GRM 2010 GRM 2011

Abstract Details

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The role of CDM and NAMAs to promote greenhouse gas reductions in the GCC
Paper Proposal Text :
GCC countries have a substantial potential or low-cost greenhouse gas reduction both in energy supply and demand. To date however, the participation of GCC countries in the Clean Development Mechanism (CDM) of the Kyoto Protocol has been limited; the GCC has a market share of less than 1%. The CDM allows to generate revenues from the sale of emission reduction credits to industrialized countries; prices per t of CO2 have oscillated between 4 and 25 €. Reasons for this low participation are due to high revenues from fossil fuel sales that dwarf CDM revenues as well as late establishment of the required institutions.
In the post-2012 climate policy system, nationally appropriate mitigation actions (NAMAs) and new, sectoral market mechanisms will compete with the CDM. The CDM has the advantage that a lot of experience has been gathered while the setup of the new market mechanism will take several years. The paper will discuss the potential for low-cost greenhouse gas mitigation in the GCC region and discuss how \"integrated carbon finance” could mobilize large-scale reductions in the run-up to 2020. The Qatar Conference of the Parties to the UNFCCC in late 2012 should be used as a showcase for NAMA pilot activities.
A case study on demand-side energy efficiency for Saudi Arabia will assess the potential, discuss barriers to development of CDM projects and programmes and provide a blueprint for the harnessing of CDM and new mechanism financing, as well as the mobilization of funds through the export of fuel saved. As only credits from CDM projects and programmes registered before 2013 will likely generate credits accepted by the main buyers in the EU, CDM programmes can serve as stepping stones towards NAMAs. Considering the emissions mitigation costs of each technology option, domestic financing, which is later recouped through the sales of oil freed for export should be provided for negative or very low-cost options unlikely to be accepted under the market mechanisms. For this purpose, a “King Abdullah Energy Efficiency Fund” (KAENEF) could be introduced. Measures with costs up to the price of emissions credits could be financed exclusively through revenues from market mechanisms, whereas more costly measures could be financed through integrated carbon finance combining grants from KAENEF and revenues from market mechanisms. Integrated carbon finance should stop where the benefit from the sale of emissions credits and export of saved oil becomes smaller than the cost of the measure.
The lessons from the case study will be used to derive a blueprint for NAMAs in the GCC, taking into account barriers encountered in the CDM. In the long run, NAMAs can become a key way of generating emission credits that can be banked for eventual future emission commitments of GCC countries after 2020; they can be a crucial component of bending the emissions paths of GCC countries downwards. The NAMA blueprint takes into account the international discussions on the design of the new market mechanism. Moreover, a concept for showcasing these concepts at the Qatar conference aimed to harness technical assistance will be developed.