INTERNATIONAL SUPPORT FOR DOMESTIC ACTIONInternational Support for Domestic ActionMechanisms to Facilitate Mitigation in Developing CountriesKarsten Neuhoff
DIW & Climate PolicyInitiative
Copenhagen 14/12/09
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
Source:PNLT, 2007
Federal Government Plan “The National Plan on Logistics and Transport: a policy that can promote a significant change in the modal split in the country”
“The National Plan on Logistics and Transport: a policy that can promote a significant change in the modal split in the country”
The reduction of freight by road has potential to mitigate GHG:10 to 20% of freight emissions
The reduction of freight by road has potential to mitigate GHG:10 to 20% of freight emissions
Workshop conducted to assess how to achieve the target.
Workshop conducted to assess how to achieve the target.
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
1. Low-carbon Development Strategy
Capacity Building
Technology Cooperation
4. Reporting
3. International mechanisms
Domestic
International
International Verified
- emission
2. NAMA
Autonomousmitigation action
plan
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
Additional fuel supply
Reference (Conventional
technology & practises)
Mitigation Scenario (Low carbon
technology & development)
Shift operation costs to
investment
Inv
es
tme
nt
Co
sts
Po
we
r s
ec
tor
50
100
150
200
250
$ billionsin 2030
Technology / Skills
New business practises
Incrementalcosts
Subsidy removalCarbon pricing
Remove regulatory barriers
Capacity buildingTechnical assistance
Incrementalcosts
Subsidy removalCarbon pricing
Remove regulatory barriers
Additional fuel supply
Reference (Conventional
technology & practises)
Shift finance / investment
Energycost savings
Shift finance / investment
Energycost savings
Mitigation Scenario (Low carbon
technology & development)
Support incremental costs
Carbon marketsPublic transfers
Support incremental costs
Carbon marketsPublic transfers
Loans
Risk guarantees
Loans
Risk guarantees
Shift operation costs to
investment
Inv
es
tme
nt
Co
sts
Po
we
r s
ec
tor
Offset mechanisms (e.g. CDM)Offset mechanisms (e.g. CDM)
Capacity buildingTechnical assistance
Technical assistanceTransparency, outside commitment
Role of Public SectorRole of Private Sector InternationalDomestic
Role of Private Sector Domestic
Role of Public Sector
International
Experience /Technology
Technology / Skills
New business practises
Technical assistanceTransparency, outside commitment
Capacity building / Technical assistanceCapacity building / Technical assistance
50
100
150
200
250
$ billionsin 2030
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
Public Finance Mechanism
Direct support Indirect support
International to project
International to national
National to project
Contr
ibuti
on t
o
inves
tmen
t and
oper
ati
on
Up-front grant - Standard Technical assistance grants - ‘Smart’ grants
GEF grants Other bilateral and multilateral DFIs
ODA Investment support
Funding during operation
Offset mechanisms (CDM) WB support
Grant linked to continuous delivery (finance +regulatory stability)
*Incremental payment to renewable *Removal of energy subsidies * Carbon tax/cap and trade scheme
Faci
lita
ting a
cces
s to
finance
Provision of equity - Private equity - Venture capital
ADB Clean Energy PE fund
n/a Carbon Trust VC fund
Provision of debt
- Loans - Credit lines
IFIs e.g. EBRD, IFC IMF and WB loans
Risk coverage
- Full or partial guarantee - Policy to cover specific causes of non performance or all - Other financial products
MIGA political risk insurance
WB/IFC Partial Credit and Partial Risk Guarantees
Export credit agency guarantees
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
Mutlilateral Bilateral
Project Country Pro-ject
Country
Gra
nt
Upfront
Operation
Fin
ance
Equity
Debt
Guarantee
Majority of grantsprovided bilaterally
Majority of finance provided with multilateral mechanisms
Matchneedsoflow-carbondevelopment
Carbon revenue• Aviation&shipping• Offsets
• Auction revenue• Risk management
IllustrativeMutlilateral Bilateral
Project Country Pro-ject
Country
Gra
nt
Upfront
Operation
Fin
ance
Equity
Debt
Guarantee
Majority of grantsprovided bilaterally
Majority of finance provided with multilateral mechanisms
Matchneedsoflow-carbondevelopment
Carbon revenue• Aviation&shipping• Offsets
• Auction revenue• Risk management
Mutlilateral Bilateral
Project Country Pro-ject
Country
Gra
nt
Upfront
Operation
Fin
ance
Equity
Debt
Guarantee
Majority of grantsprovided bilaterally
Majority of finance provided with multilateral mechanisms
Matchneedsoflow-carbondevelopment
Carbon revenue• Aviation&shipping• Offsets
• Auction revenue• Risk management
Illustrative
Increasing role for facilitating access to finance?
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
In Support of Programme Implementation and Management
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
NATIONALLY DEFINED & REPORTED
NATIONALLY DEFINED & INTERNATIONALLY REPORTED
INTERNATIONALLY DEFINED & REPORTED
LEVEL OF REPORTING
Contributes to international learning Accountability to cooperation partner
Increased local ownership/participation Tailored to specific requirements
Facilitates benchmarking Ensures difficulties reported Accountability to third parties
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
1. Low-carbon Development Strategy
Capacity Building
Technology Cooperation
4. Reporting
3. International mechanisms
Domestic
International
International Verified
- emission
2. NAMA
Autonomousmitigation action
plan
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
International Support for Domestic Climate Policies in Developing Countries, Climate Policy 9.5
Editor: Karsten Neuhoff
Six case studies explore the domestic drivers and barriers for policies with climate (co-)benefits in developing countries and show that international support can help to overcome these constraints by providing additional resources for incremental policy costs, technical assistance, and technology cooperation to build local capacity.
EDITORIALUnderstanding the roles and interactions of international cooperation on domestic climate policies,
Karsten NeuhoffSYNTHESISUsing intermediate indicators: lessons for climate policy, James CustPolicy targets: lessons for effective implementation of climate actions, Sarah Lester, Karsten NeuhoffA history of conditionality: lessons for international cooperation on climate policy, Maike Sippel, Karsten
NeuhoffCOUNTRY STUDYBrazilian low-carbon transportation policies: opportunities for international support, Haroldo Machado-
FilhoPolicy and regulatory framework for renewable energy and energy efficiency development in Ghana,
William GboneyDomestic climate policy for the Indian steel sector, Umashankar SreenivasamurthyClimate co-benefit policies for the Indian power sector: domestic drivers and North-South cooperation,
Anoop SinghConcentrated solar power in South Africa, Kate GrantChina’s wind industry: policy lessons from domestic government interventions and internationalSupport, Xiliang Zhang, Shiyan Chang, Ruoshui Wang, Molin HuoOUTLOOKTwinning: lessons for a South-North climate policy context, Zsuzsanna Pato
INTERNATIONAL SUPPORT FOR DOMESTIC ACTION
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Climate Strategies aims to assist governments in solving the collective action problem of climate change. It connects leading applied research on international climate change issues to the policy process and to public debate, raising the quality and coherence of advice provided on policy formation.
We convene international groups of experts to provide rigorous, fact-based and independent assessment on international climate change policy. To effectively communicate insights into climate change policy, Climate Strategies works with decision-makers in government and business, particularly, but not restricted to, the countries of the European Union and EU institutions.
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