fbpx 49270-001: Supporting Low Carbon Development in Asia and the Pacific through Carbon Markets | Asian Development Bank

Regional: Supporting Low Carbon Development in Asia and the Pacific through Carbon Markets

Sovereign (Public) Project | 49270-001 Status: Closed

The knowledge and support technical assistance (TA) will support the further development of greenhouse gas (GHG) emission monitoring, reporting, verification (MRV) and accounting capacity in select developing member countries (DMCs) to enhance DMC's readiness to take advantage of emerging carbon market mechanisms under Article 6 of the Paris Agreement.

The TA is not included in the current COBP or RCOBP. It is included in the SDCC pipeline for 2018 .

Project Details

Project Officer
Duggal, Virender K. Sustainable Development and Climate Change Department Request for information
Country
  • Regional
Modality
  • Technical Assistance
Sector
  • Multisector
 
Project Name Supporting Low Carbon Development in Asia and the Pacific through Carbon Markets
Project Number 49270-001
Country Regional
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9062-REG: Supporting Low Carbon Development in Asia and the Pacific through Carbon Markets
A.T.F. - Finnida Grant US$ 1.43 million
Government of Luxembourg US$ 67,942.98
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Sector / Subsector

Multisector / Multisector

Gender Equity and Mainstreaming No gender elements
Description

The knowledge and support technical assistance (TA) will support the further development of greenhouse gas (GHG) emission monitoring, reporting, verification (MRV) and accounting capacity in select developing member countries (DMCs) to enhance DMC's readiness to take advantage of emerging carbon market mechanisms under Article 6 of the Paris Agreement.

The TA is not included in the current COBP or RCOBP. It is included in the SDCC pipeline for 2018 .

Project Rationale and Linkage to Country/Regional Strategy

The Paris Agreement (PA), which was adopted in December 2015 and came into force on 4 November 2016, sets out the long-term goals for all Parties to limit the global temperature increase to well below 2oC, while pursuing a 1.5oC target. The agreement provides new momentum for addressing climate change. As of now [169] Parties have communicated their nationally determined contributions (NDCs), expressing their commitment towards achieving the PA's goals. NDCs will be central to achieving the less than 2oC target, representing a commitment by Parties to pursue climate actions that are country-driven within the framework of national priorities, circumstances, and capabilities. The bottom-up approach gives Parties the autonomy to develop their own strategies, including identifying the most appropriate mix of policy options for achieving the ambitions articulated in their NDCs. To date, approximately 90 of the [169] Parties that have submitted their first NDCs have indicated their interest in using market mechanisms to reach their respective GHG emission reduction targets.

Article 6 of the PA provides three approaches for Parties to voluntarily cooperate in meeting their NDCs: Article 6.2 allows Parties to cooperate bilaterally and transfer mitigation outcomes through the use of "internationally transferred mitigation outcomes" (ITMOs) ; Article 6.4 establishes a new mitigation and sustainable development mechanism, to generate emission reductions which could be traded in international carbon markets ; and Article 6.8 provides for the use of _non-market based approaches_ for cooperation between Parties. Article 6 provides flexibility for Parties and creates a framework for future carbon markets. Environmental integrity, including the avoidance of double counting, and a contribution to sustainable development are key principles of Article 6.

In parallel with cooperative approaches Parties are using, or actively considering, domestic market-based instruments as part of their strategy to achieve their NDC ambitions. These can include carbon pricing instruments, such as emissions trading, or a carbon tax, and sector specific market-based instruments such as energy efficiency or renewable energy schemes.

The bottom up approach of the PA results in a largely decentralized climate change architecture. Ultimately, the blend of domestic policy options and cooperative approaches could lead to interlinked carbon markets bilaterally, regionally, or internationally, allowing Parties to seek maximum efficiency in achieving their NDCs.

