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Status of Clean Development Mechanism in Pakistan1

Dr. Syed Sajidin Hussain2 and Saadullah Ayaz2

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Introduction

Pakistan is a low Green House Gas (GHG) emitting country with a total annual GHG emissions of 107.5 Million tCO2 in year 2002 (0.43% of world’s total, 35th in world’s ranking) and per capita emissions of 0.7 tCO2 (134th in world’s ranking) [World Resource Institute, 2005]. Owing to the growing population of 140 million (sixth in world’s ranking) and consistently positive economic growth since the 1951 recession (Economic Survey of Pakistan, 2005), the country is high energy demanding. Total energy generation was 68,900 GWh in 1990 which is expected to increase up to 234690 GWh in year 2020 (ALGAS 1998). The energy sector is the most significant contributor to GHGs in Pakistan with a total emission of 27.9 million tCO2 in year 1989-90 (over 82% of the total of the country and 0.45% of world’s total). Its share in different sectors in the 1990 was: industries 44.9%, transport 27.2%, residential 22.2% and commercial 5.7%. The low GHG emission status of the country provides no safety from the adverse effects of global climate change. Pakistan being an agricultural based economy, lying in arid and semi-arid region, with heavy dependence on irrigated agriculture, is highly vulnerable to climate change. We are already facing the adverse impacts of climate change with higher glacial melt, prolonged droughts, hot winters and early summers which are negatively affecting our water resources and overall agricultural productivity. The carbon sinks are degrading fast as the country has low forest cover (4.5 %) with a high rate of deforestation of about 0.2 - 0.4 % per annum (ALGAS 1998). Long-term impacts of climate change are expected to threaten our biodiversity (loss of species and their habitats), water availability, food security, human health and overall well being. In order to fulfill the international obligations and show our strong commitment of addressing the climate change issue, the Ministry of Environment is undertaking all possible measures to formulate policies and implement necessary measures. The country has fulfilled the important conditions for becoming eligible for CDM projects after signing the Kyoto Protocol early this year. Pakistan can potentially aspire to host CDM projects and offers the best technical, financial and administrative opportunities together with political stability that creates a conducive environment to attract investors in the carbon finance.
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Paper presented in the CD4CDM workshop, 19-21 October, 2005, AIT, Bangkok, Thailand. CDM Cell, Ministry of Environment, Islamabad (e-mails: ssajidin2004@yahoo.com and saadayaz@gmail.com)

This paper provides an overview of the current status of CDM activities in Pakistan. The next section lists progress of activities undertaken by the country under the United Nations Framework Convention on Climate Change (UNFCCC) as part of the internal obligations. The third section describes draft national CDM strategy. In the last section, future outlook for taking forward the CDM process in the country is provided. 2. International Obligations and Pakistan’s Status

Realizing the importance of the climate change issue, Pakistan has been actively participating in the global climate change mitigation efforts initiated at Rio Earth Summit in 1992 where the historical United Nations Framework Convention on Climate Change (UNFCCC) was adopted by 189 parties. The country signed the UNFCCC as Non Annex- I Party in June 1994 and it became effective for Pakistan, as Party, with effect from 30th August 1994 (Ministry of Environment, 2005). The country acceded to the Kyoto Protocol on 11th January 2005. Pakistan has submitted the Initial National Communication to UNFCCC and carried out various other projects such as ALGAS study, and UNEP/Ministry of Environment study and Asian Development Study on Impact of climate Change in Pakistan. A high level National Committee on Climate Change, chaired by the Prime Minister of Pakistan has been formed for policy formulation on this important issue. An autonomous Global Change Impact Studies Centre has been established that is engaged in research on impacts and adaptation to climate change in the country. Following the accession of the Kyoto Protocol, Pakistan established a Clean Development Mechanism (CDM) secretariat as part of the Designated National Authority for approving and facilitating CDM projects in line with national sustainable development goals. A national CDM strategy has been drafted that offers all outstanding support for attracting investments and capitalizing the carbon business under the CDM initiative (Draft National CDM Strategy, 2005). 3. The Draft National CDM Strategy of Pakistan

A National CDM Operational Strategy has been drafted in consultation with stakeholders for the implementation of CDM process in Pakistan. The strategy describes policy guidelines and sets criteria for review and approval of CDM projects.

