Coverage of Selected Side Events at the
Lima Climate Change Conference - December 2014

Moderated by William Boyd, Governors' Climate and Forest Task Force, participants at this side event considered the challenges that subnational REDD+ initiatives face.

In his opening remarks, Peter Holmgren, Director-General, CIFOR, highlighted the organization’s 2014 focus on subnational initiatives and safeguard information systems. He noted that subnational initiatives provide the context in which national and international policies must operate, underscoring finance as crucial for REDD+ implementation at any level.

Underlining the need to embrace the realities on the ground and the variations in implementing REDD+, Boyd highlighted challenges to implementing sub-national REDD+ initiatives, including alignment of local and national level actions, and the need for credible benefit-sharing mechanisms to ensure community buy-in.

William Sunderlin, CIFOR, presented “REDD+ on the Ground: Lessons from CIFOR’s global comparative study,” a recently launched publication focusing on subnational initiatives. He identified the challenges to REDD+ implementation at the subnational level, including: financing; tenure; scale; monitoring, reporting and verification; and safeguards. On financing, he informed participants that currently most subnational initiatives rely on non-conditional livelihood payments, describing this situation as far below the original expectation of REDD+.

Underscoring his country’s vision for REDD+ as “beyond carbon and more than forests,” Heru Prasetyo, Head, REDD+ Agency, Indonesia, discussed the integration of subnational activities into the national framework. He highlighted the country’s bottom-up jurisdictional approach, drawing attention to memoranda of understanding signed with eight provinces to ensure equitable sustainable growth, curbing biodiversity loss, and lowering carbon emissions in order to achieve green growth and implement REDD+.

Márcio Sztutman, The Nature Conservancy, presented on his organization’s work in São Felix do Xingu municipality in Brazil, highlighting that the municipality was on the national black list due to massive deforestation driven by cattle ranching, illegal logging, illegal appropriation of lands and weak governance structures. He discussed the measures taken to restore São Felix do Xingu including the implementation of a rural environmental registry to provide information for deforestation attribution, and the establishment of a sustainable beef “farm-to-fork” initiative.

Making her statement, María Magdalena Ruiz Mejía, State Government of Jalisco, Mexico, lauded the Governors' Climate and Forest Task Force for providing a strategic platform to share lessons with other megadiverse countries pursuing similar paths to development. She noted that effective REDD+ implementation will allow local communities to become leaders for change, but stressed that without leadership at the gubernatorial level, subnational initiatives would not succeed.

Monica de los Rios, State of Acre, Brazil, spoke on REDD-readiness in her state, noting that Acre has channelled funds allocated to REDD+ to local communities and conservation efforts. She noted that as the municipality is now REDD-ready due to recent efforts to curb deforestation, the main challenge is balancing low deforestation rates with economic and social development.

In the discussion, participants raised the importance of districts and municipalities for the implementation of REDD+; scaling up REDD+; capacity building for local civil society groups and community-based organizations; the need to provide more region-specific education in forestry schools; linking the market to sector-specific REDD+ activities; engaging communities in the implementation process; and the kind of policies that support agribusiness.

This side event, moderated by Ariel Yepez, Energy Division Chief, IDB, considered ways to maintain the momentum of renewable energy development globally and more specifically in Latin America. Participants heard that the region is at the forefront of managing both opportunities and challenges related to renewable energy development, as it currently involves three times the global average share of renewable energy.

Edwin Quintanilla, Vice-Minister, Ministry of Energy and Mines, Peru, noted the rapid increase in renewables in Latin America underscoring the need to maintain, innovate and diversify Renewable and Non-Conventional Energy (ERNC). He stressed that under the Peruvian energy plan, the goal for renewables is to attain 60% of total energy production by 2025, coupled with side-targets of doubling hydroelectric capacity and increasing ERNC to 5% during the next three years.

Enrique Rodriguez, IDB, presented on the use of renewable energy in Latin America compared to utilization worldwide. He discussed the Climascopio/Climatescope 2014, a country-by-country assessment, and interactive report and index, which explores and assesses the investment climate and policies for clean energy investment in 55 emerging markets. Rodriguez spoke about the principal assistance instruments available at IDB, including financing operations and guarantees. He then addressed the Sustainable Energy for All Initiative and its three goals to: provide universal access to modern energy services; double the share of renewable energy in the global energy mix from its current share of 18% to 36%; and double the global rate of improvement in energy efficiency.

