EU nations could double current NAMA funding with new call for projects

Published 11:50 on April 21, 2015  /  Last updated at 11:40 on May 11, 2016  /  International, New Market Mechanisms  /  No Comments

The Germany-UK-backed NAMA Facility on Monday launched its third call for funding by offering €85 million for new projects, which will more than double the worldwide support for the UN-led emission-cutting activities in the developing world.

The Germany-UK-backed NAMA Facility on Monday launched its third call for funding by offering €85 million for new projects, which would more than double the worldwide support currently allocated for the UN-led emission-cutting activities in the developing world.

The third funding round is the facility’s biggest yet, bolstered by a €15 million contribution from the European Commission and €12 million from Denmark.

The cash comes as the NAMA project pipeline is showing signs of slowing amid a massive funding gap. Mexico submitted a new NAMA last week to help green its road transport fleet but no new projects were submitted to the UN’s registry in March, the first blank month since July 2014, according to UNEP DTU agency, which tracks NAMA projects.

The NAMA Facility is almost the only source of funding for NAMAs to date, with $64 million of project support offered out of $73 million. This is dwarfed by the $6.9 billion in support requested by developing countries to implement 90 NAMAs designed to save 242 million tonnes of CO2 by 2020, according to UNEP DTU.

The NAMA Facility invites projects to apply for funding by July 15 via a two-stage selection process, it said in an update on its website.

The support is geared towards helping governments channel capital investments to drive “transformational” change via policies, programmes or projects that help steer poorer nations towards low carbon development.

The approval process is lengthy. In December, the NAMA Facility approved projects under its second funding call from Burkina Faso, Peru, Tajikistan and Thailand from a total of 49 applications.

The projects are expected to undergo appraisal during 2015, with implementation starting between late 2015 and 2016. They are:

  • Burkina Faso – to develop sustainable wood sources to provide stable, cheaper energy access and address a main driver of deforestation.
  • Peru – to develop policies to install new, clean urban public transport networks, upgrade existing fleets, encourage cycling.
  • Tajikistan – to help the government implement its forestry laws to help restore degraded forest areas.
  • Thailand – to develop manufacturing of lower-emitting refrigerators and air-conditioners, as well as policies to help lower emissions of the sector, which currently accounts for around a fifth of Thai greenhouse gases.

 

FACTFILE

WHAT ARE NAMAs?

Nationally Appropriated Mitigation Actions (NAMAs) are a set of emission-curbing policies, strategies or projects that a developing country takes on a voluntary basis in line with its national development objectives.

NAMAs evolved out of the 2009 UN climate conference in Copenhagen whereby richer nations were required to take on emission targets and to help pay for NAMAs in the developing world, though NAMAs also can be undertaken without cash from richer nations.

The lifespan of NAMAs in their current form is intended to be effective to 2020, when a new global climate regime that binds all nations to cut emissions is expected to take effect following a UNFCCC deal in Paris in December 2015.

POTENTIAL CDM RIVAL

The number of countries seeking NAMA funding has rapidly expanded in recent years as investment in new emission reduction projects under the CDM has almost completely dried up due to low prices for the carbon credits the schemes produce.

This trend has led researchers at Wuppertal Institute and Ecofys to say in 2013 that by 2020 emission reductions under NAMAs could eclipse that of the CDM, which analysts predict could be around 2.5 billlion tonnes of CO2 equivalent. Though most NAMAs to date have been policies, which could be harder to measure emission reductions than with projects.

The development of NAMAs is closely related to how much money industrialised nations will pledge to fund the projects, a regular sticking point at U.N. climate talks.

Financial pledges to help countries combat climate change amount to around $10 billion per year from developed country governments over 2010-2012 and slightly lower in 2013, although all nations have said this needs to be scaled up to $100 billion per year by 2020, including contributions from the private sector.

Though yet to emerge, some consultants say NAMAs could lead to new types of carbon market mechanisms if some result in a form of crediting of emission reductions to donor nations or private sector participants.

“Credited NAMAs could be a good introductory phase – and they might as well keep working alongside new market mechanisms once they are launched,” Jozsef Feiler of Budapest-based consultancy Klimapolitika told Reuters in June 2013.

It remains unclear how emission reductions could be attributed to CDM projects or programmes that are ‘nested’ within NAMAs.

NAMAs are widely expected to be a vehicle for funding from the Green Climate Fund, which has a mandate to aim for a 50:50 split between adaptation and mitigation in developing countries.

TRACKING ACTION

The UNFCCC secretariat set up a NAMA Registry in 2013 to encourage countries to submit NAMA information both to recognise action and to help find match finance, technology and capacity-building support.

As of April 1 2015, there are 90 NAMAs in the Registry, including seven unilateral ones not seeking support, according to the UN’s UNEP DTU agency’s NAMA Pipeline.

Just 14 of these NAMAs have received support, which has come from the Germany-UK government funded NAMA Facility, as well as Austria, Japan, Spain, the UN’s Global Environment Facility (GEF).

Yet activity is wider, with 149 NAMAs at least under development in 42 countries as of April 21, according to consultancy Ecofys, which tracks NAMA activity worldwide.

“There is a discrepancy between the energy and enthusiasm countries put into the preparation of NAMAs, and the international support that is made available,” said Ecofys in its annual status report on NAMAs in November 2014.

As of April 1 2015, the total support offered to projects was $73 million, while the requested support was $6.9 billion, according to the NAMA Pipeline. Some $64 million was from the German-UK NAMA Facility, $6 million from the GEF, $2 million from Austria for a forest management NAMA in Georgia and $1 million from Japan for activities in Serbia.

There geographical spread of NAMAs has been much wider than activity under the CDM, which has been heavily concentrated in advancing economies Brazil, China and India. As of November 2014, some 38% of NAMAs were in Latin America, 25% in Africa and the Middle East, 27% in Asia and 12 percent in Europe. 42% of all NAMAs were in the energy supply sector, according to Ecofys.

Researchers at Linköping University claim the “failure”  of the UN NAMA Registry to match funding is partly due to the wariness of proponents of leaking information to competitors and uncertainty over how the voluntary NAMAs will fit into the post-2020 climate regime of compliance, as quoted in the Ecofys annual report.

By Ben Garside – ben@carbon-pulse.com