry
• Positive effects on the balance of payment
• Improved sectoral productivity, growth and
  linkages leading to higher contribution to GDP

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ZAMBIAS EXPERIENCE IN DEVELOPMENT OF SD FOR CDM
(6)
Sustainable Development Indicators (2)

• Economic (2)

• Reduction of energy intensity (energy used per
  unit product) at a micro level
• Increasing share in the contribution of renewable
  energy to the energy supply mix at a macro-level
• Job creation

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ZAMBIAS EXPERIENCE IN DEVELOPMENT OF SD FOR CDM
(7)
Sustainable Development Indicators (3)

• Environment

• Reduction of GHG emissions (CO2, CH4, N2O) aimed
  at enhancing global environmental integrity
• Reduction of local emissions (SO2, NOx, CO,
  NMVOC) impacting on air
• Reduction of local emissions (SO2, NOx, CO,
  NMVOC) impacting on water resources
• Reduction of local emissions (SO2, NOx, CO,
  NMVOC) impacting on land
• Reduction of local emissions (SO2, NOx, CO,
  NMVOC) impacting on bio-diversity

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ZAMBIAS EXPERIENCE IN DEVELOPMENT OF SD FOR CDM
(8)
Sustainable Development Indicators (4)

• Social

• Contribution to poverty reduction through local
  employment
• Contribution to more equitable distribution of
  resources (reduction of wealth disparities)
• Increase in percentage of rural and peri-urban
  population with access to energy supply
• Affordability of the project product (s).
• Capacity building (e.g. transfer of technical
  skills)
• Reduction of health hazards
• Contribution to access to social amenities

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EXAMPLE SD ASSESSMENT
Table Sustainable Development Evaluation for the
Ethanol as an Alternative Fuel in
Zambia
INDICATOR MARKS OBTAINED REPRESENTATIVE WEIGHTING () TOTAL ()
Economic 72.2 38 27.4
Environmental 73.3 33 24.2
Social 71.4 29 20.7
Total 100 72.3
the project is eligible since the score is gt 55,
the threshold
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CONCLUDING REMARKS (1)

• Many SD indicators discussed for Zambia can apply
  to other developing countries
• Presentation recommends a quantitative approach
  that combines two multi-criteria analysis methods
  namely rating and normal ranking methods
• indicators are country-specific and depend on
  national circumstances

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CONCLUDING REMARKS (2)

• indicators are dynamic and so should be reviewed
  in line with Government development plans and
  priorities
• Despite being biased to CDM, the proposed
  methodological approach can be generically
  applied by developing specific sustainable
  development indicators