Contribution of CDM projects to sustainable development

Case Study - Bolivia

Sergio JáureguiConsultant

Santa Cruz, Bolivia, August 2004

Presentation Index

1. Institutional and policy framework2. Procedures for Host-Country Approval for

CDM project activities3. Criteria for host country approval4. Criteria for the characterization of the

contribution of project activities to sustainable development

5. Case studies6. Conclusions7. Recommendations

Institutional and policy framework (1)

Ministry for Sustainable

Development

Viceministry for the Environment (DNA)

NPCC

NCDO

Commission for Project Evaluation

Inter-institutional Commission on Climate Change

1. Environmental policy integrated into National Development Plan (1994) - SD

2. Ratification of UNFCCC - 19943. CC Action Plan – UNFCCC Implementation Plan –

1997/984. Integration of CC policies, NDP, 19995. First National Communication - 20006. NSS - 20017. DNA Designation, 20028. Establishment of NCDO, 20029. Overall, nominally, sustainable development policies

Institutional and policy framework (2)

Procedures for Host-Country Approval (1)

1. Conformity with CDM rules – EB

2. Conformity with national regulation on benefit distribution

3. Clearly defined additionality case

4. Baseline scenario conforms with real trends

5. Sectoral authority approval (written)

6. Clearly defined contribution to SD (argumentative)

7. Stakeholder consultation implemented

Criteria for host country approval

Approval Procedures (1) - If you have a PIN or Project Profile

Project proponent NCDO DNA

Develop PIN

Obtains sectoral

endorsement

Technical advice – Recommendation to

DNA

Continues to develop project

Issues Letter of Interest

Approval Procedures (2) – Submission of a PDD or Developed Project

Project proponent NCDO DNA

Develop PDD

Obtains sectoral

endorsement

Technical advice – Recommendation to

CEP

Submits to DOE

Convenes CEP

Issues Letter of Approval

Overall mitigation potentials [preliminary]

Sector / activity MM tCO2

Electricity in the grid 5.6

Rural Electricity 7.6

Transport 2.5

Other energy uses 1.2

Landfill management 1.0

TOTAL ENERGY SECTOR 17.7

(LULUCF Sector) 80.0

(Total National Potential) 97.7

1. Based on broad criteria and regulatory requirements

2. SD criteria (only guidelines): social, environmental and economic

3. Environmental criteriaa. Reductions of emissions from particulates –

improvement of local air quality

b. Sustainable use of local resources

c. Reduction of the local environmental pressures

d. Effects of environmental impacts on local health

Criteria for definition of SD contribution (1)

4. Social criteriaa. Improved quality of life at the local levelb. Effects on poverty levelsc. Increase of equity levelsd. Respect of local cultures

5. Economic criteriaa. Effects on the local level of incomeb. Effects on the levels of local productionc. Generation of new investmentd. Effective transfer of technology

Criteria for definition of SD contribution (2)

6. Regulatory requirementsa. Contribution to and compatibility with Government

policies (local, sectoral, regional) and compliance with international commitments

b. Fulfillment of regulations and sectoral development plans: property rights; rights over use of natural resources, certificates and licenses; rights of local and indigenous communities

c. Environmental Impact Assessment (EIA)

d. Distribution of benefits derived from the generation of CERs

Criteria for definition of SD contribution (3)

6. Santa Cruz Landfill Gas Project (Flaring)

7. Central Santa Rosa (Reconstruction of a run-of-the-river hydro central)

8. CETEFOR (Afforestation and reforestation in the Chapare region)

Cases for analysis

1. Contributions to SD defined by broad criteria2. Criteria recommended / non-mandatory3. No methodological references for indicators4. No monitoring process for SD impacts required5. A framework needed without compromising

competitiveness nor generating a perception of regulatory barriers

6. Methodologies exist to develop cost-effective instrument

7. Need to tackle issues of potential conflict of interest

Conclusions

1. Establish an operative instrument for fast, cost-effective assessment of SD contribution (verifiers) - RIA

2. Generate a perception among investors that this is a cost-saving tool

3. Devise a standardized methodology to self-define or construct alternative verifiers

4. Develop a cost – effective, random monitoring protocol, based on RIA

5. Finalize development of regulatory framework (including law and technical instruments)

6. Avoid conflict of interests – further detach NCDO from DNA

Recommendations (1)

Recommendations (2) - RIA

Area VerifierPossible Impacts

Mitigation / supervision measures

1. Environment Verifier 1.1.

Verifier 1.2

Others (self – developed)

2. Social Verifier 2.1.

Verifier 2.2

Others (self – developed)

3. Economic Verifier 3.1.

Verifier 3.2

Others (self – developed)