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CLIMATE MITIGATION in the LEAST CARBON EMITTING COUNTRIES Dilemmas of Co-Benefits in Cambodia and Laos

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CLIMATE MITIGATION in the LEAST CARBON EMITTING COUNTRIES Dilemmas of Co-Benefits in Cambodia and Laos Mira Kknen, Kamilla Karhunmaa, Otto Bruun, Hanna Kaisti, Visa Tuominen, Try Thuon and Jyrki Luukkanen CLIMATE MITIGATION IN THE LEAST CARBON EMITTING COUNTRIES Dilemmas of Co-benefits in Cambodia and Laos FINLAND FUTURES RESEARCH CENTRE FFRC eBOOK 3/2013 1 Fla Ftur R Cntr This e-book has been carried out under the COOL-project (Adequacy of Climate Change Mitigation Ini- tiatives in Laos and Cambodia: Comparing Options and Analysing Obstacles in Local Context), a com- missioned research funded by the Ministry of Foreign Affairs of Finland. All views presented in the text are those by the Research Centre and its team, and do not represent the views of the Ministry. Ctribu h COOL-: Otto Bruun Douangta Buaphavong Hanna Kaisti Kamilla Karhunmaa Mira Kknen Jyrki Luukkanen, jyrki.luukkanen(a)utu.fi Sithong Thongmanivong Try Thuon Ponlok Tin Visa Tuominen Tiina Virta Copyright © 2013 Writers & Finland Futures Research Centre, University of Turku Cover photo: Mira Kknen; Kampot Cement Waste Heat Power Generation Project was the first Clean De- velopment Mechanism (CDM) project in Cambodia that issued certified emission reductions (CERs) success- fully. ISBN 978-952-249-257-9 ISSN 1797-1322 Fla Ftur R Cntr Uiv Turk FI-20014 Univer Trk Visiting address: ElectroCity, Tykistkatu 4 B, 20520 Turku Korkeavuorenkatu 25 A 2, FI-00130 Helsinki Yliopistonkatu 58 D, FI-33100 Tampere Tel. +358 2 333 9530 utu.fi/ffrc | mekong.fi [email protected], [email protected] [email protected] 2 LIST OF ACRONYMS AND ABBREVIATIONS AAU Assigned amount unit ADB Asian Development Bank APCF Asia Pacific Carbon Fund CCX Chicago Climate Exchange CCBA Climate, Community and Biodiversity Alliance CCBS Climate, Community and Biodiversity Standard CCCD Cambodian Climate Change Department CDM Clean Development Mechanism CDM EB Clean Development Mechanism Executive Board CER Certified Emissions Reduction CF Community Forestry CFL Compact fluorescent lamp CFSP Cambodian Fuel-wood Saving Project CLiPAD Climate Protection through Avoided Deforestation Program CO2 Carbon dioxide CRDT Cambodian Rural Development Team DNA Designated National Authority DOE Designated Operational Entity EE Energy efficiency EEP Energy and Environment Partnership EIA environmental impact assessment ELC Economic Land Concession ERU Emissions Reduction Unit ESF Electriciens Sans Frontires ET Emissions Trading ETS EU Emissions Trading Scheme EU FA Forestry Administration FAO United Nations Food and Agriculture Organization FCF Future Carbon Fund FCPF Forest Carbon Partnership Facility FFRC Finland Futures Research Centre FPIC Free Prior Informed Consent GDP Gross Domestic Product GEF Global Environmental Facility GERES Groupe Energies Renouvelables, Environnement et Solidarits GHG Greenhouse gas GNI Gross National Income GS Gold Standard GTZ Deutsche Gesellschaft fr Technische Zusammenarbeit 3 GWP Global Warming Potential Ha Hectare HFC Hydrofluorocarbon ICS Improved cooking stove IGES Institute for Global Environmental Strategies INES Interlinkages between Energy and Livelihoods IPCC Intergovernmental Panel on Climate Change JI Joint Implementation JICA Japan International Cooperation Agency LDC Least Developed Country LDCF Least Developed Country Fund LULUCF Land Use, Land-Use Change and Forestry MAFF Ministry of Agriculture, Forestry and Fisheries (Cambodia) MDGs Millennium Development Goals MEM Ministry of Energy and Mines (Lao PDR) MEE Ministry of Employment and the Economy (Finland) MFA Ministry of Foreign Affairs of Finland MIME Ministry for Industry, Mines and Energy (Cambodia) MLUPC Ministry of Land Management Urban Planning and Construction MOE Ministry of Environment (Cambodia) MRV Measurable, Reportable, Verifiable NAPA National Adaptation Programme of Action NAMA Nationally Appropriate Mitigation Action NBP National Biodigester Program NCU National Coordination Unit (of EEP) NGO Non-governmental organization NKS Neang Kongrey Stove NLS New Lao Stove NRB Non-renewable biomass NTFP Non-timber forest product ODA Official Development Assistance OECD Organisation for Economic Cooperation and Development PCF Prototype Carbon Fund PDD Project Design Document PES Payment for Ecosystem Services PFC Perfluorocarbon PIN Project Idea Note PoA Programme of Activities PRSP Poverty Reduction Strategy Paper RCU Regional Coordination Unit RE Renewable energy REDD Reduction of Emissions from Deforestation and Forest Degradation R-PP Readiness Preparing Proposal 4 SCCF Special Climate Carbon Fund SHS Solar Home Systems SNV Netherlands Development Organization SLRS Solar Lantern Rental System SUFORD Sustainable Forestry and Rural Development Project in Lao PDR tCO2e 