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E-mailHamburg, 1 November 2010
Mexico leads the way on a radical new approach to low carbon growth which could replace the CDM: Emissions from housing to be targeted, donors to be sought at Cancun.
The Mexican government has announced that it is developing a package of greenhouse gas reduction programmes with a view to cutting domestic emissions from residential housing and to promoting the innovative Nationally Appropriate Mitigation Actions (NAMA) approach to tackling climate change, with the intention of attracting support and investment at the Cancun climate talks in December.The NAMAs approach to reducing emissions, if successful, could represent a sea change in how the world’s industrialised nations help developing nations meet their emission reduction ambitions. Until now the Clean Development Mechanism (CDM) and Joint Implementation (JI) programmes have been the only vehicles available under the Kyoto Protocol for the industrialised world to assist with emissions reductions in the developing nations.
NAMAs, or Nationally Appropriated Mitigation Actions, are a concept coined at the 2007 Bali Summit and refer to a set of policies and actions countries undertake as part of a voluntary and non-binding national intent to reduce greenhouse gas emissions supported by technology, financing and capacity building from the industrialised world.
NAMAs are usually designed for a whole sector and within this sector can either supplement or incorporate financing for emissions reduction mobilised by the carbon market, including the CDM. How this can effectively happen in practice still needs to be defined at the UNFCCC level and is one of the most important topics to be addressed in Cancun in December this year.
The Mexican package, one of the first of its kind, is being developed by the Mexican National Housing Commission (CONAVI) and the Mexican Federal Environment Ministry (SEMARNAT) and supported by Point Carbon’s Global Advisory team. Point Carbon, a Thomson Reuters company, is the leading provider of market intelligence, news, analysis, forecasting and advisory services for the energy and environmental markets. Germany’s Ministry of the Environment is supporting the initial Mexican NAMA concept study to be showcased at Cancun.
The residential housing sector in Mexico is economically, socially and ecologically highly important for the development of the country, since the sector has grown by 17% annually in the last twenty years. This growth rate, however, has also had negative consequences for territorial planning, urban development, the use of energy and resources and, ultimately, for greenhouse gas (GHG) emissions. Indeed, the residential sector represents 18% of Mexico’s end-energy consumption and residential and commercial buildings were estimated to have emitted close to 75 million tonnes CO2e in 2006, or 12% of the CO2e emissions in Mexico in that year.
An expanding population has lead to an ever-increasing demand for housing. Hence, in the business-as-usual scenario Mexican emissions from the housing sector are expected to continue to rise. However Mexico has committed to reducing its GHG emissions by 50.65 million tonnes of CO2 equivalent by 2012, of which 5.53 million tonnes are attributed to the residential, commercial and municipal sectors. Mexico has also formulated even more ambitious emission reductions compared to the status quo for the period to 2020; however these are conditional upon the support of industrialised countries. According to Jorge Wolpert, General Director for Sustainability at CONAVI, “to fill this gap we are turning to the residential housing NAMA with the goal of introducing efficiency measures, and others, in the Mexican domestic housing market and thus reducing our emissions. In order to achieve this objective, we are seeking support for this NAMA from industrialised nations”.
“For instance, the demand for residential electricity in Mexico – which taken as a proportion of the total electricity consumption between 1995 and 2006 increased from 16% to 22% – is mainly driven by air conditioning, refrigeration, home appliances and electronics. These applications are expected to remain the main drivers of electricity consumption in the future. The use of air-conditioning alone accounts for about 12% of the energy use of buildings, or, in 2008, about 34 TWh of electricity, and it is expected to grow. Hence, there is significant potential to achieve emissions reductions by introducing energy efficiency measures such as improved housing insulation, replacing incandescent light bulbs with compact fluorescent light bulbs or the use of solar water heaters. These are the main objectives that this NAMA aims to achieve”, said Wolpert.
Juan Mata, General Director for Climate Change Policies at SEMARNAT, explains that “Mexico’s domestic housing NAMA concept incorporates several pre-existing policies but also includes new proposals to create a package which includes the promotion of green mortgages, enhanced insulation standards for new buildings and incentives both for additional energy efficiency measures and for alternative sources of energy such as solar water heaters. While there are several policies and programmes successfully addressing GHG emissions reductions in residential buildings, what this NAMA concept provides is a comprehensive approach covering policies and regulations for the whole sector”.
“NAMAs represent a new and exciting approach to achieving low carbon growth”, said Matthias Krey of Point Carbon’s Global Advisory team and manager of the assignment. “In the past, developing nations have understandably baulked at the idea of having their emissions capped but NAMAs offer a way to reduce emissions without a cap and recognises that different countries may take different nationally appropriate action. It also emphasises financial assistance from developed countries to developing countries to reduce emissions so the hope is that by presenting a clear, comprehensive and well-formulated NAMA concept the Mexican government will be able to attract financial and other support from industrialised countries at COP16 where the pilot programme will be showcased”. He adds “this NAMA provides a policy framework promoting sustainable criteria under which every residential building should be built in Mexico, resulting in energy savings and GHG reductions which will help the country to reach its voluntary mitigation target”. Krey concludes; “the Mexican NAMA on emissions reductions from domestic housing is one of very few NAMA pilots that will have advanced to the required level of detail by the time of the Cancun Summit, so in many ways it leads the way for future NAMAs which, we believe, will themselves form a central plank in the future climate regime”.
According to the German Ministry for the Environment, “because NAMAs bridge the gap between finance, economic development and climate protection they represent the possibility for developing countries to obtain large-scale additional funding for low carbon growth. The framework includes developing the right institutions, protocols and regulatory environment to enable the private sector to reduce emissions at scale and attract Foreign Direct Investment while doing so. The rules and procedures for NAMAs will need to be detailed over the coming years; however countries hosting NAMAs have the opportunity of building pilot NAMAs and proposing them to international donors for support. Such NAMAs, if well conceptualised, will very likely have a good chance of being supported by national or international donor agencies which are aware that practical NAMA experience will help to define the NAMA rules and procedures on the multilateral level”.
Ends --
The concept of NAMAs was first introduced at the Conference of the Parties (COP) held in 2007 in Bali, Indonesia. It is generally perceived that there could be three types of NAMAs: (i) NAMAs domestically funded and unilaterally implemented (unilateral NAMAs), (ii) NAMAs implemented with financial, technological and/or capacity building support from developed countries (supported NAMAs), and (iii) NAMAs implemented with funding from carbon offset credits generated for the amount of emission reductions achieved (credited NAMAs). The current negotiation does not preclude any of the three types of NAMAs. However, there is a debate on whether NAMAs should be funded through carbon offset credits (UNFCCC, 2010).
