© 2006 UNDP. All Rights Reserved Worldwide. Proprietary and Confidential. Not For Distribution...

© 2006 UNDP. All Rights Reserved Worldwide.Proprietary and Confidential. Not For Distribution Without Prior Written Permission.

UNDP MDG Carbon

RBEC EFP Workshop

MDG contribution assessment

Presented by Matt SpannagleThursday 28th

September 25-29, 2006, Bratislava, Slovakia

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UNDP MDG Carbon Facility

Purpose of project’s MDG contribution assessment

Overview on assessment

Component 1: Safeguard Principles

Component 2: MDG assessment

Overview on assessment procedure

Roles of CO/HO/etc

Overview of presentation

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‘MDG Impact’

Number of Countrieswith access to CDM carbon finance market

Low High

Low

High

Objective for UNDP MDG Carbon Facility

CurrentCDM Market

Background:

Key objective of MDG Carbon is to facilitate carbon finance for CDM projects with high development dividend

Purpose of MDG contribution assessment

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To fulfill this objective, project MDG contributions have to be assessed in a coherent and consistent way that enables

Comparability and prioritization of projects

Demonstration and tracking of MDG Carbon portfolio contribution

requires a tool which assesses project MDG contributions in a consistent, credible and transparent way!

Purpose of MDG contribution assessment (cont.)

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MDG contribution assessment will serve the following purposes:

increase program credibility

protect the “MDG” brand which is based on people-centered, time-bound and measurable indicators

premium pricing based on MDG contribution

streamline project MDG contribution assessment to increase objectiveness and minimize transaction costs

allow for portfolio balancing based on projects’ MDG contribution


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For project proponents, maximizing project MDG contributions credibly enables:

Differentiation from other market products

Risk reduction due to higher CER prices and/or security of purchase

Risk reduction due to higher community buy-in which increases likelihood of delivering CERs as projected (i.e. stabilizing output)

Integration of MDG Carbon with broader policy frameworks etc.

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The assessment is based on two components:

Overview of assessment

Component 1: Acknowledgement of Safeguard Principles

Set of principles in the area of Human Rights, Labor Standards, Anti-Corruption, Environmental Protection etc

Projects not compliant are not eligible for MDG Carbon


Assessment of project contribution to each MDG Goal

Projects with negative impact on an MDG Goal not eligible for MDG Carbon

Eligible projects can be scored & ranked based on their MDG contribution

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Overview of assessment (cont.)

Potential projects

Safeguard principles

MDG assessment

compliant

Notcompliant

Negative impact

Positiveimpact

Ineligible projects

Higher MDG contribution

Lower MDG contribution

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Component 1: Safeguard Principles

Avoid ‘negative impacts’

Eliminate projects ineligible for UNDP cooperation

Ensure transparency and rigor in project selection

Increase credibility of the MDG Carbon Facility

Objectives

Sources

International conventions on human rights, labor standards, environmental protection and corruption

Ten Principles of the UN’s Global Compact

World Bank Environmental and Social Safeguard Policies

IFC Environmental and Social Standards

IFC Equator Principles

Background

Component 1 of MDG assessment tool

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Component 1: Safeguard Principles (cont.)

Application

Contractual agreement

Signed by the representative of the project

Subject to independent verification

(details to be determined & finalised with UNDP legal)

Non - compliance

UNDP will terminate the contract or any other form of collaboration with the project

UNDP will consider public announcement of the withdrawal

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Human rights

Principle 1: The project respects internationally proclaimed human rights

Principle 2: The project is not complicit in human rights abuses

Principle 3: The project respects dignity, human rights, cultural property and uniqueness of indigenous peoples

Principle 4: The project does not involve involuntary resettlement

Labor Standards

Principle 5: The project respects the employees´ freedom of association and right to collective bargaining

Principle 6: The project does not involve any form of forced or compulsory labor

Principle 7: The project does not employ any form of child labor

Principle 8: The project does not involve any discrimination based on gender, race, religion or sexual orientation

Principle 9: The project provides workers with a safe and healthy work environment

The principles

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Environment

Principle 10: The project takes a precautionary approach in regard to environmental challenges

Principle 11: The project does not involve significant conversion or degradation of critical natural habitats, including those that are:

(a) legally protected

(b) officially proposed for protection

(c) identified by authoritative sources for their high conservation value

(d) recognized as protected by traditional local communities

Anti-corruption

Principle 12: The project does not involve corruption at any level

Cultural heritage

Principle 13: The project does not involve the alteration, damage or removal of any critical cultural heritage

The principles (cont.)