The ongoing global climate negotiations, mix of existing and emerging mechanisms, and the complexity of potential domestic policy options present significant challenges for DMCs. The picture of the market-based instruments available for Parties under Article 6 of the PA is becoming clearer, with the Paris rulebook expected to be adopted at the next Conference of Parties meeting (COP 24) in December 2018. However, the details are not yet elaborated, and concrete opportunities will take time to materialize. This means the types and scale f incentives for GHG reduction activities in DMCs are uncertain.

Many DMCs' climate change and green growth policies are in the early stages and much has changed since countries first developed their NDCs ahead of the 2015 climate negotiations. NDCs are a new instrument and DMCs need to develop the capacity to evaluate and decide on the appropriate policy approach in order to develop a roadmap for implementing their NDC. The NDC process also commits DMCs to put forward increasingly ambitious NDCs over time meaning DMCs need to track progress against their targets and determine whether more ambitious reductions are feasible .

During this period of transition, practical assistance should be given to DMCs to build capacity to design and implement their approach for realizing their NDC ambitions. This includes assistance to develop and implement domestic market mechanisms and/or to be ready to actively participate in emerging market mechanisms under Article 6 if these part of their proposed NDC approach. In addition to achieving emissions reductions towards national goals, market mechanisms are an important way to access potential future financing to fund emission reduction activities within DMCs.

Impact Participating DMCs in Asia and the Pacific effectively transitioned to low-carbon growth.
Project Outcome
Description of Outcome Knowledge, understanding, and use of existing and new carbon markets and mechanisms by DMCs enhanced
Progress Toward Outcome Conducted capacity building activities and provided technical support to DMCs on existing and new carbon markets and mechanisms.
Implementation Progress
Description of Project Outputs

1. Development

and

implementation

of domestic

emissions

trading

schemes and

their linkages

facilitated

2. Development of

initiatives and

programs in

DMCs for new

carbon markets

and mechanisms

enhanced

3. Stakeholder's

capacity to

manage CDM

projects and

access to CDM

tools in DMCs is

enhanced

Status of Implementation Progress (Outputs, Activities, and Issues)

Output 1: Development and implementation of domestic ETSs and their linkages facilitated.

ADB provided technical and capacity development support to the Thailand Greenhouse Gas Management Organization (Public Organization) (TGO) on the design of Thailand's ETS including: developing a framework for policy decisions, identifying the most promising design options, and preparation of a roadmap for developing a domestic ETS in Thailand.

ADB, in partnership with the International Carbon Action Partnership (ICAP), established an Emission Trading Scheme Knowledge Sharing Platform (ETS-KSP) in 2016 to support the development and linking of domestic ETSs in the Asia Pacific region. The ETS-KSP is a platform for key policy makers and stakeholders to interact periodically to exchange knowledge and learn from each other's experiences in developing or administering their respective ETS. A total of one webinar and four in-person meetings have been conducted to date in Viet Nam, Thailand, India and Japan.

ADB is also supporting the development of a knowledge product on the design and implementation of the ETS in the Republic of Korea (ROK). It will assess the challenges encountered in implementing an ETS in ROK, measures adopted to overcome such challenges, and opportunities for the use of international offsets including those created under Article 6 of the Paris Agreement. ADB also organized a capacity development workshop in Beijing on the key issues related to the design and operation of PR China's national ETS.

Output 2: Development of initiatives and programs in DMCs for new carbon markets and mechanism enhanced.

ADB is supporting the Ministry of Natural Resources and Environment, Government of Viet Nam in strengthening the robustness of its national GHG inventory database as a building block for participation in new carbon markets/mechanism. The scope of assistance also includes capacity enhancement for the line ministries in the identification of type of data required to build the inventory, data collection methodologies, and learning from other countries; and enhancing the capacity of selected economic players. Assistance will be delivered through a series of three workshops, for key stakeholders from line ministries covering some of the country's most important sectors, including energy production and key industrial processes. The first workshop was held in June 2018. The remaining two workshops are scheduled to be held in October and November 2018.

