Urban CDM efforts undertaken by KEI and UEA : Urban Carbon Offset Methodology tool-kit Developing Project March 28, 2014 H.W. Lee, Korea Environment Institute & H.J. Moon, H. Lee, EFConsulting
Urban CDM efforts undertaken by KEI and UEA :Urban Carbon Offset Methodology tool-kit Developing ProjectMarch 28, 2014
H.W. Lee, Korea Environment Institute & H.J. Moon, H. Lee, EFCon-sulting
Contents01/ Project Background02/ Project Process03/ Project Progress - Literature Review - Tool-kit Framework
Setup04/ Project Result - Tool-kit Building05/ Conclusion
3
Project Background – Importance of Urban Area
More than 50% of the world’s population dwells in urban area
More than 70% of the world’s carbon emissions come from urban area
Urban Rural0
20
40
60
80 71
29
GHG Emissions
50%50%
World’s Population 2010
UrbanRural
75%
25%
World’s Population 2050
UrbanRural
Importance of Urban Area Getting Growth
Source: World bank, IEA
4
Project Background - Urban Base CDM Projects
The amount of CERs from urban area take less than 1% of total CERs issued
Most CERs come from CDM projects from non-city area
Carbon emissions reduction performance from urban area is very limited
0.940%
99.060%
Registered CDM Projects*
urban rural 0.159%
99.841%
Issued CERs**
urban rural
World’s Carbon Emissions Fraction
Source: CDM Pipeline, UNEP
* Number of registered and CERs issued CDM project clearly declared its city base in project title/project info
** Amount of CERs issued from the CDM project of * above
5
Project Background - Urban Base CDM Projects
Limited GHG emission reduction performance from urban area rooted from various
reasons
Complicated Adminis-trative
Procedures
Complicated Methodologies
Less AttractiveIncentives
Long ProjectTime Period
Limited Emission Reduc-
tionPerformance
︙
Complicated methodologies amplifyproblems come from limited ownership
UrbanContext
Specialty(Limited Owner-ship)
- Continuous progress in administrative procedures could be an issue for munic-ipal ownership change
- Project performance may not be realized in a single municipal period
- For the municipal gover-nor or organization, projects are less attractive
6
Project Background – Project Goal
Developing a carbon offset methodology tool-kit for expanding urban carbon emis-
sion reduction projects by utilizing existing CDM methodologies
Modifications
1. Easier usabil-ity
2. Improved ur-bancontext suit-ability
︙
Methodology Tool-kit Development
Item Modification
Applicable Conditions
Provision of Simplified approach
Additional-ity Provi-sion
Allowing external aidsExcluding partial processIntroduction of simplified approach
Baseline Selection
Provision of Simplified approach
Monitoring Process
Provision of Simplified approach
︙ ︙
Descrip-
tive
Contents01/ Project Background02/ Project Process03/ Project Progress - Literature Review - Tool-kit Framework
Setup04/ Project Result - Tool-kit Building05/ Conclusion
- Concept of urban CDM Urban- CDM methodology selecting ap-
proach- Barriers of implementing urban
CDM projects
Project Process – Project Flow
8
UNEP early works on urban CDM
Tool-kit developmentframework setup
Tool-kit development
CDM related literatures
Tool-kit method format setup
Summarizing projects implementa-tion barriers
Revising methodology selective approach
Methodology selection for tool-kit development
Expert verification in progress
Literature Review Framework setup Tool-kit Development
- Barriers of implementing general CDM projects
- Revise UNEP methodology selec-tive approach for methodology se-lection
- Summarize implementation barri-ers for tool-kit building frameworks
- Tool-kit framework setup for the tool-kit development
- Tool-kit development
9
Literature Review – UNEP Urban CDM Work(1)
UNEP’s work provides a basic concept of a urban carbon emissions and range of
urban carbon emission reduction
Priority Sector
Major Emission Sources/Origin in the Urban
Context
Types of GHGs
Residential/Commercial
Buildings, energy demand for heating/cooling, appliances
CO2
Transport Individual transportation CO2
WasteLandfills, waste handling and management
