ASIAN INSTITUTE OF TECHNOLOGY
Capacity Development for the Clean Development Mechanism, Phase I
Mission Report (The Philippines)
(20-23 August 2002)
First Draft
Prepared by
Ram M. Shrestha
Energy Program, AIT
October 2, 2002
Bangkok, Thailand
1. Objectives of the Country Mission:
The UNEP project “Capacity Development for the Clean Development Mechanism” funded by the Netherlands government has, in its project preparation phase (Phase I), a major objective of preparing a detailed country specific work plan for capacity development for next three years (2003- 2005) in Phase II of the project. The Philippines has been included as one of the three Asian countries to be covered by the project. The objectives of the mission to the Philippines, were:
a)to identify a national focal point agency;
b)to take stock of past and present activities on CDM, and
c)to assess the need for capacity development.
2. Brief Description of the Mission
The first mission to the Philippines for this project was held during 20-23 August 2002. The team consisted of Dr. M. K. Lee of UCCEE and Prof. Ram M. Shrestha of AIT. Ms. Joyceline Goco, Environmental Management Bureau (EMB) of the Department of Environment and Natural Resources (DENR) was the local contact point during the mission. She and her colleagues provided excellent support in organizing the meetings with various stakeholders and providing necessary logistic support during the country mission.
In the course of the mission, seven different institutions were visited by the team and discussions were held with key people related to climate change in these institutions. The institutions visited were:
Environmental Management Bureau (EMB),
Alternative Energy Development of Philippines (AED),
Asian Development Bank (ADB),
Climate Change Information Center (CCIC),
UNDP,
Department of Energy,
Philippines Network on Climate Change (PNCC)
The Royal Netherlands Embassy.
Besides, there was a meeting with representatives of member institutions of Inter-Agency Committee on Climate Change (IACCC). There was also a meeting with a senior official of Industrial Technology Development Institute (ITDI) and a chairman of Environmental Committee of the Philippine Chamber of Commerce & Industry. The list of stakeholders with whom the team had held discussions, their affiliations and addresses are presented in Appendix 1.
A number of relevant documents were collected by the team during the mission. This are listed in Appendix 2.
3. Summary of Findings/Assessments
(i) On National Focal Point Institution
Three institutions i.e., IACCC Secretariat, CCIC and ITDI were identified as options for national focal point institution of the project based on the strong interest shown by them in the project and their climate change related activities. Of these, it would be preferable to involve both IACCC and CCIC in the project since they have complementary strengths: IACCC has representations in it of most key stakeholders (governmental as well as non-governmental) and has been playing a leading role in national policy formulation on climate change issues. It could play an effective role in policy making process of the government in relation to the eventual setting up of the national CDM authority in the country. It would be difficult to develop a national institutional framework for the CDM without the active participation of IACCC.
CCIC’s main strength lies in its technical expertise and research experience and capability on climate change issues (it has already carried out some studies on GHG emission and other climate change issues). It also has the flexibility and ability to pool necessary resource persons from other institutions. (ITDI is found to be a weaker option as it was told that most of its staffs do not have familiarity with the CDM.)
Therefore, the following roles are suggested for CCIC and IACCC in the project: CCIC undertakes the technical works such as research, report preparation etc. while IACCC carries out the government related activities and awareness raising and consultative activities such as convening meetings and workshops.
It is recommended that in order to ensure effective coordination/execution of the project activities, CCIC be the main contractor to perform the role of the national institution; that is, UCCEE sign a contract with CCIC only. CCIC and IACCC should then enter into a separate contract between themselves. However, both CCIC and IACCC should be made responsible to UCCEE for the final output. Given the heavier responsibility of CCIC, it is also recommended that CCIC receive a higher share of the project budget (say, 65% for CCIC and 35% for IACCC).