As part of its activities under the Nairobi Framework Partnership, ADB has collaborated with the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat, the Institute for Global Environmental Strategies (IGES), and the Global Green Growth Institute (GGGI) for the Asia Pacific Carbon Forum (APCF) held in Jeju Island, Republic of Korea in September 2016. ADB also collaborated with the UNFCCC, United Nations Economic and Social Commission for Asia and the Pacific, International Emissions Trading Association, IGES, UNEP-DTU Partnership, UN Environment, and the United Nations Development Program for the organization of the Asia Pacific Climate Week 2017 held in Bangkok in December 2017 and the Asia Pacific Climate Week 2018 held in Singapore in July 2018.

A regional workshop on new carbon market mechanisms in Asia and the Pacific was held in Bangkok, Thailand in November 2016. The workshop raised awareness and enhanced the technical capacity of more than 56 carbon market experts, regulators, and practitioners on the role of carbon pricing instruments for achieving ambitions under Nationally Determined Contributions (NDCs) and their respective economic implications; building institutional infrastructure and stakeholder outreach; and designing registry and reporting systems. A regional workshop was held in Hanoi, Viet Nam in August 2017, attended by around 70 participants from the government and private sector, to enhance their expertise to pursue emerging market-based opportunities.

ADB is extending support to enable DMCs to contribute to the development and, when appropriate, implementation of new carbon markets under Article 6 of the Paris Agreement. This includes supporting DMCs to assess how activities under Article 6 can contribute to accomplishing the ambitions in their respective nationally determined contributions and raising these ambitions in the future. In March 2018, ADB organized a regional capacity development workshop on Article 6 in Manila in March 2018. This was followed by the publication of a knowledge product _Decoding Article 6 of the Paris Agreement_ in April 2018, which examines options for establishing guidance, rules, and modalities for the key elements of Article 6, decoding issues such as internationally transferred mitigation outcomes, environmental integrity, double counting and corresponding adjustments. Building on this momentum, ADB organized a round table discussion among some of the international negotiators for Article 6 in Bangkok on 31 August 2018.

ADB is a founding member of the Multilateral Development Bank (MDB) Working Group on Article 6 and is contributing to discussions among MDBs on a coordinated approach about developments on mechanism(s) under Article 6. In this context, ADB contributed to a side event organized by MDBs at the Innovate 4 Climate conference held in Frankfurt in May 2018 and at the Asia Pacific Climate Week held in Singapore in July 2018.

Output 3: Stakeholders' capacity to manage CDM projects and access to CDM tools in DMCs is enhanced.

ADB is providing technical and capacity development support to ten (10) CDM projects in monitoring, reporting and verification (MRV) of relevant parameters towards generation and issuance of Certified Emission Reductions (CERs) and inflow of carbon finance to such CDM projects. A total of 112 CDM stakeholders from Bhutan, Fiji and the Philippines have been trained through a series of workshops on CDM MRV, to effectively manage their CDM projects towards generation and issuance of Certified Emission Reductions (CERs). The most recent workshop held May 2018 at ADB HQ was organized in cooperation with the Environmental Management Bureau of the Department of Environment and Natural Resources (EMB-DENR), Government of the Philippines; and the UNFCCC-Regional Cooperation Centre (RCC) Bangkok. It also included a session on Article 6 of the Paris Agreement and the associated developments in the context of the CDM.

ADB has provided technical support to the Department of Environment and Natural Resources (DENR), Government of the Philippines and the relevant line departments for the calculation of grid emission factor(s) (GEF) for the electricity grid(s) in the Philippines and to enhance institutional capacity for its periodic update in the future. A tool to calculate the GEF has been made available to the DENR and relevant line departments and a training session for representatives from the Electric Power Industry Management Bureau and Energy Policy and Planning Bureau of the Department of Energy (DOE) and Climate Change Office of the EMB-DENR was held on 15 May 2018. The GEF calculated using this tool will be made publicly available soon.