CH4(CO2)
EnergyPower generation, energy supply
CO2
Industrial(excl. heavy
industry)
Inefficient use and supply of process heat; inefficient appliances
CO2
Typical emission sources in citiesPriority sectors, emission origin and GHG type
Source: UNEP
10
Literature Review – UNEP Urban CDM Work(2)
UNEP’s work provides criteria of specifying suitable CDM methodologies for urban
area and the list of proper CDM methodologies for urban area
1. CDM feasibility (5points in total)
General sector applicability(‘priority sectors)Methodology is not in priority sec-
torIn priority sector
0 1
Existence of a project utilizing the methodologyProject not exist Project exist
0 1
Number of time the methodology utilized1~5 5~20 20~
1 2 32. Urban Context Applicability(10points in total)
Applicability for the urban contextNot applicable Applicable
0 1
ComprehensivenessTemporary change
Technological Improve-ment
Fundamental im-provement
1 2 3
Applicability of the methodology in multiple priority sectors
Not applicable Applicable0 1
Existing combination with other methodologiesCombination not exist Combination exist
0 1Municipality or city based companies involved in existing projects
Municipality/companies not exist Municipality/companies exist0 1
Scalability / city wide approach(PoA/Bundle)
PoA not applicable(in general) PoA applicable(in general)0 1
Bundle not applicable(in general) Bundle applicable(in general)0 1
Existing PoAPoA not exist (CDM Pipeline) PoA exist (CDM Pipeline)
0 1
11
Literature Review – UNEP Urban CDM Work(3)
UNEP’s work provides criteria of specifying suitable CDM methodologies for urban
area and the list of proper CDM methodologies for urban area CDM feasibility Urban context applicability
Approvedmethodol-
ogy
General sec-tor
applicability('prioritysectors')
Has themethodol-
ogybeen ap-
plied?
Number of times used
CDMscoring
Application
forthe urbancontext
Compre-hen-
siveness(avoid=3;shift=2;
improve=1)
Methodologyused in more
than onesector?
Exisitingcombinationwith othermethodol-
ogy
Municipality or
city companyinvovled in
projects
Scalability / city
wide ap-proach
ExitingPoA
(pipeline)
Urbancontextscoring
Overallscoring
1<56<2
0>20 PoA Bundle
AM46 1 1 1 3 1 1 1 3 6
AM70 1 1 1 3 1 1 1 3 6
AM71 1 1 1 1 1 3 4
AM91 1 1 1 2 1 1 5 6
AM94 1 1 1 2 1 4 5
AMS-I.I. 1 1 1 2 1 1 5 6
AMS-II.C 1 1 3 5 1 1 1 1 1 1 1 1 8 13
AMS-II.E. 1 1 3 5 1 2 1 1 1 1 1 1 9 14
AMS-II.J. 1 1 3 5 1 1 1 1 1 1 1 7 12︙
Score over
10; 28
Score less 10;
106
Methodology scores
Urban; 134
Non-Urban;
45
Urban/Non-Urban Methodologies
No. Portion
Total Meth 179 100%
Urban Meth 134 74,86%
Non-urban Meth 45 25.14%
No. Portion
Urban Meth 134 100%
Overall score over 10 28 20.89%
Overall score below 10 106 79.11%
12
Literature Review – UNEP Urban CDM Work/Other Works
UNEP’s work and other literatures provides idea of potential obstacle factors of
implementing urban carbon offset projects
Materials Publication Sources Contents Characteristics
CDM Reform 2011 IGES Provision of various CDM improvement measures in general
A Reformed CDM UNEPProvision of CDM improvement measures focusing on improvement in procedures
10 Lessons from 10 years of CDM Climate ReportProviding barriers of implementing CDM project focusing on CERs supply and demand of CERs
CDM Reform World BankAnalysis of CDM bottlenecks and provision of ideas related to standard procedures
Reforming the CDM for sustainable development
Emily Boyd, etc.Analysis of CDM projects and provision of improving measures in academic approach
Feasibility Study on the Development of an Urban CDM for the United Nations Environment Programme
UNEP Considering urban characteristics in analyzing CDM projects barriers
Contents01/ Project Background02/ Project Process03/ Project Progress - Literature Review - Tool-kit Framework
Setup04/ Project Result - Tool-kit Building05/ Conclusion
14
Framework Setup – Methodology Selection
UNEP’s approach of selecting CDM methodologies for urban area considers project
feasibility and urban context applicability
Feasibility constraints may exclude the methodologies fitting to urban context, but
