MINISTRY OF NATURAL RESOURCES AND ENVIRONMENT, MALAYSIA IMPLEMENTING MALAYSIA’S 40% INTENSITY REDUCTION INDICATOR: THE KEY ROLE OF THE PRIVATE SECTOR MPMA Sustainability Conference September 3, 2013 Tropicana Golf and Country Club Dr. Gary W. Theseira ENVIRONMENT MANAGEMENT AND CLIMATE CHANGE DIVISION
Outline What the 40% Intensity Reduction Indicator is (and isn’t) Rationale and Context of the Indicator Role of Benchmarking – the EU benchmarking system The Malaysian concept of NAMAs MYCarbon Voluntary National Corporate GHG Reporting Programme Concluding thoughts 2
Malaysia’s Voluntary Indicator Announced “ voluntary reduction of up to 40% in terms of carbon emission intensity of GDP by the year 2020 compared to 2005 levels.” “….conditional on receiving the transfer of technology and finance of adequate and effective levels from Annex 1 countries” “We remain committed to ensure at least 50% of our land area remain as forests as pledged in the Rio Summit. Currently our natural forests and agriculture crop plantations combined cover 75% of the country’s land area.” Prime Minister YAB Dato’ Sri Mohd. Najib bin Tun Abdul Razak at the 17 th December 2009, during his address to the 15 th Conference of the Parties to the UNFCCC 3
Rationale: Political Bandwagon? Unilateral Altruism? Objective: Affirmation of the Centrality of the Convention All decisions in accordance with the Principles, Procedures and Annexes of the UNFCCC Timing and Venue – COP 15 Objective to forge an agreement to implement the Bali Action Plan (BAP) Voluntary nature of the indicator – Distinction between Articles 4.1 and 4.2, 4.3, 4.4 Article 4.1- Commitment to formulate and implement programmes containing measures to mitigate climate change Article 4.2 – Shall take mitigation measures by limiting anthropogenic emissions Articles 4.3, 4.4 and 4.5 – Provide New and Additional Finance, assist Adaptation, Transfer Technology 4
Rationale: Is there a back door? Are we being disingenuous? Caveats on financing and technology transfer relate to Article 4.3 Agreed full costs for actions under Article 12.1 Agreed full incremental costs for actions under Article 4.1 Transfer of Technology for actions under Article 4.1 ‘Up to’ 40% - to highlight Article 4.7 – The extent to which developing country Parties will … implement their commitments … will depend on the … implementation by developed country Parties of their commitments … to financial resources and transfer of technology … take … into account that economic and social development and poverty eradication are the first and overriding priorities of the developing country Parties. 5
The rationale for adopting the voluntary index Index measures emissions intensity with respect to whatever is in the denominator For GDP – a measure that indicates the level of decoupling of emissions from economic development Intensity of GDP Tends to be low in countries with low HDI due to low GHG emissions Tends to be high in rapidly developing countries, newly industrialized countries, and oil-producing countries due to energy demand and unrealized efficiencies Tends to be low in wealthy and progressive developed countries due to wealth generation, high efficiency and low- GHG energy sources 6
But what is “emissions intensity of GDP” anyway? emissions emissions GDP GDP GDP emissions time time time INTENSITY INTENSITY INTENSITY time time time 7
What are potential intensity reduction scenarios Business as Usual (BAU) Best case Nominal case INTENSITY Worst case 40% Intensity Reduction Indicator 2013 2020 2005 8
What are the implications of the possible outcomes? Achieve – not assisted Achieve – assisted • Inconsistent with the Convention • Consistent with the Convention • Indicator not sufficiently ambitious • Meaningful finance, technology • Malaysia sufficiently developed – no transfer and capacity building further assistance required received • Favourable economic conditions • Favourable economic conditions • May trigger stringent ADP • May trigger stringent ADP commitments commitments Don’t achieve – not assisted Don’t achieve – assisted • Consistent with the Convention • Inconsistent with the convention • Meaningful finance, technology • Insufficient or ineffectual finance, transfer and capacity building not technology transfer and capacity forthcoming from developed building countries • Unfavourable economic conditions • Unfavourable economic conditions • May result in more measured ADP • May result in more measured ADP commitments commitments 9
