3 This document was prepared by DNV GL Energy for the World Bank Group and has been expert reviewed by the International Institute for Sustainable Development and the New Climate Institute. It identifies a series of modules, indicators and methodologies for assessing different mitigation actions to contribute to achieving the goal of an internationally accepted system for comparing carbon assets and eventually, their trade and exchange. It is expected that the modules, indicators and methodologies outlined in this document will evolve based on discussions with stakeholders, further technical work, and practical application. This document will be periodically updated and uploaded to: http://www.worldbank.org/en/topic/climatechange/brief/globally-networked-carbon-markets. This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. 4 Table of Contents 5 Table of Contents Acknowledgements........................................................................................................................... 6 Executive Summary ........................................................................................................................... 7 Background..................................................................................................................................... 10 Mitigation Actions: a Bottom-Up Approach ............................................................................................... 10 Evaluation Tools: Rationale for the MAAP ................................................................................................. 12 Mitigation Action Assessment Protocol ........................................................................................... 14 Good Practice Guidelines .......................................................................................................................... 14 Structure of the Mitigation Action Assessment Protocol ............................................................................ 15 Mitigation Action Assessment Protocol Modules and Assessment Areas .................................................... 16 Description of the Modules and Indicators ................................................................................................ 17 Sample Application of the Mitigation Action Assessment Protocol ............................................................. 19 Applicability of the Mitigation Action Assessment Protocol: Uses and Users ............................................... 23 User Guidance .......................................................................................................................................... 25 Annex 1: Modules, Modules Areas, Key Indicators and Level of Development.................................. 28 Annex 2: Review Process ................................................................................................................. 44 Annex 3: Application and Customization of the Protocol in Peru— Lessons Learned ........................ 47 Annex 4: Jurisdiction-level Assessment............................................................................................ 55 Acknowledgements 6 Acknowledgements This report is the outcome of a World Bank project led by Chandra Shekhar, Marcos Castro and Bianca Sylvester. The report benefited from the guidance provided by Vikram Widge and Neeraj Prasad, and the valuable contributions and perspectives of our colleagues, ensuring the quality and clarity of this report, Pablo Benitez, Eduardo Dopazo, Johannes Heister, Wendy E. Hughes, Klaus Oppermann, Harikumar Gadde, Borja Garcia Serna and Mandkhai Bayarsaikhan. Technical editing was carried out by Maite Lasa Garcia. The report builds upon work commissioned to a DNV GL team led by Miguel Rescalvo, and also consisting of Edwin Aalders, Sofia Aguado, Ramiro Barrios, Eduardo Dopazo, Michael Lehmann, and Pablo Reed. Detail written contributions and comments were provided by Frederic Gagnon-Lebrun (International Institute for Sustainable Development) and Seton Stiebert (New Climate Institute). Last but not least the team would like to acknowledge the participation and inputs provided by all relevant stakeholders that participated in the consultation process and the several working groups and workshops that were organized to discuss early drafts. The report was edited by Tasha Eichenseher. This analytical work and report was financed by the CF- Assist Fund, a multidonor trust fund administered by the World Bank and cosponsored by Switzerland and Spain. Executive Summary 7 Executive Summary not yet exist, but is a much-needed step in effectively and efficiently addressing climate change on a global scale. The new international climate policy architecture that is expected to emerge from the Paris Agreement, appears to leave considerable discretion to Governments as to the form and scope of their mitigation contributions. In Short, Medium, and Long-Term Goals and the response, carbon markets are expected to undergo a Scope of the MAAP: significant transformation in an effort to enhance transparency and compare a patchwork of different approaches. Kyoto Protocol mechanisms created a top-down system for measuring emissions reductions in what could be called the first generation of carbon markets. But the current limited functionality of such mechanisms has led to the development of several bottom-up approaches in local, regional, and national climate policy frameworks. These strategies promote emissions reductions through the implementation of mitigation actions. The recent climate change agreement reached in 2015 in Paris sets the pace for the next generation of carbon markets. Unlike commitments under the Kyoto Protocol, the The MAAP focuses on the mitigation value of a particular Nationally Determined Contributions (NDCs) submitted by type of carbon asset—carbon credits. Carbon credits are countries in the context of the Paris Agreement reflect the generated when jurisdictions reduce carbon emissions considerable discretion left to national governments on the below a baseline level. The increasing number and form, scope, and timing of their mitigation contributions. diversity of mitigation actions that are emerging has While this enables broad participation, it also means that a accelerated the need for independent analyses of the patchwork of different targets, policies, and programs has various initiatives and the mitigation value of the carbon been proposed in the 195 NDCs that have been credits they generate. The approach presented in this submitted. There is also wide variation, particularly among document falls within the broader scope of work from the developing countries, in how the NDCs are to be achieved World Bank Group’s Networked Carbon Markets (NCM) and implemented. For example, while 40 countries (plus initiative. 23 sub-national jurisdictions) are designing or The proposed MAAP can be applicable to a range of implementing different types of carbon pricing instruments, mitigation actions, as well as the evolution of those actions others are choosing crediting mechanisms, renewable over time. As already stated, the ultimate goal of the energy standards, and/or energy efficiency measures. MAAP is to compare carbon credits from jurisdiction to While ambitious, the Paris Agreement offers little technical jurisdiction and inform linking decisions. However, in the guidance about how to ensure adequate design and short term, given the current efforts by different implementation of these actions. This, therefore, places jurisdictions toward the design and implementation of significant demands for a well-functioning framework to mitigation actions, the MAAP is first and foremost intended guide, measure, compare, and track the progress of to be a tool to facilitate prioritization, benchmarking, and mitigation actions and carbon assets, within countries and better-designed mitigation actions. It can also be used to between them. assist different stakeholders in defining the elements of a Against this backdrop, this Mitigation Action Assessment robust mitigation action and the level of development Protocol (MAAP) is proposed as a key tool for achieving expected of the different components required for an transparency in how these climate actions are designed acceptable level of confidence in the success of the and how they compare in terms of mitigation value. The action. The MAAP could help inform the design of long-term goal is to have the MAAP serve as an regulatory instruments, such as Nationally Appropriate internationally accepted system for comparing carbon Mitigation Actions (NAMAs). Doing so at the incipient assets and, eventually, the