Thailand Partnership for Market Readiness (PMR)

A way forward for market-based climate instrument in Thailand’s context

18 January 2015 Hanoi, Vietnam

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Designing the Energy Performance Certificate Scheme (EPC)

Preparing infrastructures (database, MRV system)

Conducting a study on legal framework for ETS

Demonstrating EPC scheme (tentative-next phase)

Promoting communities and municipalities to implement GHG mitigation actions

Preparing Low Carbon City Program (LCC) and Low Carbon City Program Fund (LCC Fund)

To design and initially implement a domestic market mechanism for reducing energy consumption and GHG emissions

WHY PMR FOR THAILAND?

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OBJECTIVES AND CORE INDICATORS

Objectives To provide selected technical and analytical support Thailand that informs policy decisions to develop readiness of market-based instruments to reduce GHG emissions in Thailand

Key Indicators

Submission of the core EPC

readiness components for

DEDE’s policy consideration.

Submission of the legal framework

recommendations

Local GHG Abatement Plans

for 24 cities submitted to city

management

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PMR COMPONENTS

1

Preparation of key market components for the voluntary Energy Performance Certificate scheme

Project Management

4

Policy recommendations on legal framework to establish the Emission Trading Scheme (ETS)

3

Development of Local GHG Abatement Plans and a study on pricing mechanism of the program

2

4

The 11th National Economic and Social Development Plan (NESDP)

2012-2016 To redirect the Country to a low-carbon and environmentally friendly economy

Energy sector : the key driver of economic development & largest GHG emitter.

The 20-Year Energy Efficiency Development Plan (EEDP)

2011-2030

To promote the reduction of energy intensity by 25% in 2030

compared with that in 2010 (23.5% of final energy

consumption in 2030 or 38,200 ktoe)

The 10-Year Alternative Energy Development Plan (AEDP)

2012-2021

To promote the increase of RE share to 25% of final energy

consumption in 2021 (Equivalent to 25,000 ktoe/yr in 2021)

Thailand Climate Change Master Plan 2014-2050

Mobilizing the Country to a low-carbon society by

reducing the GHG emission

POLICY MAPPING

The 11th National Economic and Social Development Plan 2012-2016

Key Measures

• Development paradigm shift towards environmentally-friendly

society & low carbon economy

• Improve ecological efficiency of the production and services towards the environmentally friendly society

• Reinforce urban environment & infrastructure management

• Establish the Voluntary Domestic Carbon Market

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2014 2015 2016 2017 2018 2019 2020

ETS Readiness Preparation

Preparation of Legal

Framework for ETS

EPC Preparation 2015-2017

EPC Demonstration 2017-2019

Preparation for other Components of ETS

Domestic Crediting Mechanism

LCC Preparation 2015-2017

LCC Implementation 2017 onwards

Phase I Phase II

Vision Towards ETS and Low Carbon Society

Outcome from EPC Legal study and other components are crucial element for establishing ETS

Outcomes from LCC are important in achieving Low Carbon Society goal

Requested for partial fund by PMR program

Requested for fund by National Government , International donors and/or others 7

GRANT AGREEMENT SIGNING PROCESS

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Identification stage

Appraisal/ negotiation/ approval stage

Concept stage

Implementation

Thailand Final MRP was approved by the PA at PA8 meeting (March 2014) in Mexico City. Currently Bank is drafting a Grant Agreement for negotiating with Ministry of Finance and TGO The grant agreement needs to be approved by the Cabinet. Expected to get the grant agreement signing in next 2-3 months.

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Study on the city carbon footprint Identify the potential greenhouse gas emission reduction activities. Develop greenhouse gas abatement plan in accordance with local municipality context. Develop the local abatement guideline which included environmental and social management framework. Develop PDD for pilot municipalities. Develop a domestic MRV system and registry system for LCC program. Study on pricing mechanism for LCC - TVERs and incentive options for LCC-TVER buyers. Study on fund structure, including administrative and legal arrangement.

2015 2016 2017

LCC Preparation

LCC

Implementation

.......

Q3 (2015)

LCC

Timeline and activities

Conceptual Design OF CARBON MARKET

Low Carbon City Program under PMR

Activity1 • Study on city’s GHG emission

Activity2

• Identify the potential greenhouse gas emission reduction activities

Activity3

• Develop greenhouse gas abatement plans in accordance with local municipality context

Activity4

• Develop the local abatement guideline which includes environmental and social management framework

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Specific Tasks (1) Study on the city GHG Emission

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• Identify the major of greenhouse gas emission activities within local context,

• Estimate the emission amount of those

activities, and

• Predict the trend of emission in Business as Usual (BAU) case to setup the baseline of each participating municipalities

Specific Tasks (2) Identify the potential GHG emission reduction activities

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• Identify emission potential of each participating municipalities or local communities,

• Suggest the potential abatement activities with appropriate technology solutions

• Arrange consultations on suggested abatement activities with local stakeholders to ensure the sustainable development

Specific Tasks (3) Develop greenhouse gas abatement plan

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• Develop the appropriate greenhouse gas abatement plan for each participating municipalities.

• Conduct the financial analysis of each abatement option to support feasibility assessment the implementation plan and technology selection.

• Prioritize the reduction activities to short-term, middle-term and long-term implementation plan.

• Arrange consultations on abatement plan with local stakeholder to ensure the sustainable development

Specific Tasks (4) Develop the local GHG abatement guidelines which include environmental and social management framework

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• The emission activity classification and the estimation of emission amount,

• Methodology for prediction of Emission Trend in BAU case for setting up city level emission baseline

• The selective criteria for abatement technology with

concerning to the implementation feasibility, environment and social management framework,

• The evaluation criteria of successiveness of abatement implementation.

THANK YOU

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