The nature of other voluntary pledges Of 154 developing countries, 85 associated or supported the Accord; 37 submitted Nationally Appropriate Mitigation Actions Voluntary intensity reduction pledges have been announced by China (40-45%) and India (20-25%) relative to 2005 levels Other developing countries have pledged absolute percent reductions, but relative to a theoretical/modeled BAU scenario All baselines, reference levels and BAU scenarios are nationally defined and implemented All include conditional elements involving enhanced mitigation ambition by developed countries, financial assistance and technology and transfer. 10
GDP Generated Per Ton of Emissions – Comparison of Malaysia with the Lowest and Highest Intensity Parties 18,000 16,000 14,000 GDP per Ton Emissions 12,000 Low Intensity 10,000 High Intensity 8,000 MALAYSIA 6,000 4,000 2,000 0 1 10 100 1000 10000 Log GDP in USD 11
Role of National and International Benchmarking Setting performance targets for industry regulation; Definition of GHG emission caps at the sectoral, national, regional or international level; Assessment of national or regional ‘comparability’; Determination of carbon credits that are granted or allocated under a cap-and-trade or flexible mechanisms of the Kyoto Protocol or of the new post-2012 period; and, Calculation of the carbon intensity or footprint of products for setting a domestic carbon tax or a border carbon adjustment. 12
Benchmarking in the EU context In EU Emissions Trading System a benchmark is not an emission limit, standard or target it is simply the threshold for what amount of allowances an installation gets for free fixed maximum amount of free allowances for industry 52 benchmarks cover 75% industrial emissions in EU ETS Starting point for benchmark values: average performance of 10% most efficient installations in (sub)sector Main principle: one product – one benchmark Incentive to improve performance Maximum amount of emissions covered by a feasible number of product benchmarks Criteria: emissions, number of installations and 13 homogeneity of products
Malaysia’s understanding of Voluntary Mitigation Actions Emphasis on transparency Methodologies Activity Data Emission factors MRV Toward development of a National Registry (Capacity Building Under Way) Linked to National Inventory Process Feeds both BAU and Mitigation Scenarios Facilitated by National Carbon Disclosure Programme (under development) 14
Use of current corporate and national data sources and statistics 15
Use of current corporate and national data sources and statistics 16
Opportunities for emissions reductions Energy efficiency measures Replacement of fossil fuels with renewable fuels/energy sources Direct combustion Treatment followed by combustion Avoidance of emissions (methane/CO2) Disposal in landfills Anaerobic digestion Burning/oxidation of wastes to segregation and recovery of chemicals Sequestration in durable materials Laminated products Fibre-board products Sequestration in the environment Plant 17 Soil
On-going Emissions Reduction/Avoidance Activities Physical oil palm plant Trunk Fronds Peat soil management – water table depth and fire management CPO – B5 diesel blend (114.5 million litres) Mesocarp – more than 2/3 of a ton per ton of CPO produced Steam/Electricity/FIT EFB – more than a ton per ton of CPO produced Electricity/Briquettes/Co-composing with POME/Fertilizer/Fibre products POME – 3.25 tons per ton of CPO produced Methane yield – 40kg/ton CPO Post-consumer waste cooking oil-based bio-diesel BACKSTOP – Forest Conservation and Sustainable Forest Mgt. 18
Forest-related Emissions Reduction/Avoidance Activities Maintenance of forest carbon stocks through conservation Emissions reduction through Reduced Impact Logging (RIL) Sustainable management of production forest No opportunities for Afforestation and Reforestation (AR) CDM Current attention on REDD+ Reducing emissions from deforestation and forest degradation Sustainable management of forests Enhancement of forest carbon stocks Forest conservation Five carbon pools - Aboveground and belowground biomass, dead wood, litter and soil Stock assessment using allometry and biomass expansion factors 19
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