trade potential and development stage of mitigation actions will surely serve exchangeability of carbon credits. Such a framework does not only to establish the basis for comparing tradable units Executive Summary 8 for future crediting mitigation programs, but also to assist implementing such actions. Carbon assets might be only a in the development of sound, supported, or unilateral part of the justification for implementing a mitigation mitigation actions. action. The assessment of the mitigation value is important if the The Networked Carbon Markets (NCM) initiative carbon credits generated from the mitigation action are complements the World Bank Group's ongoing low- intended to be traded. The MAAP also proposes an carbon development activities and its efforts to approach to assess the mitigation value of an intervention, promote carbon markets as critical to achieving which is then not only determined by its isolated impact climate mitigation at large scale and in an effective and (carbon integrity) but also by its relevance in the context of cost-efficient way. Its end goal is to collaboratively jurisdictional effort. This combines analysis of the develop the post-2020 services and institutions creditability of the actions implemented and the relative needed for an international carbon market that links contribution to the global emission reduction effort, which climate actions in a way that is inclusive, transparent, is only likely to be relevant if the carbon assets are to be efficient and has environmental integrity. traded internationally. This examination is done within the specific context of the relative effort that each jurisdiction The three key components of the Program are: can actually make to contribute to climate change 1. Independent assessment framework to guide and mitigation. assess the implementation of climate actions. The framework would provide countries with The MAAP is structured into independent modules that information needed to understand, compare, and cover different risk categories, each of which includes a eventually link heterogeneous climate actions. set of indicators that users can customize to their own 2. International Carbon Asset Reserve (ICAR) to interests. The assessment for each risk category is in the help domestic regulators manage market risks or form of a score—an assigned value and relative weight to address market failures. each key indicator in that risk category. Each indicator and 3. International Settlement Platform to track cross- risk category has default weight values assigned that can border trades and possible clearing house also be customized by the user. function. The MAAP is formed by six independent modules. Four modules are applicable to the mitigation action itself, while These three key components of the NCM Initiative are two others cover the relative contribution of the executing to be introduced in a phased manner, initially jurisdiction, and, as already described, are only relevant if supporting countries to design robust climate actions the carbon assets are intended to be traded and facilitating comparability and linkage of their own internationally. This report focuses on the mitigation action domestic climate actions, before being extended to program-level assessment, since that assessment is markets on a bilateral, regional and international basis. expected to be used in the short term as a tool to facilitate prioritization, benchmarking, and better-designed The MAAP can be applied ex-ante and ex-post, that is, at mitigation actions. In Annex 3 there is an initial approach the design stage or during or after implementation. At the to developing the modules related to the assessment of design stage, the assessment looks at the future ability of jurisdiction efforts toward mitigation. the mitigation action to deliver its objectives and targets within a set time frame; while at the implementation stage The first four modules and their scope are the following: and after implementation, the assessment looks at the Mitigation Action Program: This module´s assessment achievements that have been reached since the last provides information on the quality of program design and assessment, as well as at the processes in place to the robustness of its implementation. It covers how the assure future deliverables1. baseline scenario has been established and the mitigation At the mitigation action level, the MAAP assesses the alternatives considered, as well as how to select a carbon integrity and the development benefits of a specific portfolio of interventions, projects, and/or policies that form mitigation action. Carbon integrity is the extent to which part of the mitigation action. It also addresses the methods the intervention is expected to result in real, measurable, proposed for calculating emissions reductions and the and long-term emission reductions. Mitigation actions corresponding Monitoring, Reporting and Verification usually include social, environmental, financial, and other (MRV) plan. development benefits which, to a greater or lesser extent, are a key driver in the decision of financing and 1 An important lesson learned after piloting the MAAP in Peru (see Annex 2) is that the ex-ante assessment will provide better insights beyond the concept stage and beyond the design of the mitigation action document. At least some level of clarity in institutional functions and capacity and/or some development in the intervention planning phase would be recommended. Executive Summary 9 Mitigation Action Management Entity: This module policies and implementation efforts will achieve the assesses the track record and capacity of the jurisdiction’s stated targets, this module assesses a management entity to design and implement the proposed jurisdiction’s credibility in the context of mitigation action. mitigation action program. A consideration of the Jurisdiction’s contribution to the Investment Environment: this module of the MAAP global emission reduction effort could also be considered, covers the level of risk linked to the investment in the context of the current level of development and environment in the jurisdiction where the mitigation action expected efforts. is implemented. The process to develop the MAAP has been inclusive, and The Mitigation Action Development Benefits module has taken into account the different viewpoints of various assesses the contribution of the program to sustainable experts from academia, think tanks, the private sector, development, beyond emissions reductions. development banks, multilateral organizations, donor countries, developing countries, and consultants. A group In the case of mitigation action assets that are intended to of technical peer reviewers from the Asia LEDS be traded internationally, as already described, the MAAP Partnership’s Asia Training Center, IDEAcarbon, and the could then be used to provide a framework for the FC2E carbon fund was also invited to do an in-depth assessment of the mitigation value of the carbon asset on review of the proposed MAAP. Public consultation an international scale. If this is the case, the program level processes were organized in Latin America, Asia, and assessment is to be complemented with two additional Europe during MAAP development. The MAAP was also assessment areas: reviewed by the International Institute of Sustainable Jurisdiction Climate Change Mitigation Credibility: In Development and piloted in Peru during the preparation order to evaluate the likelihood that the combined set of phase of the Partnership for Market Readiness. Background 10 Background Mitigation Action Mitigation action is a broad definition that includes a Mitigation Actions: a Bottom-Up Approach wide range of interventions and/or instruments (policies, projects, programs, etc.) that result in emission reductions and which a jurisdiction undertakes as part of its commitment to reduce global The lessons learned through the top-down approach to greenhouse gas emissions. Mitigation actions can be global carbon markets led by the Kyoto Protocol have designed and implemented not only at the national been useful to demonstrate that pricing carbon can level but also at the subnational level, with an active redirect investment flows into low-carbon investments. role of cities, and at the supranational level, with an However, the impact has been limited in scope, and the increased interest on using economies of scale to structure of the associated mechanisms2, among other develop mitigation actions at the regional level. In the considerations, has not facilitated large-scale emissions context of this document also referred to as reductions for the long-term. intervention, effort or initiative. The following is a non-comprehensive list that provides Unlike commitments under this first generation of carbon examples of mitigation actions and illustrates the markets during the Kyoto Protocol, the Nationally broad sense of the definition: Determined Contributions (NDCs) submitted by countries  Nationally Appropriate Mitigation Actions (NAMAs) in the context of the recent Paris agreement reflect the  Plans, ordinances, policies and regulations (national considerable discretion left to national governments on the or subnational) form, scope and timing of their mitigation contributions.  