has not been implemented
UNEP Approach Revised Approach
1. CDM feasibility ScoreGeneral sector applicability(‘priority sectors) 1Existence of a project utilizing the methodology 1
Number of time the methodology utilized 3
2. Urban Context Applicability(10points in total)
Score
Applicability for the urban context 1Comprehensiveness 3Applicability of the methodology in multiple priority sectors 1
Existing combination with other methodologies 1
Municipality or city based companies involved in existing projects 1
Scalability / city wide approach(PoA) 1Scalability / city wide approach(Bundle) 1Existing PoA 1
1. CDM feasibility ScoreGeneral sector applicability(‘priority sectors) 1Existence of a project utilizing the methodology 1
Number of time the methodology utilized 3
2. Urban Context Applicability(10points in total)
Score
Applicability for the urban context 1Comprehensiveness 3Applicability of the methodology in multiple priority sectors 1
Existing combination with other methodologies 1
Municipality or city based companies involved in existing projects 1
Scalability / city wide approach(PoA) 1Scalability / city wide approach(Bundle) 1Existing PoA 1
Select the methodologies with overall score over 10(excepting 2 methodologies irrelative to urban context)
Select the methodologies with urban context applicability score over 6
(over 5 in transport sector for its special characteristics: Representativeness of public transportation)
15
Framework Setup – Methodology Selection
Selection result changed in waste/transport/energy sectors
Waste Sector
UNEP ApproachRevised
Approach
ACM 1 ACM 1
AMS-III.G AMS-III.G
AMS-III.H AMS-III.H
AM25 AM25
AMS-III.E AMS-III.E
AMS-III.F AMS-III.F
Newly Included AMS-III.AO
Transport
UNEP ApproachRevised
Approach
AMS-III.C AMS-III.C
Newly Included
ACM16
AM31
AMS-III.U
Energy
UNEP ApproachRevised
ApproachACM2 ACM2
AMS-I.A AMS-I.AAMS-I.B AMS-I.BAMS-I.C AMS-I.CAMS-I.D AMS-I.DAMS-I.F AMS-I.FAMS-I.J AMS-I.JACM6 ACM6
ACM18 ACM18AMS-I.E AMS-I.EAMS-II.G AMS-II.GACM12 ACM12
AMS-III.Q
Excluded AMS-II.B
AM29AMS-III.B
16
Framework Setup – Methodological Barriers
Tool-kit development framework building based on results of literature reviews on
CDM projects implementation barriers
Extended project period
Redundant procedures (validation/ver-ification)
Strict data management requirement
Difficulties in additionality proof
Constraints in utilizing external finan-cial aids
Difficulties in baseline selection/proof
Implementation Barriers in Literatures
A. Difficult additinality proof procedures/non-economic ob-stacles
B. Monitoring requirement in facility unit
C. (PoA) Identical methodology should be applied in all sub-activities
D. Monitoring cost increase from dispersed end-users
E. Difficulties in proper baseline setup and proof of proper-ness
F. Separation of GHG reduction results from external finan-cial aids
G. Excessive data management requirements in monitoring procedures
Methodological Barriers
17
Framework Setup
Tool-kit development framework building based on results of literature reviews on
CDM projects implementation barriers
A. Difficult additinality proof procedures/non- economic obstacles
B. Monitoring requirement in facility unit
C. (PoA) Identical methodology should be applied in all sub-activities
D. Monitoring cost increase from dispersed end-users
E. Difficulties in proper baseline setup and proof of propernessF. Separation of GHG reduction results from ex-ternal financial aids
G. Excessive data management requirements in monitoring procedures
Methodological Barriers
1. Introducing concept of automatic additionality (CDM micro-scale automatic additionality)
2. Excepting municipal aids from investment analysis/common practice analysis in addition-ality proof procedures
3. Allowance of data monitoring in system unit (allowance of aggregated data monitoring)
4. Allowance of utilizing multiple methodologies in sub-activities in PoA projects
5. Allowance of using self-developed monitoring variables (with external validation)
6. Provision of default baseline scenarios
Tool-kit Development Framework Setup