Cédric Philibert, IEA, addressed the current status of renewables worldwide. He noted the strong momentum for renewable electricity that is projected to be scaled up by 45% from 2013 to 2020, and stressed, inter alia, that: increasing risks are expected to slow renewable growth; the transition to advanced biofuels for transport is threatened by policy uncertainty; the solutions for future development rest in the hands of policy makers; and policies should focus on cost efficiency.

Sam Smith, WWF International, focused on the social aspects of renewable energy and its connection with the negotiations. She stressed, among others: that ambitious targets towards renewable energy utilization should be rewarded with financial support; contribution to job creation through renewables; including traditional manufacturing and finance related employment opportunities; and the necessity for aggressive policies and financial strategies to eliminate subsidies to fossil fuels.

In the ensuing discussion, participants addressed, inter alia: specific projects in Peru regarding ERNC; financing of projects with a focus on hydroelectric power; and market distortions due to fossil fuel subsidies.

This event, moderated by Catherine Ghyoot, European Commission, focused on key results of regional responses to climate change challenges and new opportunities for collaboration with Latin America.

Luis Miguel Galindo, ECLAC, presented on the paradoxes and challenges of sustainable development in relation to the economics of climate change in Latin America, noting that public policies need to address climatic impacts both for the present as well as for 2050. He said that while the region is responsible for 9% of all carbon emissions, it is not evenly distributed.

Margarita Astrálaga, UNEP-ROLAC, spoke of the need to incorporate climate legislation into the judiciary systems, and described high-level dialogue initiatives on climate change with foreign and environmental ministries of the LAC region.

Victor Ingrassia, La Nación, reported on the benefits of participating in the programme to expose journalists from the region to climate change issues. He highlighted the importance of disseminating news related to climate change in developing LAC countries.

Presenting on the capacity of the agricultural sector to mitigate and adapt to climate change, David Williams, Inter-American Institute for Cooperation on Agriculture (IICA), said agriculture is at the nexus of food security, the environment, and climate change. Encouraging the sharing of common competencies among regional agricultural offices, he emphasized the value of capacity building and disseminating best practices. He highlighted IICA’s virtual courses and workshops on risk management for focal points within relevant ministries in Latin America.

Paulo Barbosa, European Commission’s Joint Research Centre, Institute for Environment and Sustainability (JRC-IES), presented on opportunities for research, training and modeling through climate change scenarios in the areas of agriculture, drought and desertification. He urged: strengthening regional cooperation and training; modeling additional crop varieties; and promoting dialogue with decision makers.

Jan Karremans, EUROCLIMA, reported on six studies within Latin America on combining the science and policy dimensions in addressing climate change issues. He stressed the role of capacity and network building, and said the policy dialogue, both within the EU and Latin America, has been enriched and strengthened through regional meetings, interactive debates, research and networking.

Cristóbal Reveco, Adapt-Chile, discussed a mapping tool that can be adapted to each country’s climate change profile, and said the tool will enable local municipalities in Chile to develop adaptation strategies.

Ghyoot provided perspectives of regional cooperation between the EU and Latin America. She lamented that 60 million people in Latin America live in poverty while unsustainable resource use continues unabated. Urging regional cooperation, she highlighted collaboration, including cooperating on regional challenges; exchanging experiences and best practices; consolidating capability of the region to address climate change; and reinforcing the capacity for adaptation in forestry, agriculture and water management.

Participants discussed: modeling deforestation practices and the region’s water tables for use by the agricultural sector; utilizing alliances within the region; and creating opportunities for open dialogue between the environmental and agricultural sectors to “iron out” historical conflicts.

This event, moderated by Bettina Koelle, Indigo Development and Change, discussed the current status of implementation of the Adaptation Fund’s direct access modality in Africa.

In welcoming remarks, Mamadou Honadia, Chair, AF Board, said the Fund currently has 17 accredited National Implementing Entities (NIEs), of which Senegal’s Centre de Suivi Ecologique – accredited in 2010 – has successfully completed its first AF-funded project.

Sam Bickersteth, CEO, CDKN, announced the launch of the joint AF-CDKN web portal “Climate Finance Ready,” at COP20, noting it will help to disseminate lessons learned and enhance the confidence and capacity of partners to alleviate the unequal and unjust impacts of climate change by “levelling the climate financing playing field.”

Fazal Issa, ForumCC Tanzania, introduced the AF NGO Network, which currently comprises 115 associated NGOs and AF stakeholders involved in facilitating direct access for affected communities.