Infrastructure projects (energy efficiency initiatives, While this enables broad participation, it also means that a renewable energy generation plants) patchwork of different targets, policies and programs have  Sectorial interventions (transport, buildings, been proposed in the 195 NDCs that have been industry, agriculture, forestry, water) submitted. There is also wide variation, particularly among developing countries, in how the NDCs are to be achieved The MAAP responds to this new reality of the carbon and implemented. For example, while 40 countries (plus markets by exploring the concept of an independent 23 sub-national jurisdictions) are designing or assessment framework for a particular type of carbon implementing different types of carbon pricing instruments, asset – ‘carbon credits’. Carbon credits are generated by others are choosing crediting mechanisms, renewable reducing carbon emissions below a baseline. This is a energy standards, and/or energy efficiency measures. counterfactual scenario that is determined through While ambitious and setting the pace for a new generation analyses of the socio-political economic situations in which of carbon markets, the Paris Agreement offers little an emission reduction program takes place, and the technical guidance about how to ensure adequate design construction of a hypothetical future baseline emissions and implementation of these actions. This, therefore, scenario. But it is a counterfactual scenario – so where places significant demands for a well-functioning counting starts and how the counterfactual is defined, will framework to guide, measure, compare and track progress determine what the carbon credit is worth, not in terms of of climate actions and carbon assets, within countries and its financial value, but in terms of its impact on the climate. between them. It is, therefore, important to be aware of the assumptions Against this backdrop, this Mitigation Action Assessment and methodologies that lie beneath the counterfactual Protocol (MAAP) is proposed as a key tool for achieving scenarios in order to understand a carbon credit’s impact transparency in, firstly, how these climate actions are on the climate or its ‘mitigation value’. designed and, secondly, how they compare among each A common and widely accepted assessment framework to other and what their mitigation value is. In the long run, the determine the mitigation value of carbon credits with MAAP is intended to contribute to achieving the goal of an greater transparency in the carbon market and at the independent and internationally accepted system for program level would contribute to: comparing carbon assets and eventually, trade and exchangeability of carbon credits. Such widely-used  Facilitate prioritization and benchmark of mitigation assessment framework does not exist yet but it is a much actions, and improvement of their design and needed step in order to effectively and efficiently address implementation. climate change on a world wide scale. 2 Such as Clean Development Mechanism (CDM) or Joint Implementation (JI) Background 11  Enhance comparability across mitigation actions to common assessment framework would allow for compare different carbon credits and their mitigation comparability of mitigation actions across countries. value. In the long term, a jurisdiction might consider allowing the  Provide inputs for decisions related to trading and use of certain carbon credits from outside its boundaries exchangeability of carbon credits. for compliance within the jurisdiction. Policymakers overseeing carbon markets might face the challenge to  Increase confidence to investors on the viability and measure the exchangeability and comparability of efforts level of risk of different mitigation actions and related among markets and the relative merits of a variety of carbon credits ensuring environmental integrity. different approaches that may be developed across the In the short term, a mitigation action assessment globe. At this point, jurisdictions will be interested not only framework can help any jurisdiction at the program level to in the environmental integrity but also in the mitigation systematically self-evaluate its mitigation actions and value of the intervention. The mitigation value of a demonstrate its results. Jurisdictions are seeking mitigation action is not only determined by its isolated guidance to ensure adequate mitigation action design and impact but also by its relevance in the context of the implementation, how to prioritize a menu of mitigation jurisdiction’s level of effort and the NCM’s alignment with action options as part of their climate change strategic the jurisdiction’s goals and targets and their relevance for planning, or how to benchmark mitigation actions against a global effort towards climate change mitigation. In a others of similar characteristics to promote continuous future networked market, exchange rates might also improvements. In this sense, an assessment framework become relevant and will be agreed upon by the becomes relevant to assess environmental integrity (i.e. jurisdiction deciding to participate in the market, along with the extent to which the intervention is expected to result in the process of converting scores or assessment results to real, measurable and long-term emission reductions) and discount rates and eventually, exchange rates. to demonstrate achievements (either towards compulsory Jurisdictions are continuously seeking ways to finance goals or voluntary pledges) through increased their climate change initiatives and solutions to address transparency. At the same time, mitigation actions usually the concerns of investors. At a minimum, investors bring additional social, environmental, financial and other demand an understanding of the environmental integrity of development benefits, which to a greater or lesser extent the initiative and its associated development benefits, and are becoming a key driver for the decision of financing and investment security. When jurisdictions explore linking and implementing such actions, with the carbon credits only trading opportunities among each other, investors will also being part of the consideration for implementing the seek an understanding of equivalence and comparability program. An assessment framework can also help among the different mitigation actions promoted by jurisdictions assess the extent to which such development different jurisdictions. The assessment framework can benefits associated with a mitigation action can contribute inform these needs too. to maximizing the impact of funding allocated to a mitigation action. The MAAP is being led by the World Bank Group’s Networked Carbon Markets (NCM) initiative. In the medium term, and in a reality composed by multiple mitigation actions, implemented across jurisdictions, a 3. The Mitigation Action Assessment Protocol (MAAP) is a applicable to a wide range of mitigation actions and first step to create a common assessment framework carbon credits and useful for a variety of users. Instead of 3 The Networked Carbon Markets (NCM) initiative complements the World Bank Group's ongoing low-carbon development activities and its efforts to promote carbon markets as critical to achieving climate mitigation at large scale and in an effective and cost-efficient way. Its end goal is to collaboratively develop the post-2020 services and institutions needed for an international carbon market that links climate actions in a way that is inclusive, transparent, efficient and has environmental integrity. The three key components of the Program are: 1. Independent assessment framework to guide and assess the implementation of climate actions. The framework would provide countries with information needed to understand, compare, and eventually link heterogeneous climate actions. 2. International Carbon Asset Reserve (ICAR) to help domestic regulators manage market risks or address market failures. 