(ii) Past and Ongoing Activities related to the CDM
A number of CDM related activities have been undertaken in the Philippines. These include: (i) a UNDP funded Project on “Capacity Building in CDM Activities” which was completed in 2001 by EMB/IACCC, (ii) “Philippines Case Study” was completed earlier this year under the UNIDO project titled “Capacity Mobilization to Enable Industrial Projects under the Clean Development Mechanism”, (iii) Workshop on Promotion of renewable Energy, Energy Efficiency and Greenhouse gas Abatement (PREGA) held in November 2001 in Mandaluyong City, Philippines which has included presentations on CDM.
A project for a study (with one man-month of consultant time) on establishment of operational framework of the CDM in the Philippines is being negotiated to be conducted by Alternative Energy Development (Philippines), Inc with the Netherlands Embassy in Manila.
(iii) On Needs for Capacity Building
Lack of awareness was almost invariably stated to be the major barrier in the implementation of the CDM projects by the stakeholders. Very few people even in organizations like Department of Energy (DOE) know about the CDM, and they know it only superficially. Another main barrier to implement CDM projects is lack of capacity to handle CDM projects. It was also stated that even most banks do not know how to handle the renewable energy and energy efficiency projects which are going to be major focus of the CDM in the energy sector. These suggest the need for different types of capacity building, i.e., from awareness raising programs to technical capacity to assess GHG mitigation to handling the financing issues related to the CDM projects. Keeping in view the overwhelming opinion heard during the mission on the need to raise the awareness of the stakeholders about the CDM, it was strongly felt that a national workshop would not be effective in formulating an appropriate national work plan for the project without a general orientation seminar/workshop on CDM conducted for the key stakeholders before the national workshop. EMB has agreed to organize a one day orientation workshop at the project cost.
(iv) Others
The Philippines is in the process of ratification of the Kyoto Protocol. The ratification is expected by the end of 2002.
4. Notes of Discussion/Meetings with Different Stakeholders
20 August 2002
Environmental Management Bureau (EMB), Department of Environment and Natural Resources (DENR)
Meeting with Ms. Joyceline Goco, Chief, Institutional Coordination and Documentation Section, Environmental Education and Information Division
Head, The Secretariat of Inter-Agency Committee on Climate Change (IACCC)
The meeting started with a brief introduction of the present CDM project by Dr. M.K. Lee. This was followed by a comprehensive presentation on environmental and climate change activities covering legal development, projects/programs and achievements so far in the sphere of climate change in the PhilippinesbyMs. Goco.
EMB has 300 staff working in its central office and has 13 regional offices. Ms. Goco’s Division (i.e., Environmental Education and Information Division) is serving as the secretariat of IACCC.
The chief negotiator on climate change issues belongs to Department of Foreign Affairs (DFA). However, the national policy is formulated through IACCC in which DENR plays the leading role.
Ms. Goco showed great interest in the project and asked about the role of the national focal point in the project. She suggested to discuss the identification of the national focal point institution at the meeting with representatives of IACCC members.
EMB and Development Bank of Philippines are planning to organize a meeting of senior project evaluators of banks on science and policy (national + international ) of CDM, procedures and participation requirements of CDM and some case studies to raise awareness. Eventually, there would also be a similar meeting/workshop organized for project developers.
EMB completed a UNDP funded Project on CDM in 2001.
A comprehensive proposal on development of a National Operational Framework for implementation of CDM in Philippines was to be proposed to the Netherlands Embassy in Manila in August 2002. An initial proposal had included the following issues:
- Determination of national GHG mitigation potential
- Listing of prospective CDM Projects
- Determination of legal, institutional and administrative machinery
However, EMB was advised by the Embassy to focus on institutional framework.
Renewable energy and energy efficiency projects are the main focus of the country for the CDM. Forestry projects are excluded because of the higher uncertainties in the forestry sector.
On the institutional development related to climate change, Philippines has been quite active in that the Inter Agency Committee on Climate Change (IACCC) was set up even before UNFCCC was negotiated. Philippines Council for Sustainable Development (PCSD) established in 1992.
