Enabling Environments for Clean Energy Technology Transfer

1. Enabling Environments for Clean Energy Technology Transfer Michael Gerbis President The Delphi Group

2. The Delphi Group • Clean Energy & Environmental Consultancy since 1988 • Active in North American, Latin American, Asian and European markets • Key business units: • Clean Energy • Climate Change • Corporate Environmental Strategies • Health & Environment

3. Overview • Enabling Environments - Private sector Perspective • CDM & JI • Canadian Programs • Lessons learned from Delphi’s CACBI initiative • Essentials for developing the market • Role of governments & private sector • Conclusions

4. Enabling Environments To promotesustainable development • Development priorities • Local capacity building To promote investment • Commercial viability and replication • Generate economic returns Intersection of these enabling environments is of prime interest

5. CDM & JI Mechanisms that can Facilitate the Development of Enabling Environments • Promote SD, increase foreign investment, catalyze technology transfer • Build capacity, enhance environment & social development • Provide new commercial opp., leverage financing, + revenue, offset risks, etc.

6. What Makes a Market Attractive for CDM/JI? To private sector, enabling an environment means making it attractive for investment • Minimal business risks (cost, viability) • Maximize returns on investment • High potential for sales and replication • Cost effective CERs/ERUs

7. Canadian Action Several Canadian Federal Government Initiatives that help set the Foundation • Participate in International Forums (EGTT) • Canadian Climate Change Development Fund (CCCDF) • Cdn Initiative for Int’l Tech Transfer (CIITT) • Technology Early Action Measures (TEAM) • CDM/JI Feasibility & Baselines

8. CACBI Canada-Argentina Capacity Building Initiative • $Cdn 1.5 funded by CIDA’s CCCDF • Enabling environment for climate change TT • Stakeholder capacity building & engagement • Demonstration TT project • Replication • www.delphi.ca/cacbi

9. Establishing Enabling Environments for CDM/JI Key mistakes often made • Government • Creating uncertainty or restrictive rules/policy • Not setting priorities (SD, types of projects…) • Trying to be the “gatekeeper” of project approval • Setting policy/rules and not following through • Private Sector • Do not understand unique aspects of the market • Do not know SD or Tech priorities, CDM/JI process • No engagement of stakeholders

10. Essentials to Develop the Market Four essential principles for market development by Governments: • Clarity: Make the rules clear • Consistency: Don’t change the rules • Transparency: Enforcing the rules • Disseminate: Make the rules and tools available

11. Market Availability of CERs Int’l Validated CERs CDM Project Review System CDM Project Review Process Project Cert’n & Verification Baseline & CER Estimation National CDM Stakeholders System Capacity Building ForStakeholders Development of a CDM Stakeholder System Enabling a CDM Environment Developed by The Delphi Group, 2003 Permission for Use Required National Development Foundation Economic Integration of CDM With Key Industry Sectors National Development Priorities Sustainable DevelopmentCriteria

12. National Governments can Prime the Market • Assess the Market • Build capacity of priority stakeholders • Technical • Networking & engagement opportunities • Match demand with supply • Create incentives/remove barriers for TT • Deregulation, net metering, set RPS • Full cost pricing, eliminate fossil fuel subsidies • Harmonized standards & interconnection guidelines

13. CACBI’s Accomplishments • Institutional Capacity building to: • Define SD & CDM National priorities • Catalyzing Measures • Develop CDM review system (small & large) Engagement of stakeholders Creating networking opportunities Website and widespread communication (www.delphi.ca/cacbi)

14. Private Sector Role • Understand Local Environment (regulatory, economic, social, technical, etc.) • Capacity Building • Institutional, technical, etc. • Identify Market Opportunities • Technology Development & Adaptation • Financing • Diffusion, Transfer & Replication

15. CACBI’s Accomplishments • Demonstration project to illustrate the system • Illustration of system and benefits of CDM • Targeted Stakeholder Capacity Building Pan-American University Network Identification, shaping of solid CDM projects & sources of financing

16. International Authorities can Prime the Market • Subsidize OE costs for first allotment of projects • Encourage & facilitate establishment of OEs in all regions • Help model countries create and use SD and project screens • Continue with Int’l Forums focusing on specific objectives & outcomes

17. Developed & Developing Country Issue • Unleashing the Potential of PV in Canada • Typical Barriers • Need for an “Enabling Environment” • Path Forward • Reduce Price Gap & Create a Flexible Market • Integrate Renewables into Future Energy Strategy • Awareness & Training • Foster Private-Public Partnerships

18. Conclusions • Building enabling environments is difficult and slow • Success comes by keeping it simple • For CDM/JI there is a need for an ‘Architectural Framework’ • CACBI has enjoyed excellent response • Process outlined is transportable • This is both a Public & Private Sector Responsibility • Learning process for us all