3. International Settlement Platform to track cross-border trades and possible clearing house function. These three key components of the NCM Initiative are to be introduced in a phased manner, initially supporting countries to design robust climate actions and facilitating comparability and linkage of their own domestic climate actions, before being extended to markets on a bilateral, regional and international basis. Background 12 a threshold approach that results in a yes/no conclusion, Evaluation Tools: Rationale for the MAAP the MAAP proposes a risk based approach by which users assign a value to each carbon credit or mitigation action The MAAP proposes an approach that goes beyond based on performance against indicators. The indicators existing assessments or verification/validation tools. This are grouped in risk or assessment areas that assess the is because it is applicable to a wide range of mitigation fundamental aspects to be considered when designing actions to reflect the existing diversity of interventions and and implementing a mitigation action. The score assigned ultimately help carbon markets develop by reducing to the indicators is then weighted to obtain a final score for regulatory fragmentation, improving market standards and the environmental integrity and associated development enhancing risk analysis and transparency. Furthermore, it benefits of the mitigation action. The modular structure of allows for comparability among mitigation actions, and the MAAP will enable customization by the user, who may eventually exchangeability. eliminate, change or add indicators and modify the default This section explores other tools traditionally used for weights depending on the application of the MAAP. assessment or evaluation of carbon assets and climate At the stage of development presented in this document, change initiatives. the MAAP is recommended for ex-ante evaluations, that Other assessment and verification/validation tools: is, mitigation actions at design stage. However, an important lesson learned extracted after piloting the MAAP Historically the carbon market evaluation of carbon assets in Peru (further detailed in Annex 3) is that the ex-ante has used validation and/or verification processes. The assessment will provide better insights beyond the validation and verification of carbon assets, in the form of concept stage and beyond the design of the mitigation CERs from CDM, VERs from voluntary schemes or action document. At least some level of clarity in the tradable units from emissions trading schemes, are an institutional functions and capacity, and/or some important part of how emissions reductions have been development in the intervention(s) planning would be assessed as a form of carbon assets. At the project level, recommended. The MAAP can also be adapted for ex- under the CDM and voluntary markets, validation and post evaluations after implementation. verification provide a yes/no outcome on whether the project will potentially achieve its envisaged emissions The evolving nature of mitigation actions and carbon reduction targets or the actual reported emissions markets demands a flexible protocol open for reductions. This process however does not identify the improvements according to experts suggestions and relative supporting mechanisms of the projects or measure lessons learned by users when applying the protocol. It is how these are being addressed; it only attests whether expected that the initial version presented here will those minimum requirements as set by the CDM and / or continue evolving and improving as it is tested, adopted voluntary markets have been met and are delivering the and applied across jurisdictions. promised emission reductions. It is therefore currently not This document intends to familiarize potential users of the possible for the market to differentiate among these MAAP with its structure, assessment methodology, and projects that have met these minimum requirements, or to potential applications. A user’s guidance section will evaluate to what degree projects perform, vis-à-vis the orient the user in how to apply this assessment depending threshold. Although this information gap is not a problem on the desired application (such as ex-ante or ex-post in the view of a compliance market, it does limit the ability assessment, or single project mitigation action or a to compare these projects and the markets’ ability to apply program of interventions mitigation action) and what any assessment to complement current valuation tools. sources of information should be used to assess each Unlike validation/verification, a mitigation action indicator. Different users and uses of the MAAP are also assessment will allow a range of possible outcomes, discussed. In the annexes, the document explores other addressing the unique characteristics of each emission aspects that might be of interest to the reader, such as the reduction intervention, with particular emphasis on risk results of initial review processes and pilot applications, profile and the ability of the users to apply it to their and a proposed extension of the MAAP to assess particular interest area. Assessed NCMs will no longer be mitigation value and the jurisdiction’s level of ambition, unique and isolated, but will rather be comparable to other which will be a relevant step towards carbon asset initiatives, thus allowing a wide range of asset classes to exchangeability in carbon markets. be compared, valued and benchmarked on the basis of uniform scoring principles. In this context, carbon asset assessments will be useful in providing stakeholders with key insights on a range of risk factors, as well as allowing the valuation of additional development opportunities. In addition, the new mitigation initiatives being proposed around the globe give increased relevance to other Background 13 sustainable benefits beyond emissions reduction. For assessment can eventually further increase liquidity by mitigation actions like NAMAs or similar instruments, the attracting new, value-based corporate investors to the assessment should also be useful to evaluate the existing market. economic, local environmental and social development To summarize, the MAAP represents an initial step to benefits, or so-called development benefits, that the contribute to a globally used assessment framework that: intervention does or does not bring. However, while reducing emissions in a way that preserves environmental  Leads to a widely accepted mechanism to compare integrity contributes to sustainable development, the different assets on the basis of environmental integrity proposed MAAP clearly differentiates between the score and development benefits. These assets will be related to environmental integrity and the evaluation of different in nature, target different sectors and be other development benefits that can be an integral part of geographically distributed. the definition of the overall quality of the assets, and in particular of mitigation actions. From a national  Create value for implementing jurisdictions to perspective, and from the perspective of impact for donors prioritize, select and benchmark mitigation actions. or investors, both climate change mitigation and  Become a widely accepted technical input for future development benefits may be important, and the exchangeability of different carbon assets. assessment of each of these aspects would thus be of interest.  