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The draft National CDM Operational Strategy has been submitted to the Prime Minister Committee on Climate Change for approval. Broad outlines of the strategy are presented below. 3.1 Organizational Structure

Institutional setup for CDM is given in figure 1. The Designated National Authority (DNA) has been established in the Ministry of Environment, supported by CDM secretariat for project approval and streamlining of the CDM process in the country. A CDM Cell as part of the secretariat will facilitate the process. Technical committees will be formed for major sectors to provide technical support in reviewing CDM project documents. The overall CDM implementation process will be monitored through a CDM Steering Committee, chaired by Secretary, Ministry of Environment. A high level Prime Minister’s committee on climate change has been established for policy formulation and overseeing Climate Change/CDM implementation in the country. 3.2 CDM Secretariat The Joint Secretary (International Cooperation) as DNA is heading the CDM secretariat/ CDM Cell. The functions of the CDM Cell are to: • • • • • Prepare work plan and action plan for implementation of CDM in Pakistan. Increase awareness about CDM of all the stakeholders. Strengthen institutional support. Assist research institutions and academia to promote research and education. Build capacity of all the stakeholders (line departments, NGOs, academia, public/ private sector and communities) in CDM project development and implementation. Develop national priorities for CDM projects. Participate in the development of projects, develop base- line and conduct monitoring of the projects. Support the Designated National Authority (DNA) in technical matters for endorsement of the projects and their further processing. Attract potential donors (national, bilateral and multilateral) for funding of the projects in the country.

• • • •

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• • • •

Organize and facilitate the Technical Committees and hold their meetings. Carry out the assessment of the projects against the National Sustainable Development Criteria. Build liaison with all the stakeholders for the effective implementation of projects. Correspond to related international issues and participate and represent Pakistan for CDM on all national and international forums.

Figure 1. Organogram of Institutional Setup for CDM in Pakistan
Policy Formulation and Implementation

PM Committee on Climate Change

CDM Steering Committee

Operational(One Window Office)

Project Proponent

DNA/CDM Secretariat (CDM Cell)

National and International Stakeholders

Facilitation and Promotion

Technical Committees

3.3

CDM Technical Committees

The following three Technical Committees have been proposed which will meet on need basis and will help in reviewing and provide advice on CDM projects. Any additional committees may be notified if needed. These committees will also assist project sponsors in developing CDM projects if requested by the project sponsors. • • • Energy Efficiency/ Renewable Energy. Waste Management. Agriculture, Forestry and Livestock. 4

3.4

Prime Minister’s Committee on Climate Change

It is the highest level policy and review forum that will guide the overall process of CDM and Climate Change. The Committee is chaired by the Prime Minister and is composed of Ministers from relevant ministries and other high officials. The committee meets at least once in a year. 3.5 CDM Steering Committee

Chaired by the Secretary, Ministry of Environment, this Committee will be responsible for review the implementation of progress on CDM activities in the country and will ensure inter-ministerial coordination for effective management of CDM process in Pakistan. The Committee will meet at least on a quarterly basis.

4.

Priority Areas for CDM Projects

Pakistan will host unilateral, bilateral and multilateral CDM projects in the following priority areas. • • Energy (renewable energy/alternate energy, energy efficiency/ energy conservation, and fossil- fuel cogeneration. Land use, Land use Change and Forestry (biodiversity protection, soil conservation, watershed maintenance, sustainable forest management, afforestation and reforestation). Agricultural and livestock practices. Waste Management (landfills, solid waste management, recycling) Transportation (alternative fuel vehicles, mass transit systems, cleaner engines, CNG). Industrial processes.

• • • •

A number of national and international private companies and Carbon Finance institution (e.g., World Bank) are now showing interest in developing CDM projects in the country in the field of alternate/renewable energy production including hydro-electric power, wind energy, waste/bio-energy etc.

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5.

Future Outlook

Pakistan is new entrant to CDM business. There is a need for initiating CDM capacity enhancement projects in the country by focusing on the following activities as part of our future outlook. • • • • • • To strengthen the existing CDM institutional setup (DNA and CDM secretariat) for better management of CDM process. To transform the national CDM strategy in to a detailed action plan. To identify CDM priority areas and to quantitatively assess the potential CDM projects in the country. To develop guidelines and indicators for review and approval of CDM projects according to national sustainability goals. To raise awareness of various stakeholders about climate change and CDM in country. To increase capacity of CDM project proponents and investors in project development.

References ALGAS (1998). Asia Least Cost Green House Gas Abatement Strategy. Asian Development Bank/ Global Environment Facility/ United Nations Development Programme. Manila, Philippines. Draft National CDM Operational Strategy (2005). Ministry of Environment, Government of Pakistan, Islamabad, Pakistan. Economic Survey of Pakistan (2005). Ministry of Finance, Government of Pakistan, Islamabad, Pakistan. http://www.finance.gov.pk/survey/home.htm Ministry of Environment (2005). Brief on Pakistan’s Accession to Kyoto Protocol to UNFCCC. Ministry of Environment, Government of Pakistan, Islamabad, Pakistan.www.pakistan.gov.pk/divisions/environment-division/media/ kyoto_protocol.pdf World Resource Institute (2005). Climate Analysis Indicators Tool. Version 3.0. World Resources Institute, Washington DC, USA. http://cait.wri.org/cait.php?page=yearly

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