What prospect for NAMAs to finance climate action in Asia?
What prospect for NAMAs to finance climate action in Asia?
In this post, Syed Muhammad Abubakar, Knowledge Officer for CDKN Asia highlights CDKN’s efforts to assess NAMAs as an appropriate tool to support the renewable energy solutions for Sialkot, Pakistan and subsequently developing NAMAs. Whereas in Indonesia, it highlights CDKN’s role to support the development of NAMA on energy efficient motors, to facilitate the government in meeting its mitigation targets.
Last year, 195 countries joined hands in Paris to sign the historic Paris Climate Agreement so that they can fight climate change. This year, two biggest polluters of greenhouse gases, China and the United States (US), ratified the Paris Agreement, setting a precedent for other nations to follow. This decision by the world superpowers was made at G20, a global forum for the government and central bank governors from 20 major economies, which was recently held in Hangzhou, China on September 4-5, 2016.
In order to effectively deal with the impacts of climate change, developing countries have made significant efforts, reflecting greater support for the national mitigation actions. This positive trend is occurring due to the availability of mitigation mechanisms and funding options at the international level.
Nationally Appropriate Mitigation Actions (NAMAs) form a mechanism launched in 2007 at the United Nations Framework Convention on Climate Change’s (UNFCCC) 13th Conference of the Parties (COP13) in Indonesia. NAMAs aim to trigger mitigation actions in developing countries, with financial and technical support from developed countries. NAMAs have received a good response from the developing countries, as there are almost 178 NAMAs in the preparatory or implementation stages, and their numbers are increasing.
NAMAs are actions that reduce greenhouse gas emissions in developing countries, relative to ‘business as usual’ emissions, and prepared under the umbrella of a national government initiative.
NAMAs focus on actions that positively impact a sector or economy. They are supported by technology, finance and capacity building.
In 2015, the Climate and Development Knowledge Network (CDKN) was requested by Pakistan's Ministry of Climate Change (MoCC) and the Punjab Power Development Board to assess whether NAMA would be a useful tool to support the renewable energy solutions for Sialkot district, and to subsequently develop NAMAs. The project is being implemented in collaboration with Sialkot Chambers of Commerce and Industry and local export associations for leather, sports and surgical goods.
It is important to know that due to the ongoing load shedding crisis, Sialkot is witnessing load shedding of up to six hours daily and a hike in electricity tariffs of 230 per cent since 2007. Therefore, in order to cater the energy demand, electricity is being produced through diesel generators which not only increase GHGs but also the cost of production.
The project aims to build the understanding of the public and private sectors in Punjab, regarding the potential role of renewables’ and NAMA as a policy tool in catering industrial energy demand; and delivering mitigation and adaptation benefits, such as job creation and environmental conservation. This will be the first NAMA in Pakistan at sub-national level.
The CDKN-supported project to assess NAMA as a policy intervention to provide renewable energy to Sialkot, through initial assessments revealed that using renewables’ for the industrial sector could mitigate up to 377,000 tons of carbon dioxide and lead to average savings of US$ 27,400 annually on electricity costs. The assessments further showed that the electricity produced through diesel generators is 55 per cent more carbon intensive and 50 per cent more expensive than grid electricity. Whereas, Photovoltaic (PV) panels connected to the grid emit no emissions and offer no fuel costs.
The project, at the moment, is in the phase of developing a technically, economically, socially and environmentally viable NAMA that would meet all requirements to mobilise national and international climate finance, to meet the much needed energy demand. [Editor: Readers can explore in depth how the process unfolded in Sialkot, Pakistan in this Inside Story on Climate Compatible Development.]
Similarly in Indonesia, CDKN has supported the development of NAMA on energy efficient motors, to facilitate the government in meeting its mitigation targets. Indonesia’s INDCs submitted to the United Nations Framework Convention on Climate Change (UNFCCC), has committed to reduce its GHG emissions from the BAU levels by 2020, of up to 26 per cent on its own efforts and up to 41 per cent with international support.
Electric motors consume almost half of the world’s electricity and account for two-thirds of electricity consumption in industrial sector, attributing over a quarter of global consumption to this sector alone.
In Indonesia, electric motors consume over 60 per cent of electricity in the industrial and commercial sectors - but there is a great deal of electricity wastage. In order to deal with these issues, the Government of Indonesia and partners have taken many low-carbon energy initiatives, such as the development of NAMAs, to address energy use and emissions in the sector.
The Ministry for Energy and Mineral Resources, CDKN and the Energy Research Centre of the Netherlands (ECN) are working to develop a NAMA to introduce minimum energy performance standards for electric motor systems. Through this project, the selected efficiency measures for electric motor systems implemented worldwide, will be presented to Indonesia, with a focus to highlight the savings potential, policy options, and other benefits of a policy programme. The project aims for raising awareness of the new standards among manufacturers, providing technical support, and enforcing and monitoring uptake.
CDKN is engaging the decision-makers to explore the concept of 'climate compatible development', especially in the energy sector and at the province, district and city levels. CDKN is also extending technical assistance, knowledge and soliciting support for a variety of climate change initiatives in Indonesia.
Shifting to energy-efficient strategies demands adequate planning and coordination. Now that the governments all over the world are promoting climate mitigation in the energy sector, formulation and implementation of effective policies, and developing and implementing NAMAs, ensures a sustainable future.
Picture Courtesy: Abbas Mushtaq, CDKN Asia