Prioritisation of projects for Multilateral Fund funding: the MLF Climate Impact Indicator (MCII) by Etienne Gonin.

1. UNEP DTIE OzonAction Branch
Prioritisation of projects for
Multilateral Fund funding:
the MLF Climate Impact
Indicator (MCII)
Etienne GONIN, project coordinating consultant Seoul,
Republic of Korea, Low GWP HCFC replacements -
Asia Foam Workshop, 7 May 2010

2. UNEP DTIE OzonAction Branch
Roadmap
 Source of MCII and references
 Objective
 Principles
 In concrete
 Incentives
 Climate funding
 Role of Jumpstart

3. UNEP DTIE OzonAction Branch
Source
 Decision XIX / 6 of MOP 19, para. 11b:
“The ExCom should give priority to cost-
effective projects and programmes that
focus on, inter alia, substitutes and
alternatives that minimise other impacts
on the environment, including on the
climate, taking into account GWP, energy
use and other relevant factors”

4. UNEP DTIE OzonAction Branch
Source
Decision XIX / 6 of MOP 19, para. 11b:
 “To be applied to the development and
application of funding criteria for cost-
effective projects and programmes”
 Request for prioritisation led to developing
the MCII by the MFS
 An alternative to a “undesired technology
list”

5. UNEP DTIE OzonAction Branch
Reference documents
 MOP 19 report, esp. Decision XIX/6
 ExCom Decisions and Documents:
 ExCom Doc 55/47
 ExCom Doc 57/59
 ExCom Doc 59/51 : prioritisation
approach and examples (Add. 1)
 ExCom Doc 60/50 : incentives associated
with MCII

6. UNEP DTIE OzonAction Branch
Objectives
 Scope: only applied to conversion of
manufacturing capacity
 Only for activities in consumption sector
 Will assume the possibility of aggregating
several activities
 sector or country-wide climate impact
 Comparison on the basis of the annual
production of
refrigeration systems

7. UNEP DTIE OzonAction Branch
Basis
 Creation of a scientific simulation model
 Minimise the data inputs needed (based
on significant background data)
 Aiming at an:
 activity-specific indicator
 with fair and equitable results between
alternatives
 Meant to guide funding
decisions of ExCom

8. UNEP DTIE OzonAction Branch
Typical Inputs
 Number of Units produced annually
 Type and amount of ODS used per unit
 Basic characteristics (e.g: foam
thickness, cooling capacity)
 Share of exports
 Alternatives to HCFCs to be used

9. UNEP DTIE OzonAction Branch
Fair technology comparison
 Comparing climate impact of various
alternatives to HCFCs, for a specific
replacement activity, to the baseline of
the climate impact for HCFCs
 Including both:
 Direct impact (based on GWP of
alternative)
 Indirect Impact
(associated electricity use)

10. UNEP DTIE OzonAction Branch
Specificity of the Indirect Impact
 Energy efficiency comparisons harder
than direct emissions comparisons
 These are country-specific (sources of
energy determine CO2 emissions)
 Comparisons assume similar effort for
energy efficiency improvements for ALL
alternatives (otherwise biased)
 Assumption: Similar quality of
components for HCFC
and replacements

11. UNEP DTIE OzonAction Branch
In Concrete...
 A model and software developed by the MFS
with support from experts
 To be used to evaluate alternative
technologies considered in conversion projects
 Different profiles developed:
 AC / commercial cooling / commercial freezing;
factory assembled / on site assembled
 For foams, 2 subcategories:
• Building insulation
• Insulation of refrigerated
space

12. UNEP DTIE OzonAction Branch
Information generated
 Identification of the alternative with
minimum climate impact
 Caution: climate can only be ONE of the
parameters in choosing replacement
technologies
 Other: economic, availability of
components, market penetration and
acceptance, maintenance…

13. UNEP DTIE OzonAction Branch
Quantification of the climate
Impact
 Possible aggregation at sector or country
level
 MFS will use the MCII to inform the
ExCom on proposed projects’ impact
 Will report on test period at
ExCom 62 (end of 2010)
 Potential to use results to apply for co-
funding from energy-
efficiency and climate
change funding facilities

14. UNEP DTIE OzonAction Branch
Specificity of the use in the
foam sector (test analysis)
 In many applications: the indirect impact does
not apply (for ex. thermoware) or can not be
determined (for ex. buildings)
 In that case, GWP is only criteria for comparing
climate impacts
 For insulation for refrigeration systems:
comparison includes energy efficiency

15. UNEP DTIE OzonAction Branch
Comparison of MCII with other
evaluation methods
 In comparison with other climate
evaluation methods (TEWI, LCCP…),
MCII:
 is a forecast on equipment that does not
exist yet (no prototypes!)
 is based on minimal, standardised input
data
 Does not apply to
destruction activities

16. UNEP DTIE OzonAction Branch
Replacement technologies
considered
 HFCs and HFC mixtures with GWP > or = to
HCFCs
 Reduced HFC-content technology (esp. for
foam)
 HFC-134a
 Hydrocarbons
 Ammonia, CO2 and HFO to be added

17. UNEP DTIE OzonAction Branch
Remaining disincentives to
conversions away from HCFCs
 In many cases still no barriers to use HCFCs in
developing countries
 For companies: perceived higher-risk potential
of alternatives in comparison to HCFCs
 Lack of knowledge and practice of alternatives
 Limited commercial availability
 Eligibility of future conversion projects away
from HFCs in carbon
markets

18. UNEP DTIE OzonAction Branch
Beyond the MCII
 Incentives to encourage selection of
alternatives with low climate impact:
 improving knowledge level in companies during
the conversion process (training modules,
particularly on safety)
 Providing up-front funding for energy efficiency
improvements
 Encourage submission of HPMPs in order to
have more complete picture of the national
HCFC uses

19. UNEP DTIE OzonAction Branch
Examples of climate funding
component
 25% additional cost – new ExCom guidelines
- Funding of up to a maximum of 25 per cent above
the cost effectiveness threshold would be
provided for projects when needed for the
introduction of low global warming potential
(GWP) alternatives

20. UNEP DTIE OzonAction Branch
Examples of possible
complementary climate funding
 MLF Special Funding Facility? (in discussion)
 GEF Projects (cf. energy efficiency
enhancements)
 Specific funds: Climate Investment Funds (World
Bank)
 Bilaterals
 Voluntary Carbon Markets
(pres’n on banks yesterday)

21. UNEP DTIE OzonAction Branch
Role of Jumpstart project
 Contribute to increasing incentives to move
rapidly away from HCFCs
 Disseminate information on the MCII and
evolution of its principles, its use by the
ExCom, relevance for developing countries
 Propose climate evaluation tools (MCII,
TEWI, LCCP,…) for specific applications
 Highlight financing opportunities
 Presenting case studies,
background documents

22. UNEP DTIE OzonAction Branch
CONCLUSION
 MCCI:
 ex-ante evaluation of climate impact of
various alternatives for a specific project
 assessing climate benefit compared to
HCFC-based baseline
 will be assessment tools for ExCom
projects