18
Framework Setup – Solutions for the Barri-ers(1)
1. Introducing concept of automatic addi-tionality
(CDM micro-scale automatic additional-ity)
2. Excepting municipal aids from invest-ment
analysis/common practice analysis in additionality proof procedures
Introducing automatic additionality con-ditions: Projects satisfying following conditions are additional
- Renewable energy project with capacity less than 5MW
- Energy efficiency improvement project with emission reduction scale equal or less than 20GWh/year
- Other projects with emission reduction scale equal or less than 20,000tCO2e/year
Projects not satisfying automatic addi-tionality conditions should follow typical additionality proving procedures with following changes
- Except municipal financial aids from in-vestment analysis
- Except common practice analysis in typical additionality proving procedures
City/Urban area has higher probability of having dispersed components (dispersed participants/end-users) Difficulties in proving additionality is excessive in urban context
City/Urban area has higher probability of having dispersed components (dis-persed participants/end-users) Without municipal aids, projects have less chance to be implemented because of dispersed incentivesTechnology availability is limited in ur-ban contextless chance of prove projects’ unique-ness (difficulties in common practice analy-sis)
19
Framework Setup – Solutions for the Barri-ers(2)
3. Allowance of data monitoring in system unit
(allowance of aggregated data monitor-ing)
4. Allowance of utilizing multiple method-ologies in sub-activities in PoA projects
In data monitoring process, allow data monitoring in system unit
: Previously prohibited in general CDM projects (data management must be performed in equipment unit)
City/Urban area has higher probability of having dispersed components (dispersed participants/end-users) Difficulties amplified in data control/monitor in equipment unit because of dis-persed ownership of facilities
For PoA projects, allow utilizing multiple methodologies for PoA component activ-ities(for small-scale methodologies)
: Previously prohibited in general CDM projects (every sub-activities composing PoA project should use identical methodologies)
City/Urban area has limitation in secur-ing similar sub-activities can utilize the same methodology for its limited terri-torial range More flexibility in methodology selec-tion may increase chance of carrying PoA like projects in urban context
20
Framework Setup – Solutions for the Barri-ers(3)
5. Allowance of using self-developed mon-itoring variables (with external validation) 6. Provision of default baseline scenarios
Monitoring variables which are esti-mated by additional methodological tools can be substituted by self-esti-mated variables by project participants with external validation
: Previously prohibited in general CDM projects (In case of utilizing self-estimated vari-ables instead of variables provided by methodology, permission of UNFCCC EB is required)
City/Urban area has higher probability of having dispersed components (dispersed participants/end-users) Because of dispersed ownership of equipment/facility, monitoring every detail data would ban project implementa-tion for limited data availability
Providing default baseline scenarios and simpler procedures for easier approach to selecting baseline scenarios
- Provide representative(default) baseline scenario
- Excluding procedures for exempting irrela-tive baseline scenarios
City/Urban area has higher probability of having dispersed components (dispersed participants/end-users) Dispersed components may lead to various project backgrounds: amplified diffi-culties in providing baseline scenario validity
21
Framework Setup – Tool-kit Method Format
Tool-kit format is composed with 8 items similar to components of regular CDM
methodology
CDM Methodology Format Tool-kit Formats
Item Contents
Project Outline Typical project outline
Project Scope(Type) Types of relative projects
Applicability conditions Conditions for applying meth.