Sönke Kreft and Alpha Kaloga, GermanWatch, presented the outcomes of a study of NIE experiences in six African countries titled “Learning from Direct Access Modalities in Africa.” Kreft said direct access to adaptation finance is a “quintessentially African story.” Highlighting lessons learned by the pioneering NIEs, Kaloga mentioned, inter alia: low institutional capacity; language barriers for non-English speaking countries; and the need to strike the right balance between high fiduciary standards and recognition of national circumstances. Presenting recommendations of the study, Kreft highlighted, among others: the need for “expectation management” through the development of a self-assessment tool that can provide step-by-step guidance on accreditation; the critical role of leadership by National Designated Authorities in steering the process; and the need to ensure broad-based stakeholder consultations right from the outset in order to maintain a focus on the most vulnerable and excluded groups.

Presenting an NIE perspective, Dethie Ndiaye, Centre de Suivi Ecologique, Senegal, said direct access is one of the most innovative features of the AF and expressed hope that the Green Climate Fund (GCF) will take the same approach. He noted that despite the challenges faced, his country has implemented a successful adaptation project through rehabilitating infrastructure and enhancing institutional capacities. He said that building on lessons learned, Senegal was ready to scale up its adaptation activities through the GCF modality.

Daouda Ndiaye, AF Secretariat, presented an overview of activities undertaken through the Readiness Programme. Among feedback received from NIEs on further actions to be taken by the AF, he highlighted, inter alia: developing a criteria checklist to assist in pre-assessment or pre-screening of applicants; securing more funds and predictable sources of funding; developing a mentoring programme for NIEs; and exploring the possibility of developing one accreditation standard for different funding mechanisms.

Among issues raised during a discussion session, participants highlighted the need to clarify the future relationship between the AF and the GCF’s Adaptation window, and provide more guidance on the accreditation procedure for Regional Implementing Entities.

This event was co-chaired by Simon Buckle, OECD, and Hironori Hamanaka, Chair, Board of Directors, IGES. Buckle reiterated the OECD’s commitment to help countries mobilize finances for investment in green infrastructure. Stressing effective use of finance as essential for the diffusion of low carbon technologies, Hamanaka urged addressing the high costs developing countries face when investing in technologies to mitigate climate change.

Noting the importance of tailoring policy responses to country-specific contexts, Geraldine Ang, OECD, presented the OECD Policy Guidance for Investment in Clean Energy Infrastructure, noting that it is a non-prescriptive tool to assist governments in identifying ways to stimulate private investment in clean energy. She said the Guidance addresses, among others, investment promotion and facilitation, competition policies and energy market design, and carbon-friendly technologies and policies.

Christopher Kaminker, OECD, described an OECD report on mapping channels to mobilize institutional investment in sustainable energy, noting the increase in institutional investments in clean energy. He called on governments to be specific when calling for private investment, noting the need for them to understand and address the risks, challenges and opportunities potential investors may face in the green infrastructure arena.

Yuqing Ariel Yu, IGES, noted that although “technology transfer” is a familiar term, it is a complex and challenging process, which requires financial and in-kind investment from both technologically-advanced and recipient countries. On financing costs for green technologies, she noted challenges, including having to compete with more mature technologies, and banks’ preference for the lower-risk high-carbon investments.

Panelists Aditi Maheshwari, IFC; Xuedu Lu, ADB; and Giles Dickson, Alstom International, then made brief remarks.

Maheshwari highlighted that for the transition towards green technology, governments need to signal a positive shift in the investment climate. She urged a greater understanding of domestic investment landscapes and stressed the need to scale up current investments to deliver the desired “green transition.”

Addressing means to encourage investor confidence, Lu called for governments to: formulate long-term goals on climate change mitigation; mainstream climate change technology into national development plans; enact credible procurement and market access policies; and legally define long-term carbon credit values.

This side event, moderated by Smita Nakhooda, ODI, reflected on a decade of experience with public and private finance for climate action in developing countries. The role of public and private sectors in facilitating effective finance and regulation was discussed, focusing on major achievements and shortcomings.

Nakhooda presented a recent ODI report that reflects on the role and main characteristics of different climate funds. She stressed that climate fund flows are increasing, although they are still a small part of the climate finance landscape. Nakhooda underscored significant achievements and challenges, and addressed ways to make the system more effective, inter alia: take more risk and support innovation; support national stakeholders to strengthen policy regulation and institutional capacity; use the right types of finance for the appropriate purpose; create new incentives; set a high ambition bar for the supported programmes; and maximize complementarities and synergies.

Remco Fischer, UNEP FI, said that transformational change is impossible without transforming the private sector and that reallocating private capital at unprecedented scale is needed. He stressed that, for UNEP FI, the discussion is not about prioritizing private over public finance but about the smartest use of public finance to achieve transformation. Fischer proposed a way to “demystify” the finance agenda noting, among others, that the landscape changes drastically when different types of projects are considered.