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The MDG assessment is conducted in several steps:

Score target 1

Score target 2

Score target …

Score target 111) Quantify the impact on each target

2) Justify impact assessment

3)Sum target scores up to obtain goal score

4) Weight goal score with country specific weighting

5) Obtain weighted overall MDG score

6) Weight with HDI

7) Obtain final MDG score

Justification target 1


Justification target …


+ + + +

Score MDG 1

Score MDG …

Score MDG 7

Country-specific weighting

Weighted overall MDG

score

HDI weighting

Final MDG score

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Component 2: MDG assessment (cont.)

Step 1: Quantify the impact on each target

The project’s impact on the target is quantified with pre-defined indicators

The quantification is based on the number of people impacted

Example: ‘number of children vaccinated against measles’

Step 2: Justify impact assessment

Positive and negative impacts on the target are described

The choice of indicator (if applicable) is justified

Monitoring of impacts is described

Step 3: Sum target scores up to obtain goal score

If several targets under one goal (i.e. goals 1, 6 and 7), target scores are summed to obtain the score for the goal

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Component 2: MDG assessment (cont.)

Step 4: Weight goal score with country specific weighting

Goal scores are weighted differently based on prioritization of MDG in the country

Weights set at national, regional or local level

Project proponents have to adopt weights set for the particular project location

Step 5: Obtain weighted overall MDG score

Weighted goal scores are summed to obtain overall MDG score

Step 6: Weight with HDI

The score is weighted with the Human Development Index of the project’s country location

Step 7: Obtain final MDG score

The final MDG score for the project is obtained

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Goal Weightings

Goal weighting

Summarized evaluation Goal 1:

Eradicate extreme poverty and hunger

Goal 2: Achieve universal primary education

Goal 3: Promote gender equality and empower women

Goal 4: Reduce child mortality

Goal 5: Improve maternal health

Goal 6: Combat HIV/ AIDS, malaria and other diseases

Goal 7: Ensure environmental sustainability

Summarize the scores for each goal.

Goal weighting (may be modified by UNDP Country Office)

25% 10% 10% 10% 10% 10% 25%

Weight goal scores and add up to provide overall score

Provide country’s Human Development Index

Divide overall score by Human Development Index

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Overview of assessment procedure

The MDG assessment procedure is build in parallel to the CDM procedure:

PIN(Project Idea Note)

PIN screening for CDM eligibility & reasonableness

PIN screening for initial assessment of MDG contribution

(Part C in PIN)

PDD (Project Design

Document)MDG assessment

Validation of PDD by DOEQuasi-validation of MDG

assessment by stakeholder & CO/RBx/HO

Stakeholder consultation

process

Project implementation

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Overview of assessment procedure (cont.)

CDM monitoring report

Verification by DOE Verification by DOE/CO/RBx/HO

Issuance of CERs

Project implementation

MDG monitoring report

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Roles of UNDP CO

CO role in MDG assessment Set goal weightings in accordance with PRSPs and national policy priorities Conduct assessment in cooperation with Project Proponent Check references on baseline information (e.g. literacy rate in country) Oversee stakeholder consultation process Participate in stakeholder consultation process, which is quasi-validation of project

MDG assessment Ensure comparability among MDG Carbon projects within the country by checking

on consistent assessment (e.g. all projects use same poverty line etc.)

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Roles of UNDP RBx/HO

RBx/HO role in MDG assessment Development of standardized MDG assessment tool, procedures etc Development of guidance on MDG assessment High-level validation & verification to ensure comparability among projects from

different regions Assistance as required

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