Project BoundaryPhysical boundary of method-ology implication
Baseline ScenarioRepresentative baseline sce-nario
Additionality proofAdditionality proving proce-dures
Emission Reduction Calculation
Measures of emission reduc-tion estimation
Major Monitoring vari-ables
Major variables for example
Tool-kit format is defined for representing improvements from the tool-kit development framework
1. Introduction
2. Scope, applicability, and entry into force
1. Scope
2. Applicability
3. Entry into force
3. Normative References
1. Selected approach from paragraph 48 of the CDM modalities and procedures
4. Definitions
5. Baseline Methodology
1. Project Boundary
2. Procedure for estimating the end of the remaining lifetime of existing equipment
︙
6 Tool-kit Development Framework
22
Tool-kit Building: example
ACM 0001: Flaring or Use of Landfill Gas
Project Outline• Capture of LFG and flaring and/or use to energy production and/or supply to customers
through gas distribution network(trucks)• GHG destruction
Project Scope(Type)
• Projects capturing LFG for use/destruction
Applicability con-ditions
• Flaring captured LFG and/or• Utilizing captured LFG for energy production and/or• Supplying captured LFG to customers
Project Boundary • LFG capturing/Flaring facilities• Facilities utilizing captured LFG (Power plants/Heat plants, etc.)
Baseline Scenario
• LFG is directly emitted to atmosphere• LFG capturing/flaring is performed without carbon offset projectsWhen the project is not included in conditions above, following original procedures for determine baseline scenario of ACM 0001 without proving irrelativeness of non-proper scenarios
Additionality proof
• Projects satisfying following conditions are additional1. Renewable energy project with capacity less than 5MW2. Energy efficiency improvement project with emission reduction scale equal or less than 20GWh/year3. Other projects with emission reduction scale equal or less than 20,000tCO2e/year
• Projects not satisfying conditions above follows original procedures for proving additionality provided in ACM 0001 excepting:
1. Separation of parts from municipal financial aid during investment analysis 2. Common practice analysis
Emission Reduc-tion Calculation
• Follow original methodology given by ACM 0001; use of self-estimated variables substituting original variables estimated by additional methodological tool is allowed when proper external validation is performed
Major Monitoring variables
• MSW operation status• Fraction of LFG flared designated by regulation• Operation status of LFG utilization facilities(if any)• Amount of LFG utilized• Energy consumption in relative facilities Follow original methodology for details of monitoring method Aggregated data monitoring is allowed
1. Introducing concept of automatic additionality
2. Excepting municipal aids from investment analysis/common practice analysis
3. Allowance of data moni-toring in system unit
4. Allowance of utilizing multiple methodologies in sub-activities in PoA projects(only for small scale)
5. Allowance of using self-developed monitoring vari-ables (with external valida-tion)
6. Provision of default baseline scenarios
23
Conclusion: Tool-kit Utilization
Developed methodology tool-kit is a very first tool-kit developed based on existing
methodologies; hence, the tool-kit would be utilized in various ways
Project Motivation Project Results Future Utilization
• Increasing importance of city/urban area in GHG emission perspective
• Limited performance of city/urban area based car-bon emission reduction projects
Expanding city/urban area based carbon emission reduc-tion projects by developing methodology tool-kit for city/ur-ban area projects
• Selecting city/urban suit-able CDM methodologies
• Developing methodology tool-kit framework
• Building urban methodol-ogy tool-kit
From improving previous works,
1) Selecting proper CDM methodologies for urban context2) Building tool-kit development frameworks3) Development of urban methodological tool-kit
Utilize as a starting material for improving CDM system for cov-ering city/urban area(administrative procedures, MRV requirements, etc)
For new city/urban area based carbon emission reduction projects or new carbon offset projects, developed tool-kit would be applied for project de-velopment
• With real case experiences of the tool-kit application and continuous feedbacks for tool-kit improvements
The end of document