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CO2 emission trading Creating new opportunities for Curaรงao Saturday 31 March 2012 Carel Cronenberg PhD 31-03-2012

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Building Industry Transportation Aviation Spatial Planning Environment 31-03-2012

Water

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Introducing myself

- Leading Professional Sustainable Industry Energy and Climate Policy for the Industry My projects include: - Implementing EU CO2 trading in Bulgaria - Underground CO2 storage in the North Sea - CO2 allocation and monitoring in the refinery sector (BP) - Large scale natural gas introduction in Israel 31-03-2012

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CO2 footprint of Curacao

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CO2 footprint of Curacao

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CO2 in the newspaper ‘CO2-uitstoot per inwoner Curaçao hoog’ 60 

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28-03-2012 9:13 | NIEUWS | Leoni Leidel-Schenk

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CO2 emissions of Curacao Approximately 4 Mton/yr transport

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energy/electricity refinery

3,4

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Uncertain data

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This presentation

- Needing a new sense of urgency on climate change - Uncertain status of the climate debate - Carbon markets and CO2 emission trading - Can Curaรงao take part in CO2 emission trading? - The need to make strategic choices for Curacao

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CO2 concentrations and emissions

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Sense of urgency will come back 

Clim

Climate change remains a reality, new alarming reports (UNEP Nov 2011)

olicy ate p

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Climate Agreements

1998: Kyoto protocol • Set of rules and reduction targets up to 2012 2009: COP 15, Copenhagen • Pledges/promises for further reductions 2010: Pledges are insufficient (give temp rise 3 to 5C !) December 2011 : COP 17 Durban • Spring 2012: inventory of levels of ambition • 2012 – 2014 Development of new climate agreement • In 2015 new climate agreement for 2020 onwards • Prolonging Kyoto up to 2020? 31-03-2012

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HIGH

Ambitions of countries Small Island states (AOSIS) • serious reductions to maintain level 1,5 C temp rise EU • -20% CO2 reduction in 2020 compared to 1990 • Core: European Emission trading system (ETS) US, Australia • Regional initiatives

LOW

Japan, Canada

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China, India “It is not our problem (yet)” Cronenberg/Durable Energy for Curaçao

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Emission trading, Cap and Trade

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Cap and trade Rules of the game The Cap: Set emission ceilings for each installation based on best-ofclass efficiencies and supply limited amount of emission credits into the market. The Trade: organize auctions, introduce trading platforms Essentials: Detailed an verified monitoring plans for each installation + Yearly emission reports, Verified, because CO2 is money 31-03-2012

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Emission trading: project credits

Emission reductions are: Real, Additional, Compared to an established baseline Monitored and reported Verified and certified 31-03-2012

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The carbon markets

Kyoto Project Credits Emission reductions: CDM (CER), JI Domestic Offset projects Regional systems Cap and Trade: EU-ETS (EUA) North American, Asian and Australian markets Durban New market based instrument, to be developed Other markets Voluntary emission reductions (VER) 31-03-2012

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CO2 price developments 



Too low demands and oversupply of carbon credits Credits allowed to plants that were shut down

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The special position of Curacao Current situation  Kyoto protocol (1998 – 2012)  Curaçao is an Annex-I country without reduction targets, without CDM credits Future options  Prolonged Kyoto protocol (2012 -2020)  Continue current situation  New position, e.g. take part in Domestic off set projects 

New Climate Agreement (2020 - )  Follow EU position  New position

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Opportunities 





Curacao has significant potential for energy saving and introducing renewable energy  and consequently may generate CO2 credits No need to wait until new climate agreement has reached  Voluntary CO2 markets  CO2 compensation to introduce green space travel In carbon markets, the guaranteed quality of the credits is determining its price  Curacao has the potential to deliver high quality carbon credits

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High quality CO2 credits Show that the CO2 credits represent a real CO2 reduction 1)

Project is transparent and reductions are verified and in accordance with international standards (UNFCCC)

2)

Reductions are based upon verified historical base data

In this respect a greenhouse monitoring and reporting system for Curacao is needed. Inclusion of refinery is essential For monitoring and reporting international standards apply (NIR, UNFCCC) 31-03-2012

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Recommendations for Curacao Prepare for the future: better insight is needed in current CO2 emissions, particularly the refinery  Setting up an Emission Inventory Reporting system NIR 

Start setting objectives and CO2 reduction policy (note CO2 policy ≠ renewable energy policy) 

Be informed on the post Durban discussions and preparations for COP 18 in Qatar (Nov – Dec 2012) 



Put the issue on the agenda in NL.



Also look for additional partnerships to get influence (Carribbean countries but also AOSIS)

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Make Curacao a Caribbean Paradise for high quality CO2 credits 31-03-2012

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Environment and Sustainability Safety and Environment – Industry Amesrfoort THE NETHERLANDS

carel.cronenberg@dhv.com

© All rights reserved. No information of this report may used for further publication without written permission of the principals 31-03-2012

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