Some legal developments that would have bearings (direct or indirect) on climate change include: Philippines Clean Air act 1999 and New and Renewable Energy Program Act.
Climate change related activities so far include:
-National Communication (prepared by IACC in collaboration with EMB).
-National Action Plan on Climate Change (Adoption of GHG mitigation or avoidance measures (no regret options))
-The country is in the process of ratification. Ratification is expected before the end of 2002.
Past climate change related projects include:
- ALGAS – It has identified a list of initial mitigation options.
- Philippines Climate Change Mitigation Program (PCCMP) funded by the US. The Climate Change Information Center (CCIC) was established under PCCMP.
- UNDP project on Capacity Building in CDM Activities.
- Country Study Program on Climate Change (USAID): It included a study on assessment of vulnerability and adoption measures (conducted by the Weather Bureau).
- GHG Abatement Awards (aided by the US): These are particularly given to energy efficient companies.
- Enabling Activities: These included preparation of initial national communication
Meeting with Dr. Alice B. Herrera:
Chief, Fuels and Energy Division, Industrial Technology Development Institute
Vice President, Energy Management Association of the Philippines (ENMAP).
Dr. Herrera showed strong interest to participate in the project as a national focal point institution on behalf of Industrial Technology Development Institute (ITDI) (an institute under the Department of Science and technology (DOST)). Alternatively, she was proposing Energy Management Association of the Philippines (ENMAP) as a candidate for national focal point institution of the present project.
ITDI is a focal point for GHG Emission Reduction from Industry in Asia and Pacific (GERIAP) activity of UNEP funded by Sida. It has also been serving as a collaborating national research institute (NRI) for the small and medium industries (SMI) project of the Asian Regional Research Programme on Energy, Environment and Climate (ARRPEEC). ITDI activities also include energy audit and provision of technical services to industries.
ITDI has several Divisions including Environment Division as well as Fuel and Energy Division. Its professional manpower is mainly in the technical fields of agricultural and mechanical engineering. Dr. Herrera’s Division in ITDI (i.e., Fuels and Energy Division) is staffed with 20 researchers and can work with the Environment Division.
Dr. Herrera has, in her personal capacity, served as the national expert and country focal point for the CDM Project of United Nations Industrial Development Organization (UNIDO) entitled “Developing National Capacity on Industrial CDM”. A report entitled “Capacity Mobilization to Enable Industrial Projects under the CDM” has been prepared as an output of that project. However, looking at the institutional capability of ITDI, she seems to be the only person in ITDI who is engaged in CDM activities.
ENMAP is a private organization whose members include people from industry and equipment suppliers. According to Dr. Herrera, ENMAP is promoting CDM through training programs on energy efficiency and climate change.
21 August 2002
Alternative Energy Development (AED) Philippines Incorporated– (an affiliate of AED in the US)
Meeting with Ms. Laurie B. Navarro, President, AED, Philippines.
AED’s main business area is to develop projects in renewable energy and energy efficiency projects.
AED is to conduct a study on establishment of a national CDM authority for UNDP. The study is being funded by the Netherlands Embassy in the Philippines. The study (with one man-month of consultant time) is to start soon. Its objectives are to develop a national operational framework for CDM (establishment of a NCA (National CDM Authority being a part of the framework) and to develop awareness among the stakeholders and get their inputs to the development of framework. The first step will be to look at other countries’ experience.
According to Ms. Novarro, barriers to a CDM Authority include the following:
-Lack of awareness about CDM in the government (both at senior and working level) is a major barrier
-Lack of information
-Capacity to develop CDM projects
However, no political barrier is expected.
Development Bank of Philippines (DBP) is undertaking several investments in renewable energy and energy efficiency projects e.g., Solar PV for rural electrification, Biomass, Hydropower, Solar water heading (for commercial installment)
A CDM seminar is being organized for representatives of DBP and DOE tentatively in September or October 2002.