Facilitate continuous improvement and the identification of the level of effort required to improve The consideration of these two aspects, environmental the score results at a project or program level, as well integrity and development benefits, leads to the as at the institutional level. importance of having an assessment protocol that is modular, and from which different users can select the Ultimately, the MAAP should contribute to creating a more relevant parts for the outcome sought, and emphasize efficient international carbon market that offers access to a those particular areas they see fit. In addition, a broader pool of abatement options, increased market transparent assessment of mitigation actions and related liquidity and reduced price volatility. carbon credits can enable project financing through enhanced analytics and performance measurement. The Mitigation Action Assessment Protocol 14 Mitigation Action Assessment Protocol Completeness: Include all significant GHG effects, sources, and sinks in the GHG assessment boundary. Good Practice Guidelines Disclose and justify any specific exclusion. Consistency: Use consistent accounting approaches, data collection methods, and calculation methods to allow In order for this assessment approach to be broadly for meaningful performance tracking over time. accepted, users should consider the following practices Transparently document any changes to the data, GHG when applying the MAAP: assessment boundary, methods, or any other relevant factors in the time series. Be independent, transparent, and accountable, and make sure key players are engaged: Independence of Transparency: Provide clear and complete information for the organizations that assess carbon assets will ensure internal and external reviewers to assess the credibility fairness to all stakeholders. Transparency is necessary to and reliability of the results. Disclose all relevant methods, clearly understand the rules, methods, and criteria. data sources, calculations, assumptions, and Accountability and engagement will create support to the uncertainties. Disclose the processes, procedures, and system and make it move and evolve over time. limitations of the GHG assessment in a clear, factual, neutral, and understandable manner through an audit trail Provide as much certainty and predictability as is with clear documentation. The information should be practicable: This will be important to ensure that the sufficient to enable a party external to the GHG assessment is both useful and affordable at the same assessment process to derive the same results if provided time. the same source data. Clearly define functions and a framework for Accuracy: Ensure that the estimated change in GHG assigning responsibilities: This includes responsibilities emissions and removals is systematically neither over nor such as gathering of information, operation of the under actual values, as far as can be judged, and that assessment framework, and more. uncertainties are reduced, as far as practicable. Achieve The following five fundamental accounting and reporting sufficient accuracy to enable users and stakeholders to guidelines4, defined by the GHG Protocol5, are the result make appropriate and informed decisions with reasonable of a review of best practices for accounting and reporting confidence as to the integrity of the reported information. the GHG effects of a mitigation action. They have been Accuracy should be pursued as far as possible, but once useful to ensure that the MAAP includes a comprehensive uncertainty can no longer be practically reduced, set of indicators to assess environmental integrity and conservative estimates should be used. development benefits. Relevance: Ensure the GHG assessment appropriately reflects the GHG effects of the policy or action and serves the decision-making needs of users and stakeholders— both internal and external to the reporting entity. Apply the principle of relevance when selecting the desired level of accuracy and completeness among a range of methodological options. 4 IISD Supplementary Note to Carbon Integrity Scorecard (2015) 5 World Resource Institute (2014). Policy and Action Standard: An accounting and reporting standard for Mitigation Action Assessment Protocol 15 mitigation action and rates its contribution to sustainable development, beyond emissions reductions. Structure of the Mitigation Action Assessment Protocol Risk Modules: The MAAP covers four independent risk modules. The first three are applicable to the mitigation action itself and evaluate its environmental integrity, while the fourth covers the mitigation action development The different key components of the MAAP are the benefits. Each module has its own score, which is always modules, the assessment areas, and the key indicators. derived from the score of each key indicator combined Scoring Modules: The MAAP is composed of four with assessment area scores included within the module. modules, each of which is divided into assessment areas, The structure of the modules of the MAAP enables each with their own subset of key indicators. customization by the user, who may opt to eliminate, change, or add indicators and modify the default weights, Module 1—Mitigation Action Program: This module’s depending on the application of the MAAP.) score provides information on the quality of the program design and robustness of internal and external factors that Assessment Areas: Each assessment area covers a might condition its implementation. It covers how the specific risk area within a module, as illustrated in the baseline scenario has been established, the mitigation figure below. alternatives considered, and the selected portfolio of Key Indicators (KIs): Key indicators are specific interventions in the form of projects and/or policies that occurrences that can individually or collectively affect the might form part of the mitigation action. It also addresses mitigation action. They are the relevant issues detailed the methods proposed for the calculation of emissions under each assessment area. reductions and the corresponding MRV plan. The scoring of different key indicators assists in Module 2—Management Entity: This block rates the concluding on a level of confidence for each module. As track record and capacity of the management entity to already pointed out, at the design stage, the assessment design and implement the proposed mitigation action. looks at the future ability of the Mitigation Action to deliver Module 3—Investment Environment: This block of the its objectives and targets within a set time frame; while at MAAP covers the level of risk linked to the investment the implementation stage, the assessment looks at the environment in the jurisdiction where the mitigation action achievements that have been reached since the last is implemented. assessment, as well as at the processes in place to assure future deliverables. Module 4—Mitigation Action Development Benefits: This module assesses the environmental integrity of the The level of confidence can be translated to a level of implementation or development for each key indicator. For each key indicator, the MAAP includes a description of the Assessment of Mitigation Value (MV): The possible level of implementation that can be observed MAAP can be used to enable comparability, during the assessment. For example, for the key Indicator linkage, and exchange of units generated by “definition, planning and review of National Mitigation different mitigation actions. Governments that Action program objectives and targets,” the highest score choose not to trade internationally may choose to refers to the case of “the Mitigation Action objectives and apply MV to enable the comparability and linkage targets that follow the SMART6 principle. Responsibilities of mitigation actions within their own jurisdiction. and authorities related to the objectives are clearly MV has a unitary definition. It does not refer to defined. A plan exists for its implementation, and there is the atmospheric impact of a ton of CO2e ample evidence of the periodic follow-up of the targets. In reduced. One expression that has been the case of a deviation of results, actions are decided sometimes used in relation to the NCM Initiative upon and planned to correct the same.” The lowest score, and MV is that “a ton is not a ton”. This has translating a lower level of confidence in the robustness of sometimes been interpreted as implying that a the program and the possibilities of success, relates to ton of GHG reduced in one place does not have that case where the Mitigation Action does not include the same environmental effect in terms of clear objectives and targets or, more commonly, those that combating climate change. That is not the case are inconsistent across the program documentation, or are and is not the intent. MV instead applies to not communicated or deployed to the responsible units for carbon units and not of tons of carbon. implementation. 