Providing an overview of the structure and work of the GCF, Tao Wang, Director of Adaptation and Mitigation, GCF, noted that the Fund will be fully operational and will consider funding proposals from June 2015.  He addressed the allocation framework, investment criteria, strategic impact areas and the GCF Readiness programme and concluded, inter alia: that direct access currently plays a minor role in climate finance; the importance of the interlink between climate change and development; the need for mainstreaming climate change finance into the overall finance system; and the need for coordination among different climate finance mechanisms.

Anton Hilber, Swiss Agency for Development and Cooperation, characterized climate change as a big market failure of our current economic model, underscoring that the role of the private sector in addressing energy and resource efficiency is often underestimated. Noting constant difficulties in the past in generating sufficient private sector engagement, Hilber expressed confidence that during the GCF project implementation phase, this problem will be overcome.

Karsten Loeffler, Allianz, provided a private sector perspective, noting that it only constitutes a small part of the finance chain. Noting that the role of the private sector mainly comprises investment and insurance, he focused on the latter saying there is huge potential in terms of collaboration with governments for risk mapping at the national or regional level. Underlining the insurance industry’s role in assessing the actual risk and how it can be mitigated, he showcased examples of initiatives around the world, stressing that there is huge potential for further action.

In the ensuing discussion, participants addressed, inter alia: the importance of the country context vis-à-vis the sectoral one; the ways that UNEP FI “demystification” reports deal with political dimensions; formalities for GCF support; and non-financial instruments to address existing barriers.

Moderated by Brad Page, CEO, GCCSI, this event explored the contributions of clean energy sources and technologies in fulfilling sustainable development and decarbonization goals.

In introductory remarks, Page noted that fossil fuel demand is growing and reserves are “robust,” while renewables’ share in total global energy demand remains low. Citing the latest IPCC synthesis report, he said that without including carbon capture and storage (CCS), the cost for mitigation will rise to 138%.

Jane Ebinger, World Bank Group, noted that the CCS story so far has been mixed. Outlining the Bank’s support for pilot CCS activities in nine countries and regions, she highlighted the key challenges as, inter alia: creating strong regulatory frameworks to speed up investment; establishing a long-term carbon price support mechanism; research and development to lower technology costs; and “kickstarting” the CCS agenda in developing countries.

Majid Al Suwaidi, Lead Negotiator for the UAE, said his country’s history “teaches us that our natural resources are only a short term blessing and we need to use them wisely and sustainably.” He emphasized that continuing demand means fossil fuels will remain part of the energy mix for the foreseeable future, “but we must find a practical way of addressing emissions.”

Ahmed Aleidan, Saudi Aramco, discussed the company’s carbon management technology roadmap focusing on five areas: stationary carbon management; mobile carbon management; industrial applications; CO2 sequestration; and CO2-enhanced oil recovery.

Paulina Serrano, Petróleos Mexicanos (Pemex), outlined Mexico’s carbon capture use and storage (CCUS) technology roadmap. She noted one of the main goals is to establish a systematic and orderly basis for CCUS resources management and assimilation of technology knowledge. Among the main challenges faced, she highlighted: legal issues around responsibilities and liabilities; the management of inter-institutional coordination; and the need for economically feasible CCUS technologies that are adapted for both non-coal sources, and the trend towards fuel switching to natural gas.

Mohammed Al Satty, Kuwait Petroleum Corporation (KPC), highlighted some of the emissions management systems that have been put in place by his company. He said the next steps include: conducting an external audit of KPC’s GHG emissions inventory and data controls, exploring behavior-based reduction opportunities; preparing for Nationally Appropriate Mitigation Actions (NAMAs); taking necessary steps in “internalizing the environmental externalities,”; and planning for climate adaptation.

Mohammed Al-Malki, SABIC-Hadeed, described a sustainability campaign conducted among company staff, noting it yielded more than 141 innovative programmes to enhance energy efficiency, with a 5% reduction of the company’s GHG emissions in 2013.

During discussions, several speakers raised concerns about the economic feasibility of CCS when compared to renewables. Others highlighted the environmental impacts of CCS, stressing it should only be seen as a short-term solution.

Responding to a question about why oil-rich UAE continues to be classified as a developing country and whether it would begin to contribute to the Green Climate Fund, Al Suwaidi noted that “development is not just about wealth.” He also noted his country has shown its commitment by hosting the International Renewable Energy Association (IRENA) and investing in renewables research and development around the world.