1 metric ton of carbon dioxide equivalent TEKES Finnish Funding Agency for Technology and Innovation UNDP United Nations Development Programme UNEP United Nations Environmental Programme UNFCCC United Nations Framework Convention on Climate Change VCM Voluntary carbon market VCS Voluntary Carbon Standard VCU Verified (or Voluntary) carbon unit VER Verified (or Voluntary) Emission Reduction VER+ Verified Emission Reductions (Standard) VOS Voluntary Offset Standard WB World Bank WCS Wildlife Conservation Society WDR World Development Report WREA Water Resource and Environment Administration (Laos) WTE Waste-to-energy WWF World Wildlife Fund 5 CONTENTS 1. INTRODUCTION...................................................................................................................................... 10 1.1 Research context, scope and methodology ............................................................................. 11 1.2 Structure of the book ................................................................................................................ 13 2. WHEN CLIMATE MEETS DEVELOPMENT – AN INTRODUCTION TO CLIMATE POLICIES CARBON MARKETS AND OFFICIAL DEVELOPMENT ASSISTANCE.................................................. 15 Kamilla Karhunmaa, Otto Bruun and Mira Kknen 2.1 Defining “new and additional” climate finance ......................................................................... 17 2.2 Mitigation in the least emitting countries .................................................................................. 20 3. CLIMATE ORIENTED DEVELOPMENT POLICY IN FINLAND: WHAT ROLE FOR MARKET MECHANISMS? ....................................................................................................................................... 22 Otto Bruun and Mira Kknen 3.1 Climate mitigation, carbon markets and ecological modernisation ........................................... 22 3.2 Finnish climate-oriented development policy ........................................................................... 23 3.3 Energy and CDM in development cooperation ........................................................................ 24 3.4 Forest Carbon Mitigation and Finnish Development Policy ..................................................... 27 3.5 The will to mitigate: fostering co-benefits or buying legitimacy for flexible emission credits and export interests? .................................................................................................... 28 3.6 Conclusions ............................................................................................................................ 28 4. THE ENERGY AND ENVIRONMENT PARTNERSHIP IN THE MEKONG REGION: INTEGRATING CLIMATE CHANGE INTO DEVELOPMENT COOPERATION ............................................................... 30 Visa Tuominen 4.1 Introduction .............................................................................................................................. 30 4.2 The Energy and Environment Partnership in the Mekong Region – what is the EEP and how does it work? ............................................................................................................. 32 4.3 Mitigation potential of small scale electrification ...................................................................... 35 4.4 Ownership perspectives in the EEP ......................................................................................... 36 4.5 The win-win approach .............................................................................................................. 39 4.6 Conclusions ............................................................................................................................. 42 5. CDM AND ITS CHALLENGES TO DELIVER TO THE POOR: THE CASE OF CAMBODIA .................. 43 Mira Kknen 5.1 CDM succeeded in taking off but how is it delivering in terms of its twin objective? ................ 44 5.2 CDM projects in the least developed countries ........................................................................ 47 5.3 Cambodia: leading the way for LDCs? .................................................................................... 48 5.4 Sustainable development benefits falling short of promises but still “better than the baseline” ............................................................................................................................ 51 5.5 Development finance, CDM and Cambodia ............................................................................. 55 5.6 Conclusions and future steps ................................................................................................... 57 6 6. VOLUNTARY CARBON MARKET: UNTAPPED POTENTIAL OR RISKY BUSINESS FOR PROJECT DEVELOPERS? ......................................................................................................................59
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