6 SMART: Simple, Measurable, Attainable, Relevant and Time measured. Mitigation Action Assessment Protocol 16 Mitigation Action Assessment Protocol Modules and Assessment Areas Assessment Area Weighting: This represents the indicator will assign a larger impact on the level of relative importance of each risk area within a module. A confidence for that specific indicator. higher weight assigned to an area will allocate more Score Range: The score range reflects the minimum and relevance to this area with respect to the other risk areas maximum scores for the observed level of development of in the module. Areas with a larger impact on the level of the key indicator. The methodology assigns, by default, confidence are to be allocated more weight. the midpoint as the score for the indicator. Nevertheless, The MAAP allows the user to predefine the weight of each the methodology allows for the user to provide a different module based on their scoring objectives. For example, for score within the range (override score). In this case, the self-evaluation purposes of a national portfolio, the score is required to justify the basis for the deviation. development benefits module may be the most relevant, Level of confidence: Proposed, but not defined in detail followed by the mitigation action management entity here, is a further evaluation of the level of confidence the module, in order to determine the most effective allocation score has in the evidence provided, where the evidence is of resources and investment to achieve reductions and qualitative. This evidence can be through internal and/or drive additional sustainable development objectives. For a external documentation. Where the evidence is development bank supporting a mitigation action, the quantitative, such as through past emissions reduction design and the management entity blocks may be the two performance, the level of confidence can be enhanced key blocks to consider at this point. through 3rd party assurance of said performance. Key Indicator Weighting: Each key indicator is also weighted within each area. A higher weight for a key The scores are then calculated as: Mitigation Action Assessment Protocol 17 The sets of indicators in this module have been classified in the following assessment areas (more detail of each key ′′ =′′ , indicator can be found in Annex 1): = ( ) ( ), Definition and Scope: The mitigation action (MA) design = should include a description of the intervention(s) and the ∑( ) timeframe for the implementation, geographical boundaries, and alignment with climate change mitigation = ∑( ) institutional priorities, among other factors. These elements set the stage for developing the MA. Objectives and Targets: The objectives should be In summary, each module is composed of risk areas that defined, contribute to climate change mitigation, and be are weighted subject to their relevance. These elements, aligned with the jurisdiction’s priorities. Targ ets should in turn, are assessed based on scores assigned to the key also be quantified, taking into account a well-defined indicators (KIs) expressed as a range (proposed as 0-40; baseline, and be well justified. 40-60; 60-100). Planning: Users should assess the extent to which their plan has been designed and implemented to achieve the MA’s objectives and targets. Plans should include a number of key elements, such as financing requirements and a description of each of the envisaged individual Description of the Modules and Indicators interventions. Roles, Responsibilities and Authorities: Identification of the roles, responsibilities, and authorities needed to Module 1—Mitigation Action Program: This module ensure successful implementation of the MA, including the provides information on the quality of the program design definition of the entities best suited for each role and and robustness of its implementation. It is a key responsibility is critical. This will help ensure that the component to assess how environmental integrity is necessary resources are available. ensured. The key indicators included in this module cover Documents, Document Control and Records: how the baseline scenario has been established, the Documentation procedures and systems are required to mitigation alternatives considered, and the portfolio of effectively manage the program and its components. interventions in the form of projects and/or policies that are There should also be an emissions reduction tracking part of the mitigation action selected. It covers the MRV system. The documentation that should be compiled and plan and the methods proposed for the calculation of archived should also be listed. emissions reductions. Barriers: Plans should identify the challenges for The MAAP presented in this document includes the key implementation. indicators for scoring prior to implementation of the mitigation action (ex-ante). At the design stage, it Emissions Reduction from Intervention(s): There addresses the scope, the mitigation program objectives should be a process to identify, develop, and evaluate and targets and their alignment with national policies and each intervention and its impact on emissions reductions, priorities. It also scores the planning of the program to including the necessary emissions reductions calculations evaluate the level of risk involved in its implementation methodologies. and the proposed investment structure and planning. For ex-ante assessments, the user should bear that the Monitoring and Reporting: These indicators should assessment will be most informative if the mitigation action assesses the extent to which an MRV action plan is is not only reflected in documents but some level of adequately designed and implemented, including key implementation of the institutional arrangements has performance indicators, GHG monitoring and reporting already started. For the post-implementation assessment, systems, third party periodic audits, and disclosure of the focus is on the results achieved, the monitoring and results. reporting of emissions, and how corrections are handled when the results deviate from their established objectives and targets. A more in-depth discussion on ex-ante and Module 2—Management Entity: This module rates the ex-post assessment can be found in section “Applicability track record and capacity of the mitigation action of the Mitigation Action Assessment Protocol: Uses and management entity to design and implement the program. Users.” It covers its investment management capabilities, Mitigation Action Assessment Protocol 18 technical expertise, and the assessment of the entity’s development benefits that can be associated to any typical management system. mitigation program are as variable as the different mitigation action options that might be feasible. The indicators in this management entity module have Consequently, a standardized assessment of the been classified in the following assessment areas (more development benefits is not possible and this module detail of each key indicator can be found in Annex 1): evaluates the process by the management entity to Management Framework: This indicator assesses the identify, plan, implement, and monitor specific extent to which relevant entities have been identified, such development benefits of the respective mitigation action as the MA Management entity, agencies responsible for program. Good mitigation actions have a clear monitoring, and others. Mandates, roles, and coordination participatory approach in defining the development among each other should also be well defined, along with benefits with the appropriate stakeholders and interest an overall management system for the MA. groups. Financial and Investment Capacity Framework: The At the same time, not all mitigation actions will be able to MA design should include methodologies to report and only have positive development benefits and as such this provide transparency on the financial flows of the MA and, or other assessments will not be an assurance that no in general, of relevant internationally financed programs. negative development benefits exists. Nonetheless, this assessment will have to assure that certain no-negative Climate Change Program Management: This indicator impacts criteria are being met by each individual program assesses the role of the MA management entity in overall to assure that a minimum level is being met. Some of the national climate change mitigation efforts, and the extent no-negative impacts could be: to which it has a dedicated area with adequate technical capabilities to promote MAs. - No negative impact on red listed species - No child labor in accordance with ILO criteria Module 3—Investment Environment: Within this - International accepted chemical waste disposal module, the MAAP covers the level of risk linked to the investment environment in the jurisdiction where the program is implemented. It draws from internationally These no-negative impacts will be assessed prior to the recognized ratings when possible related to the economic development benefits assessment and failing any of these and political situation within the jurisdiction. It also criteria will result in a no-assessment. assesses the climate change capacity at the jurisdictional The Indicators in this sustainable development module level to the extent that can impact the success of the have been classified in the following rating areas (more program in areas such as existence of registries or double detail of each key indicator can be found in Annex 1): counting. Development Objectives and Targets: These indicators Indicators in this investment environment module have assess the extent to which