Asian Development Bank (ADB)
Meeting with Mr. Aminul Huq,
Mr. Huq briefed about the recently established Renewable Energy, Energy Efficiency and Climate Change (REACH) program. The program is being administered by the Asian Development Bank (ADB) is funded by three trust funds i.e.,
Netherlands Cooperation Fund for Promotion of Renewable Energy, Energy Efficiency and Greenhouse Gas Abatement (5 M$),
Canadian Cooperation Fund for Climate Change (3.2 M$) and
Danish Cooperation Fund (3.5 M$).
REACH has two components: One of them deals with development of renewable energy technology (RET) and energy efficiency improvement (EEI) programs while the other is focussed on capacity building in such areas as GHG emission assessment, appraisal of renewable energy (RE) projects and as to how to pursue RE and EEI policies. The latter component is handled by the program on Promotion of Renewable Energy, Energy Efficiencyand Greenhouse Gas Abatement(PREGA).
REACH is indirectly related to CDM. The program is to finance the projects that would generate emission reductions (ERs) in ADB developing member countries. The program is trying to enter into arrangement with someone ready to purchase ERs.
Asian Development Bank (ADB)
Meeting with Dr. Bindu N. Lohani (Secretary of the ADB), Mr. Nessim J. Ahmad, Dr. Richard S. Ondrick, Dr. Sujata Gupta and Mr. Aminul Huq
The discussion covered wide ranging issues of climate change including the roles of GEF versus CDM. Questions were raised as to how a national CDM Authority (NCA) could be established and its structure.
The three Asian countries included in this project are also covered under the REACH program.
Dr. Lohani expressed the view (and other ADB members agreed) that there could be many complementarities between the activities of the present project and that of the ADB’s PREGA/REACH programs.
Inter-Agency Committee on Climate Change (IACCC)
Meeting with Representatives of IACCC Member Institutions
IACCC includes representatives of key stakeholders from the government as well as non-governmental organizations related to climate change: e.g.,
Department of Environment and Natural resources (DENR)
Department of Science and Technology (DOST)
Department of Energy (DOE)
Department of Foreign Affairs (DFA)
National Economic Development Authority (NEDA)
Philippine Network on Climate Change (PNCC) -- a NGO
Department of Transport and Communication
Department of Public Works and Highways
There were ten (10) participants belonging to various member institutions of IACCC in the meeting: Three of them were from Climate Change Information Center (CCIC), two from PAGASA, two from Environmental Management Bureau (EMB) and one each from DFA, DOE, and PNCC.
Dr. M.K Lee gave a brief presentation on the CDM and the present project. All participants showed strong interest in the project.
A number of questions were asked by the participants following the presentation. The questions were mainly of technical and operational nature and ranged from whether there was any formula to calculate the level of carbon sequestration through plantation to those related to setting baselines. Some participants were particularly interested to know if there were guidelines available to establish baselines at different levels (i.e., project-wise, sector-wise as well as national level).
A participant from DOST expressed the view that the national focal point institution for the present CDM capacity building project should be one from among those who are familiar with the Philippines stand on Climate Change. A participant from CCIC informed about the capability of CCIC and expressed that CCIC could be considered as a candidate for national focal point institution for the project.
22 August 2002
Asian Development Bank
Meeting with Mr. W. M. Pim Kieskamp.
Mr. Kieskamp mainly explained about the Renewable Energy, Energy Efficiency and Climate Change (REACH) program.
The REACH program was established in January 2002. It has three funding components:
PREGA (funded by the Netherlands): PREGA is mainly for capacity building. However, it is also looking at financing mechanisms as well as regulations/policies for RE and EE projects. It is also discussing the establishment of NCA with participating countries.
Canadian Cooperation Fund (CCF): A Technical Assistance project on GHG abatement in China has already been approved . ?and India + Carbon Sequestration in Indonesia + Adaptation in Pacific islands
Danish Cooperation Fund (DCF): Renewable Energy Efficiency in rural areas for environment of less than $2500.