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Trading Carbon : November 2011
32 SPECIAL REPORT LATIN AMERICA NAMAs (Nationally Appropriate Mitigation Actions) has become a buzz word -- at least in progressive, developing economies -- for the transition to a more comprehensive approach to reduce greenhouse gas (GHG) emissions from project-based efforts. It envisages developing countries setting and working towards an "appropriate" voluntary emission reduction target, and allowing the international community to monitor the process and progress to the goal. The overarching objective is to promote low-carbon scenarios, while keeping a focus on sustaining and increasing economic growth, improving social benefits and the profitable participation of the private sector. NAMAs are also seen as an alternative and additional channel to finance emission reductions, which are flexible enough to be scaled from "city-to-state-to-country". The concept of NAMA was first introduced into the international UN negotiations through the 2007 Bali Action Plan and gained more traction after the 2009 UN climate change talks in Copenhagen. Developing countries submitted pledges for reducing GHG emissions using NAMAs as part of the Copenhagen Accord, pledges that were re-affirmed under the Cancun agreements a year later. The level of support expected from the international community for the development of NAMAs varies from country to country. However, all developing countries expect some financial contribution from industrialised countries in order to help reach the targets. There are different ways in which the international contribution can take place, depending on the type of NAMA. Unilateral NAMAs are mitigation actions taken domestically and implemented unilaterally. Supported NAMAs are actions taken by developing countries supported by finance, technology and capacity building from developed countries. And credited NAMAs are partially or fully financed by the revenue accrued from the sales of carbon offsets generated by the mitigation actions. Only supported and credited NAMAs represent opportunities to channel investments to reduce GHG emissions in developing countries. In order to ensure accountability and transparency, the UN has conditioned the provision of international NAMA financing to monitoring, reporting and verification (MRV) requirements. In the case of unilateral NAMAs, host countries are subject to domestic MRV systems, but are committed to report the achievements every two years to the UN Framework Convention on Climate Change. Supported NAMAs will be subject to international MRV procedures. UN agreements, so far, do not mention credited NAMAs, but the language does not preclude them either. The request for international assistance to develop supported NAMAs should be formalised through the NAMA registry. This is a central body that will receive all the applications for funding and NAMA proposals from the developing countries and match them with the funding available from developed countries. The registry is an essential instrument to ensure accountability and coordination of efforts. It will be the interface between developing and developed countries and will enable the international community oversight of the whole process. The registry is also important from a financing perspective. Any investor, from the public or private sector, requires transparency, accountability and consistency when allocating capital to an investment option. The second reason for the NAMA registry being the central coordinating body for international investments is to attract the private sector. It is well known that the resources necessary to finance mitigation and adaption actions are huge, and the public sector alone will not be able to mobilise all the necessary capital. Private sector funding will not be channelled into the NAMA registry process directly. Instead, it will be channelled to the specific NAMA initiative/s being developed in each of the registered host country. Therefore, it is in the interest of governments and the international community to design and str ucture what could be attractive for the private sector so that they can be actively engaged in mitigation initiatives towards wider benefit. Below we illustrate our initiative to conceptualise a NAMA within the housing sector for the government of Mexico. The concept is being further developed towards implementation so that a pilot project can be exercised. NELSON SAM AND FERNANDA GUSMAO OUTLINE AN OPPORTUNITY FOR A NATIONALLY APPROPRIATE MITIGATION ACTION IN MEXICO The aim of the Mexico housing NAMA is to enhance and expand current initiatives November 2011 www.pointcarbon.com AnAlternative
December - January 2011