the MA specifically describes been classified in the following assessment areas (more and measures its contribution to different aspects of detail of each key indicator can be found in Annex 1): sustainable development (social, economic, Internationally Recognized Ratings: These measure environmental), as well as potential negative impacts. how the jurisdiction ranks in several indexes on Planning and Participation: The MA should have a competitiveness, corruption, and human development. planning and implementation evaluation process in place Climate Change Infrastructure at the Program Level: to keep track of achieved results. There should be This indicator assesses the extent to which the jurisdiction mechanisms for stakeholder engagement and participation has an infrastructure to support new MAs, a mechanism to throughout the MA design and implementation, including track all MAs and associated emissions reductions to strategic partnerships and communication systems among avoid double counting, and transparency mechanisms to participants. report on financial support received. Monitoring of Development Benefits: The comprehensive MA design should include indicators to measure contributions to sustainable development, Module 4—Sustainable Development Benefits: This mechanisms for accountability of stakeholders, and stand-alone module assesses the contribution of the mitigation plans for negative impacts of the MA. mitigation action to sustainable development beyond emissions reductions. It covers the planning, implementation, and monitoring of the social, environmental, and financial benefits and how relevant stakeholders are taken into account. The types of Mitigation Action Assessment Protocol 19 Sample Application of the Mitigation Action scored elements that will assess the different social, local environmental, and financial development benefits. Assessment Protocol By creating a matrix of the different key indicators and modules within the MAAP, each individual element will be The score for each module is the result of the aggregated assessed using predefined scoring criteria while the scores of each set of key indicators within each overall assessment result will be based on the assessment area. As already described, the assessment customization the user applies to the weight of each of the mitigation action program and the program module. This may change as the market matures and management entity, together with the investment regulated markets develop around the concept and environment assessment provide an output related to different stakeholders will have to agree on the weight of environmental integrity, whereas the module related to key indicators and modules to ensure exchangeability. other development benefits has a number of distinct The following is an example of how the different areas of the 4 modules could be weighted: Number of Key Module Rating Area Weight Indicators Definition and scope 14% 5 Objectives and targets 20% 4 Planning 22% 7 Mitigation Action Program Roles, responsibilities, and authorities 7% 5 Barriers 7% 1 Emissions reductions from interventions 20% 7 Monitoring and reporting 10% 3 Management framework 30% 2 Mitigation Action Management Entity Financial and investment capacity framework 33% 3 Climate change program management 37% 3 Internationally recognized country ratings 45% 4 Investment Environment Climate change infrastructure at the program level 55% 4 Sustainable development objectives and targets 35% 7 Development Benefits Planning and participation 45% 8 Monitoring of development benefits 20% 6 Mitigation Action Assessment Protocol 20 The following overview illustrates a potential model for the assessment of the scoring area “definition and scope” and some of its key indicators: Module Modu- Area Key KI Score KI Over- Level of Over-ride KI le Weigh Indicator Weight- Range Score ride Confidence Justification Score Area -ting ing score The scope of the NAMA is 60-100 Scope of the clearly defined and NAMA and documented. its The scope of the NAMA is 40-60 contributions 20% defined but it is not consistent 40-60 high 10 to along the documentation. Sustainable Developme- The scope of the NAMA is 0-40 nt. neither clearly defined nor documented. The scope of the NAMA is 60-100 aligned with the country climate change mitigation priorities as Definit- defined by the government. Even when the NAMA Progr- ion and addresses climate am scope 20% The NAMA contributes to 40-60 change mitigation and design of the climate change mitigation but other benefits, it is NAMA Alignment does not outline how it is taking place in a with national 20% aligned with the national 0-40 30 Low 6 sector that is not a priorities priorities defined by the focus sector for the government. country as outlined in The NAMA does not 0-40 the National Climate demonstrate how the scope is Change Program aligned with the national priorities defined by the government. The NAMAs have been 60-100 NAMA developed and implemented approval by 10% with the approval of the national 60-100 High 8 relevant authorities (Approver in the authorities UNFCCC NAMA Registry) Mitigation Action Assessment Protocol 21 Module Modu- Area Key KI Score KI Over- Level of Over-ride KI le Weigh Indicator Weight- Range Score ride Confidence Justification Score Area -ting ing score The approval of the relevant 40-60 national authorities has been requested but is still pending. There is no evidence of the 0-40 approval of relevant national authorities. The starting date of the NAMA 60-100 is clearly defined and justified in terms of when the emissions reduction can be attributed to the NAMA. Milestones are included to allow progress and Starting effectiveness to be reviewed. date, milestone The starting date is defined but 40-60 20% 0-40 High 4 and duration it is not possible to conclude of the that it is linked to the accounting Program of ER due to NAMA implementation. The starting date is not clearly 0-40 defined, is unjustified or is inconsistent across the NAMA documentation. The geographical boundary of 60-100 the Program is defined in The geographical accordance to the jurisdiction boundaries are Boundaries defined. For proposed authority of the NAMA for the interventions, the Implementation Entity (NIE). Program in NAMA identifies other 30% The boundaries analysis 40-60 40 High 12 terms of possible jurisdiction includes the evaluation of geographical that can be impacted. possible double counting risk. area Nevertheless, the The geographical boundary of 40-60 NAMA does not the Program is defined but there address how those is no justification of how it can Mitigation Action Assessment Protocol 22 Module Modu- Area Key KI Score KI Over- Level of Over-ride KI le Weigh Indicator Weight- Range Score ride Confidence Justification Score Area -ting ing score interact with the other ongoing cross effects in ER programs and jurisdictions can be quantified. The geographical boundary of 0-40 the Program is not clearly defined. As an illustrative example, assuming a user decides to apply the MAAP with the weights provided in this report, the graphs bellow show assessment results for the design module. In this case, the program results in a low score in the risk area with the largest weight—the planning of the mitigation action. A closer look to the specific key indicators can facilitate the process of identifying those areas with a lower score and define a process to improve the results of a future new assessment: Module 1 - Design Module 1 - Design Mitigation Action Assessment Protocol 23 implementation, the MAAP looks at the likelihood that the mitigation action will deliver its objectives and targets Applicability of the Mitigation Action within a set time frame (e.g.. 1 year, 5 years, etc.). At the implementation stage, the assessment looks at the Assessment Protocol: Uses and Users achievements that have been reached since the last assessment, and at the processes in place to assure future deliverables. The MAAP is intended for a variety of uses and users, and to be applied throughout the lifetime of a mitigation action. In any case, it is worth pointing out that assessing For this reason, a balance has to be struck between environmental integrity can be thought of as only an ex- including more details and elements to be assessed and post assessment to ensure that the claim of an emission ensuring that the assessment remains applicable to a wide reduction or removal for a mitigation action is for a range of mitigation actions. The assessment must also still reduction or removal that actually occurred. Ex-ante remain fairly easy to update as the mitigation action emission reduction or removal estimations are