27 de septiembre 2011 Carbon trading beyond 2012; new approaches and emerging market instruments Juan Mata Sandoval irector General de Políticas de Cambio Climático SEMARNAT Latin American Carbon Forum San José–Costa Rica

MITIGACIÓN C orto plazo: Define acciones de mitigación que reducirán 51 Mt CO 2 e/año en 2012 (6% respecto a linea de base (786 Mt CO 2 e) Largo plazo: establece líneas generales para mitigación hacia Todas las NAMAs cuentan con recursos federales y se complementan con recursos del MDL para algunas metas (5-10%) Se requiere apoyo para implementar mejoras en MRV. Programa Especial de Cambio Climático Publicado en DOF el 28 de agosto de 2009 Elaborado por: DGPCC- SEMARNAT

PECC. Long-term vision Mexican mitigation pathway The indicative goal states that, if the international community were determined to successfully face the immense challenge that climate change poses, Mexico would be ready to fulfill its corresponding part. The long-term aspirational goal… Is not a legally binding commitment It is conditioned to: Int. Finance (markets included) Technology transfer International agreements

Annual reductions by 2012: 50.7 MtCO 2 e 23% 30% 11% 36% Energy supply Energy use Agriculture, forests and other land uses Waste PECC. Mitigation goals Sectors with CDM participation: Power, buildings, and waste 5-10%

Prospectiva MtCO 2 e/año Prospectiva MtCO 2 e/año Meta PECC 100% = MtCO 2 e/año Generación de energía Consumo de energía AFOLU Desechos Avance al 3er bimestre 2011 y prospectivas 2011 y % = MtCO 2 e/año Al tercer bimestre 2011: Se han reducido MtCO 2 e/año 68.69% de avance respecto a meta 2012 (50.66 MtCO 2 e/año) Prospectiva al 2012 Se espera un ligero sobre cumplimiento de la meta total (51.41 MtCO 2 e/año = 101%)

CDM projects in Mexico ( 08/11/2011) Emitted CERs World total : MtCO 2 e Registered projects: 3,355 CountryEmitted CERs China57.8% India14.7% South Korea10.9% Brazil8.2% Mexico1.3% Others7.0% México 4% Malasia 3%

CDM Projects in Mexico * CERs: Certified Emissions Reduction ** Last updated on August 31 st, 2011 Mexico has 131 registered projects, mostly from waste management in swine farms (74). Around 67 % of the CERs* obtained are from 1 project of HFCs incineration processes. Category Registered Projects CERs obtained Expected CERs No. of projectstCO 2 e/yearNo. of projectstCO 2 e/year Wind 3708, ,036,660 Hydroelectric3371, ,844 Industrial gases emissions26,258,70422,540,280 Methane fugitive emissions--182,645 Waste management in swine farms251,514,162742,253,434 Waste management in dairy farms2 15, ,441 Municipal Landfill sites3393,683161,942,406 Municipal waste water treatment ,153 Energy Efficiency 1120, ,002 Fuel Substitution --147,043 Programmatic CDM ,283 TOTAL**399,382, ,494,191

The size of the Challenge Mexico,s voluntary pledge stated in the Copenhagen Accord up to 30% reduction of national GHG emissions from baseline by 2020 Equals to approx. 264 MtonCO2e/year reduction from baseline by times the effort of PECC (4 year program) in 8 years. Will require massive domestic and international financial assistance Carbon market will be a key player (at least 1/3 of the effort ~90 MtonCO2/year) Will the markets generate that level of demand? (ETS won´t be bying CER´s from Mexico post 2012). Will the effort sold to the markets still be accounted for national voluntary pledge?

Some issues to be solved Solve accountability issues between voluntary pledges and reductions sold to the market (prevent double counting) Capacity of players (DNA, project developers, DOE´s, etc) should be build up using lessons learned from the CDM cycle. MRV systems should be fostered, at the same time registry of new mechanisms should flexibilize without damaging accountability Private sector involvement on mitigationa national efforts Promote more participation of public sector in the carbon markets

Vivienda Estudio para apoyar a México en la identificación de acciones de eficiencia energética en el sector habitacional que se sustenten en el esquema de una NAMA. Transporte Identificar propuestas de posibles NAMAs desarrollar una NAMA de un proyecto de transporte existentes o en desarrollo. Industria del CEMENTO Incremento relación clinker en mezcla reemplazo de combustibles con alto contenido de carbono Industria del ACERO Regulaciones para nuevas instalaciones productivas Medidas de eficiencia energética para instalaciones en operación NAMAs potenciales en México