As of 14 September 2018, the total committed amount is $1,277,902 (85%), of which $943,042 (74%) has been disbursed. The uncommitted balance stands at $222,098. This balance will be utilized for the engagement of additional consultants and planned capacity building activities for the rest of the TA implementation period. It is expected that 100% of the funds will be committed by the end of 2018.

Geographical Location Regional
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design

ADB will be the executing agency for the TA. The Sustainable Development and Climate Change Department (SDCC) will be the TA supervising unit. The TA will be implemented over 24 months, beginning in January 2016 until December 2017.

The TA completion date was extended on 23 June 2017 by a period of twelve months from 31 December 2017 to 31 December 2018. The extension was done to provide continued support for DMCs actively working on developing domestic carbon market mechanisms which were still at their nascent stage by the end of 2017. The TA extension allowed ADB to continue supporting DMCs in facilitating the development and implementation of domestic ETSs and their linkages, enhance their capacity for developing initiatives and programs for new carbon markets and mechanisms, and enhance the capacity and build on the experience of Clean Development Mechanism (CDM) stakeholders in managing CDM projects.

During Project Implementation

The TA will finance consulting services, workshops, training programs and report preparation. TA activities will be implemented with the help of national and international consultants. The SDCC staff will interact with ADB's operations departments as required and the team will coordinate with regional departments during implementation of the TA to ensure that the TA complements their current and planned efforts to support the national climate change priorities of DMCs. The team will also work with partner organizations in supporting DMCs to accomplish their capacity development objectives. As the TA is time-bound and has limited financial resources, ADB will ensure that the TA complements other stakeholders' capacity building activities in DMCs. Lessons learned will be accessible to interested parties internally and externally to facilitate and support future capacity development efforts.

Materials and equipment to implement the TA will be procured following ADB's Procurement Guidelines (2010, as amended from time to time).

The implementing Project Officer will serve as Team Leader to coordinate all inputs from all consultants under this TA.

Business Opportunities
Consulting Services

International Consultants

1. Carbon Market Experts

2. Emission Trading Schemes Experts

National Consultants

1. Carbon Market Experts

2. Emission Trading Schemes Experts

3. TA Coordinator

4. Administrative Assistant

Procurement The TA will require about 36 person-months of international consulting services and 90 person-months of national consulting services. Consultants will be recruited individually, in accordance with the Guidelines on the Use of Consultants (2013, as amended from time to time). To implement the TA successfully, a team of SDCC staff will manage consultants and consolidate their outputs.
Responsible ADB Officer Duggal, Virender K.
Responsible ADB Department Sustainable Development and Climate Change Department
Responsible ADB Division SDCD
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Timetable
Concept Clearance 19 Oct 2015
Fact Finding -
MRM -
Approval 18 Dec 2015
Last Review Mission -
Last PDS Update 07 Nov 2018

TA 9062-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
18 Dec 2015 - 18 Dec 2015 31 Dec 2017 31 Dec 2018 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 1,500,000.00 0.00 0.00 0.00 0.00 1,500,000.00 18 Dec 2015 1,286,903.27

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Carbon Market Expert Individual - Consulting Closed 27 Jul 2018 02 Aug 2018
Technical Assistance Coordinator Individual - Consulting Closed 06 Jul 2018 12 Jul 2018
Administrative Assistant Individual - Consulting Closed 30 Jun 2018 06 Jul 2018
Administrative Assistant Individual - Consulting Closed 01 Mar 2018 07 Mar 2018
Carbon Market Expert Individual - Consulting Closed 15 Feb 2018 21 Feb 2018
Carbon Market Expert (IND) Individual - Consulting Closed 03 Dec 2017 09 Dec 2017
Carbon Market Expert Individual - Consulting Closed 10 Oct 2017 16 Oct 2017
Administrative Assistant Individual - Consulting Closed 06 Oct 2017 12 Oct 2017
Carbon Market Expert Individual - Consulting Closed 13 Jul 2017 19 Jul 2017

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.