I wrote in Phase 1 of the Light up and Power Africa discussion (http://genderinpractice.afdb.org/fr/comment/4#comment-4) about the development of a new mechanism to support adaptation and I wanted to update the group following CoP23.
In short, we are making good progress on the creation of this mechanism. In the following submission, after a brief recap about the mechanism, I will address two topics:
1) how could the mechanism help deliver gender equality in energy and
2) how we plan to take it forward.
Brief recap: The Adaptation Benefit Mechanism is designed to send a market signal to project developers to invest in activities which deliver adaptation benefits - broadly defined as anything which makes households, communities and economies better able to cope with climate change. The CDM (Clean development Mechanism) was a process of creating numbers in an electronic registry fuelled by demand from the Kyoto Protocol and the EU ETS. The ABM similarly creates numbers in a registry. However there are two key differences to the CDM: The units are not commoditized, homogenous or fungible (there is no need since there is no compliance mechanism); and since they are not the primary accounting unit of the Paris Agreement, they do not interfere with host country actions.
These units are for sale for sale to donors, impact investors and CSR actors (i.e. anyone). These buyers should buy Adaptation Benefit Units (ABUs) because in doing so, they help real people adapt to real climate change and at the same time, help deliver the SDGs (Sustainable Development Goals) and (through the creation of mitigation co-benefits) help host Parties meet their Paris Agreements. See more here: http://unfccc.int/files/parties_observers/igo/submissions/application/pd... (this was, I think, the Bank's first ever submission in response to a call for input from the UNFCCC). And more details are available (see my email at the end).
1) How does this impact gender inequality and sustainable energy?
Here is a real project example which has been proposed under the mechanism: An African country recently reduced duty on ethanol for heating purposes, making it cheaper than kerosene. A factory owner needs some cash to re-tool to make ethanol cook stoves. This cash could be lent to the owner if the sale of cookstoves and ethanol was a) affordable to the consumers and b) was high enough to pay back the loan.
Under the Adaptation Benefit Mechanism, a project developer could seek a buyer for ABUs for this project on the basis that switching from wood and charcoal to affordable ethanol cooking will free up women and children's time, improve their health and enable them to be more economically active and spend more time in school respectively.
These are adaptation benefits because when households are economically stronger, they are better able to withstand climate shock. The ABUs represent a completely new cash flow (in USD) which can radically alter the business model. The ethanol comes from waste molasses from sugar mills and there are many other places where a similar story could be told. There is also an economically viable second generation ethanol plant operating in Brazil - making ethanol from cellulose in grass. If ethanol technology was applied in Africa, financially supported by the ABM, it could revolutionize cooking energy and with it, women and children's health and time management.
This is only one application of ABM. There are many others. Perhaps the most exciting is mini-grid and household connections - there is no greater adaptation benefit for a household than being connected to a reliable and affordable supply of electricity. The ABM could help to finance grid connections.
2) Where are we with the ABM?
Sorry, this is a bit technical. The link above is to our formal submission to UNFCCC (CoP23). At CoP23 I met with multiple Parties from all around the world (i.e. not just Africa) and they are all supportive. With money from the Climate Investment Funds (CIF) we are just now appointing consultants to develop the concept in draft form, including a pilot project. I am reaching out a to number of potential donors and CSR buyers who might sign the first ABU off take agreement to buy ABUs which we would then use to fund the project (for example the ethanol cook stove project above). One African Party has asked me for text on the mechanism to submit to the UNFCCC Secretariat for inclusion in the consolidated report on Article 6 of the Paris Agreement (this would put the concept firmly into the field of the negotiations).
The African Group of Negotiators will ask an African nation to present the concept at a Party-only workshop following SBSTA46 in May / June 2017 (which will take place in Bonn). Thereafter we will work with as many Parties as possible to encourage them to submit or support the proposal in their submissions on Article 6 to CoP23 (which will also be in Bonn in Nov / Dec 2017).
Finally, through contacts with the Pacific Island Development Forum and AfDB funded consultants who are still supporting the Government of Morocco on CoP22, I hope to encourage Fiji, the President of CoP23, to include the ABM in the agenda and push for a decision. A decision to create an Adaptation Benefit Mechanism would open the door eligible transfers of climate finance to support adaptation.
If anyone would like to know more / get involved, please contact me at g.phillips@afdb.org.
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