Jamaica’s CDM Experience and NAMA

ProspectsGerald Lindo

Ministry of Water, Land, Environment and Climate Change (MWLECC)

Jamaica

The Country Context: Small, Vulnerable, Lots of Potential

• Small island state– High vulnerability to climate

change• Energy import dependent

– 91% of energy overall and 94% of electricity fossil fuel based (HFO, Diesel)

– Mitigation potential low, but mitigation options have excellent economics

• Heavily indebted, weak growth

Bullish on CDM…

• The strong impression among policy makers that there were good financing opportunities in “carbon credits”

• Rush of project submissions between 2004-2008• Policies were built with CDM opportunities in mind

– Aug 2008- National Carbon Emissions Trading Policy • Halt to new project registration

– Sep 2008 - Policy Task Force formed @ Ministry of Energy and Mining – Draft Carbon Trading Policy prepared June 2009 – Energy and sub-policies integrated CC considerations

• Gov’t hired a CDM consultant who was made available to the private sector

… until the carbon market bust!

• PoA for utility company designed but abandoned

• Over 20 project submissions led to only 2 projects following through – both by Gov’t entity

• Locked out of ETS, leading to uncertainty• Draft Carbon Trading Policy in limbo

Wigton Wind Farm

• Two projects from 2 expansion phases – Ref: 0239, 5522– Total reductions of 52540 and 40348 T CO2e / year

• ER purchase agreement with CAF ended 2012• Challenge: making verification of latest CERs worth the

transaction costs– Possibilities: Gold Standard; working through Bunge

Emissions Holdings

The lessons: better C prices, capacity, lower transaction costs desired

• Emission reductions projects still have good returns, but benefits of CDM usually marginal to bottom line

• Transaction costs high– Exacerbated by lack of local capacity (all steps of project cycle

require importation of expertise)• Lack of investor confidence in CDM still needs to be

overcome• Policy missteps?

Good news: the fundamental economics and benefits of energy projects that reduce emissions have not changed

0 50 100 150 200 250 300 350 400 450-US$250

-US$200

-US$150

-US$100

-US$50

US$0Se

ries

51

Seri

es49

Seri

es47

Seri

es45

Seri

es43

Seri

es41

Seri

es39

Seri

es37

Seri

es35

Seri

es33

Seri

es31

Seri

es29

Seri

es27

Seri

es25

Seri

es23

Seri

es21

Seri

es19

Seri

es17

Seri

es15

Seri

es13

Seri

es11

Sola

r

Was

te to

ene

rgy

Baga

sse

Win

d

Hyd

ro

Marginal Abatement Cost Curve for Renewable Energy Generation in Jamaica (2015-2030)

Thousands of tCO2e saved/year

$/tC

O2e

1st NAMA(s) will be RE focused

• Draft NAMA prepared in collaboration with OLADE: “Jamaica Renewable Energy Support Programme”

• Pre-existing policy target: 20% of energy from RE by 2030• Analysis of vision, policies, action plans• Barrier analysis• Institutional assessment• EMISSION REDUCTION ANALYSIS• MRV

• Finalization by end of Q4, 2014

NAMAs = mitigation + development + adaptation = Resilience

• Jamaica has a unique opportunity, inasmuch as ANY energy sector reform will likely reduce energy costs while giving SD benefits!– Lower costs– Increased competitiveness

… which equals RESILIENCE!

CDM’s structure and methods brings a discipline and robustness to projects and programmes, which can help us

get the help we need

How about a RAMA?

• To overcome capacity and scale issues, Jamaica is contemplating uniting with regional partners to create Regionally Appropriate Mitigation Actions– Sharing expertise– Larger programmes more

attractive to investors, and have lower transaction costs (same rationale for PoAs)

Thank you!

gerald.lindo@mwlecc.govgerry.lindo@gmail.com

@geraldlindo