CARBON MARKET PROGRAM

CONTENTS

Carbon Market Program Overview 1

Carbon Funds 2

Technical Support Facility 4

Credit Marketing Facility 6

“One of the fundamental barriers developing

countries face in adopting cleaner energy


     
and capacity. The Carbon Market Program (CMP)
will help remove this barrier.”

Haruhiko Kuroda
President
Asian Development Bank
Carbon Market Program Overview
The Carbon Market Program (CMP) is one of the Asian The main aim of CMP is to help developing member
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climate change under its overall Climate Change under the KP to promote sustainable development, the
'  *
 
 
 
   principle at the base of Agenda 21. Most of the existing
supports the development of greenhouse gas (GHG) carbon procurement funds provide payment only upon
mitigation projects (e.g. renewable energy, energy project completion and when the carbon credits are

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  delivered. As a result, many GHG mitigation projects
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Mechanism (CDM) of the Kyoto Protocol (KP). It builds on /
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and adds value to ADB’s sustainable development focus to help address these barriers through a dedicated,

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 comprehensive and integrated CMP.

CMP has three elements:

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beyond 2012 up to 2020.

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the open market.

Carbon Market Program

Credit Marketing Input

Facility Output

Credits uncommitted
to the Funds

$
Participant A
CERs
Technical Projects
$ Carbon $
Support with Carbon CERs Funds CERs
Participant B
Facility
Content $
First credits Participant C
CERs

ADB Financing and Services

The CMP
 
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loans, equities, guarantees, and technical assistance.
1
Carbon Funds: Asia Pacific Carbon Fund and Future Carbon Fund
  
          


Carbon Fund (APCF) and the Future Carbon Fund (FCF). APCF and FCF are funds
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These carbon funds seek to stimulate investments in GHG mitigation projects in DMCs
while assisting participants in complying with their emission reduction commitments.
The funds help projects in DMCs to reduce upfront capital constraints in installing
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Feature APCF FCF

Target Period Kyoto Protocol 1st commitment period '3?@J?
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L $151.8 million $115 million
Participants Public (Sovereigns) Public and Private Sector
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of Belgium), Portugal, Spain, Sweden, and 9/
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(the Netherlands)
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/$'5  determined by at least three independent
sponsors and is determined by a range pricing agents. The recommended band is
of criteria, including independent /   +33
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pricing assessments, advanced payment on a framework that includes the risks
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carbon markets. It is approved by the
Board and updated quarterly.
Project Selection Criteria  Has access to ADB support in the form of debt, equity or guarantee, and/or

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 Generates permanent (not temporary) GHG reductions.
Priority Project Types 8 +
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that purchase credits beyond 2012, and the only one that is able to make the bulk of the funds available up front to assist

 
 

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towards sectors or sponsors that already have capital and/or have access to foreign direct investment.

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opportunities to stimulate GHG mitigation systems in the region.

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Technical Support Facility
The 

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(TSF) aims to raise the capacities
of project developers in developing
countries and help build a continuous
stream of viable GHG mitigation ;;<5


projects (e.g., renewable energy, support in
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the carbon market. }'
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developers and sponsors

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the services of technical experts who provide advice on project development and implementation, documentation, and
capacity building at any of these ADB project cycle stages:

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 in registering these with the CDM
departments in identifying and assessing 87
 
projects with GHG abatement potential
during country consultation missions. 7 

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screened, and included in the CPS, the CDM projects to ensure the delivery
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under CDM rules through due diligence, /
and assist the project developer in the projects to DMCs.
preparation of project design documents
(PDDs) and new baseline and monitoring 
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methodologies, when appropriate. providing direct technical inputs and
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 "* capacity building among governments
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and sponsors in obtaining host country 

 
 
approvals and validation of PDDs from 3

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GHG mitigation projects.

4
Synchronized ADB and
CDM Project Cycles

Country Partnership
Strategy

CDM
Eligibilty
Screening
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Documentation

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Loa oard A
and B

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considering CDM as early as the formulation of the CPS.
This way, the CDM project cycle can be undertaken within
the ADB project cycle at little extra cost. However, it is still
possible to consider inclusion of CDM elements just prior to
loan appraisal.

The CMP will lend support to renewable energy, energy


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DMCs where ADB provides other investment support such
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of opportunities at the country level. In many respects, the
earlier the involvement of the CMP team, the better.

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from the expertise of the experienced CMP team at ADB and the marketing
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How CMF works

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selected from existing professional intermediaries. The “sellers’
 
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the sellers and monitor the performance of the representatives.

6
 CMP Workflow
B $
 
D'* Project sponsors interact with ADB’s operations
Project application department who in turn may refer projects to the CMP during project concept
(via ADB operational department) preparation and appraisal stages of ADB’s regular project cycle. See page 8
for application procedure.

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Initial eligibility screening eligibility criteria under CDM international rules. This may involve desk review
and consultation with relevant ADB staff, and/or site visits and consultation
with project sponsors and relevant stakeholders.

B  
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CDM documentation and assist project developers and sponsors in preparing PDDs and new
methodologies.

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APCF/FCF  ++  
 

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Upfront payment 89'$ 
  
 

B * Project sponsors will be required to provide regular reports to

Monitoring $'5 ~55  ;$'5
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CER issuance and transfer

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APCF/FCF 3
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Payment upon delivery 
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(for selected cases)

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Marketing support 

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directly or to contract brokers on their own.

7
 The CMP is available to projects that are already receiving ADB support
subject to the satisfaction of the additionality criteria. The CMP application

 
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application form detailing the type of project they wish to seek assistance for

 
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Project sponsors who wish to qualify for the CMP should liaise with the ADB
staff from the relevant regional or private sector operations department.

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application form which may be requested from the CMP team, Sustainable
* 


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Department (see address below).

There will be less additional documentation required for project appraisal

as existing project documents such as feasibility studies, detailed design and
other project preparation reports previously submitted to the ADB operations
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Director
Sustainable Infrastructure Division
9
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Asian Development Bank
6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines
Tel +63 2 632 6473
5 7…†‡?†‡†?Jˆ‰
adbcdm@adb.org
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 3  

8
The clean development mechanism (CDM) is an instrument under the Kyoto Protocol that allows
industrialized countries with a GHG reduction commitment by 2012 to invest in projects in

 






  
activities must be additional, which means that they should result in reducing or sequestering
GHGs that are real and measurable and would not have occurred in the absence of the
proposed project activity. Another important aspect of CDM is that proposed activities must
demonstrate their contributions to environmental integrity and the host country’s sustainable
development goals.

“...the CDM has helped to identify cost-effective opportunities for emission





  
  




action... Additionally, the CDM feeds an adaptation fund though a 2% levy on
mitigation projects, and it has transferred environmentally sound technologies to
developing countries.”

Christiana Figueres
UNFCCC Executive Secretary
About the Asian Development Bank

ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing
member countries substantially reduce poverty and improve the quality of life of their people.
Despite the region’s many successes, it remains home to two-thirds of the world’s poor:
1.8 billion people who live on less than $2 a day, with 903 million struggling on less than
$1.25 a day. ADB is committed to reducing poverty through inclusive economic growth,
environmentally sustainable growth, and regional integration.
Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main
instruments for helping its developing member countries are policy dialogue, loans, equity
investments, guarantees, grants, and technical assistance.

Asian Development Bank

6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines
www.adb.org/climate-change
Publication Stock No. ARM102471 Printed in the Philippines