Financing Options for Nationally Appropriate Mitigation Actions (NAMAs) Development

Armine Avagyan

28-30 October 2015, Asia LEDS Partnership Regional Workshop,

Mobilizing Investment for Low-Emission Development in Asia’s Agriculture Sector: Crop Production and Processing

Outline

1. Concept of Nationally Appropriate Mitigation Actions (NAMAs)

2. Step by step development of NAMAs in agriculture and land use sectors

3. Financing of NAMAs

4. FAO online learning tool on NAMAs in agriculture

NAMAs key characteristics

In line with national

sustainable development

priorities

Reduce emissions

enhance GHGremovals

Measurable, reportable and

verifiable

Can receive support from

domestic and/or

international sources

NAMAs

In the UNFCCC’s Bali Action Plan (2007), it was decided to launch mitigation actions for developing countries “ […] Nationally appropriate mitigation actions by developing country Parties in the context of sustainable development, supported and enabled by technology, financing and capacity building, in a measurable, reportable and verifiable manner.”

(Decision 1/CP.13, paragraph 1 (b) (ii))

NAMAs benefits

In addition to reducing and/or removing GHG emissions, a number of agricultural practices may also:

support climate change adaptation;

address agriculture as a driver of deforestation;

reduce agriculture’s contribution to pollution of water sources;

promote access to energy in rural areas; and

foster food security.

NAMAs sectorial distribution

In the NAMA UNFCCC registry as of August 2015:• 117 registered NAMAs;• 16 % in the AFOLU sector.

AFOLU NAMAs examples

Country Title Timeframe Status

Costa Rica

Livestock NAMA 15 yearsFinancially supported by the Inter-American Bank

Low carbon coffee 5 years

Financially supported by the Inter-American Bank and NAMA Facility

Dominican Republic

Blue Carbon NAMA: Conserve and restore mangroves

18 monthsSeeking support for preparation

Reducing GHG emission in pig farms 15 yearsSeeking support for implementation

GeorgiaAdaptive sustainable forest management

2 yearsFinancially supported by the Government of Austria

UgandaDeveloping appropriate strategies and techniques to reduce methane emissions from livestock production

6 monthsSeeking support for preparation

Financing of NAMAs

NAMAs provide an opportunity for countries to maintain and enhance agricultural productivity while reducing GHG emissions.

In the long run NAMAs should contribute to

national GDP increase

However, to design and implement NAMAs an up-front investment is

required.

Step by step NAMA development

Identifyoptions

Evaluate and prioritizeoptions

Identifystakeholders

Engage key stakeholders

Agree on responsibilities

Identifyfinancingsources

Develop a concept note

Design NAMA

Involve allstakeholders

ImplementCollect data for

monitoring

Evaluate, report and

verify

Application for funding is possible at various steps.

Identify financingoptions

Apply for funding to design a NAMA

Apply for funding for NAMA implementation

Apply for funding for capacity development

NAMA finance: history and status

In 2009, Parties to the UNFCCC agreed on new and additional funds for combating climate change, including:

• USD 30 billion as fast-start finance for 2010–2012;

• USD 100 billion is expected to be mobilized annually by 2020 through a number of channels, such as the Green Climate Fund;

• USD 10 billion was pledged for the Green Climate Fund in 2014

• The number of financing sources for NAMAs is increasing.

Examples of NAMAs receiving support include:

• Georgia’s Adaptive Sustainable Forest Management NAMA: USD 1.9 mil;

• Costa Rica’s Low-Carbon Coffee NAMA: EUR 7 mil; and

• Tajikistan’s Forestry Support NAMA: EUR 13 mil.

International financing sources

Green Climate Fund NAMA Facility

Austrian NAMA Initiative

Global Environment Facility (GEF) Fund

International Climate Initiative (ICI)

Latin American Investment Facility

Climate-related ODA funding

ADB Climate Change Fund (CCF)

ClimDev-Africa Special Fund (CDSF)

Climate Development Knowledge Network (CDKN)

In agriculture, private sector is automatically engaged in NAMAS because farmers are usually private entrepreneurs.

Private investment both national and international can be attracted by:

Public climate financing acts as a catalyst to leverage private sector financing.

If NAMAs bring sufficiently high financial returns, they become attractive to the private sector.

Private domestic financing is also needed to leverage international financing.

Life-cycle approach for GHG reduction engages also other private value chain actors (farm, post-harvest storage, transportation, processing, retailing, consumption and disposal) in NAMA development.

Stable political situation and clear commercial mechanisms

Provision ofincentives

(e.g. soft loansand

guarantees)

Elimination of barriers

Demonstrationof profitability and low risk

Private investment

Overview of criteria for NAMA support

• Amount of GHG reductions

• Transformational change

• Sustainable development benefits

• Sustainability and replicability

• MRV of GHGs and other performance metrics

Effectiveness

• Description with clear boundaries and plans

• Consistency with national development plans

• High-level political support and country ownership

• Support from sector stakeholders

• Capacity to implement

Implementation plan

• Budget with national contributions

• Catalytic impact of international finance contribution

• Leveraging private-sector investment

• No duplication with other finance sources

• Risk mitigation

Financing plan

Source: Adapted from Wilkes et al. 2013b.

FAO and Nationally appropriate mitigation actions(NAMAs)

Module 1

Climate change and agriculture

Module 2

Background on NAMAs

Module 3

Step by Step NAMA Development

Module 4

Monitoring, reporting and verification (MRV)

Module 5

NAMA financing

Structure of the online tool

FAO provides tools and trainings supporting NAMAsimplementation and design in agriculture:

• Learning tool on Nationally Appropriate Mitigation Actions in the agriculture, forestry and other land use sector

• GHG monitoring and scenarios comparison: FAO EX-ACT tool

• Land use change monitoring: FAO Collect Earth

• Data development: FAOSTAT

• Global Livestock Environmental Assessment Model (GLEAM)

• Trainings: Kenya, Viet Nam, Zambia.

Detailed description of all tools is available at:

http://bit.ly/fao-nama-tool

Thank you for your attentionContact:

micca@fao.org,armine.avagyan@fao.org