not of evolves. In order to be useful to a wide range of users and interest, as they do not have a direct bearing on how different mitigation actions, the MAAP has been designed emission reductions or removals will be estimated and in a flexible and modular manner, which allows for assessed during and after the implementation of the adaptation. mitigation action. However, because there is an interest in evaluating environmental integrity risks as well as the The MAAP users are to define the level of consistency and environmental integrity of the mitigation action at the ex- comparability they want to see as a result of applying the ante stage, the MAAP indicators proposed evaluate risks MAAP across mitigation actions. For a nascent market, such as those associated with setting a baseline from some experts recommend not allowing flexibility in the which emission reductions can be estimated, monitoring weighting of areas and their corresponding key indicators information to reliably estimate emission reductions, or once consensus has been achieved for each version of achieving the intended development benefits. the MAAP. This can be especially useful when the market wants to be able to compare the output. Users will know The MAAP presented in this document is focused on there was a uniform process in place, followed by a certain mitigation actions at the design or early implementation level of consistency by the different rating agencies stage, also referred to as “ex-ante.” This is aligned with involved. the current status of most of these initiatives, at least those developed as NAMAs. The program will only assess An MAAP tool can have different degrees of the top level of development if there is already evidence of sophistication. The more accessible forms (online, open some implementation action, also referred to as “ex-post.” code, etc.) will allow for broader use and recompilation of Even at the design stage of the program, it should still be data. More restricted forms will impact benchmarking possible to demonstrate how organizations have reacted capabilities, allowing for more detailed information to be in the past to deviations in planning and budget, and part of the assessment. The tool can easily be available whether or not they have the capacity to handle the full through a stand-alone software package that can be run implementation of the program. Programs that are through Excel in order to have individual rating outcomes documented with no implementation at all, can still get a for each of the modules. However, it would be beneficial good score, but not within the top tier. This is to reflect the for the user to also be able to operate this assessment evident risk related to programs that are just based on a through an online version of the tool. documentation exercise7. The design and implementation of mitigation actions are When broadly used, the MAAP can provide useful processes, which means various design elements of information to compare different mitigation actions, mitigation actions are likely to change over time. For that improve the design of mitigation actions, and ultimately reason, there may be an interest in conducting multiple inform the mitigation value of carbon credits with potential assessments at different stages of development of the for trade in carbon markets. Linking emissions trading mitigation actions. For example, ex-ante, during schemes has also attracted interest as a means of implementation, and ex-post. In this case, the MAAP used as a tool to measure progress toward safeguarding environmental integrity as the mitigation action is designed or implemented. At the design stage, that is, prior to 7Experience has already shown that these assessments do not to work too well for the typical case where a consultant develops a mitigation action (NAMA) fully documented and with the necessary processes comprehensively designed on paper but there has not been any implementation at all. Therefore, there needs to be some level of implementation prior to (ex-ante) emissions reductions actually happen. Mitigation Action Assessment Protocol 24 Ex-ante and Ex-post Application of the MAAP An ex-ante assessment can occur during or after implementation of a mitigation action. It is helpful to evaluate the likelihood that the intervention will deliver emissions reductions, and to assess the environmental integrity and related risks. An ex-post assessment of a mitigation action occurs prior to achievement of any emissions reductions but ideally some degree of institutional implementation has already taken place and design is not limited to only documentation. It is helpful to measure the achievements and extent to which the intervention met its goals, and will assess the processes in place to ensure that future deliverables are met. reducing compliance costs, accessing a broader pool of jurisdiction can have wider market access, including the Ex-ante and Ex-post Application of the Assessment Protocol abatement options, expanding market size and liquidity, possibility of higher value and prices for its carbon assets. 8. and reducing price volatility An ex-ante assessment can occur during or after implementation of action. It is a mitigationinvestor: helpful to evaluate Institutional Investors often seek the projects likelihood that the intervention will deliver emissions The modular approach followed by the MAAP facilitates its reductions, and to assess the environmental integrity among a wide array of investment opportunities and related that can risks. use by different users. The reason for assessing mitigation provide the best return on their invested money within their actions and the An ex-post desired outcome assessment will differ of a mitigation by user action or prior to achievement occurs overall investment risk profile. of any emissions Furthermore, reductions mitigation but ideally some stakeholder, as summarized below for implementing degree of institutional implementation has already taken place and design is not limited to only documentation. It is policy initiatives can range from projects to multi-sectoral jurisdictions, the and developers helpful to measure industry operators, achievements and extentregulators implementation to which the intervention programs. met its goals, Each and will opportunity assess can be found the processes in carbon ofplace markets, and donor countries. to ensure that future deliverables are met. in a different jurisdiction with different criteria or regimes for emissions reduction accounting, making comparison Implementing Jurisdictions: Jurisdictions willing to among them a complicated matter. implement NAMAs or other supported mitigation actions typically seek to secure international finance to fund Using the MAAP, such programs can be evaluated at the NCMs. But, it might also be the case that the jurisdiction design or implementation stage, providing a score as has established a portfolio of mitigation actions different in output based on preselected criteria and weights that can nature and scope, and therefore it may not be easy to be customized depending on the investment strategy. prioritize these for implementation and funding. In this case, the value of the MAAP lies in the ability to In such a case, the jurisdiction can scan the different prioritize investment opportunities, and in providing mitigation action programs based on preselected scoring comparability among different program types. criteria. Due to the modular approach proposed in the Developer/Industry Operator: Project developers and MAAP, the jurisdiction has the possibility to define and industry operators often seek to make the best apply the criteria most appropriate to its national investments from a wide array of development objectives and context. Such design of the scoring system opportunities. These private investors normally have makes it applicable to a broad number of mitigation limited capital to make any investments into developing actions, which will obtain different scores during the such market opportunities or new, cutting edge assessment, allowing the jurisdiction to identify which technologies, even though their risk tolerance might also actions best meet overall policy objectives. be higher due to the possible high rewards. Furthermore, Therefore, the value of the MAAP for mitigation action- private sector investment in mitigation initiatives tends to implementing jurisdictions is manifold: be somewhat limited by the technological experience of the organization, limiting its ability to venture outside of its First, it can be used as a self-assessment tool to prioritize zone of expertise. Nonetheless, many of these operators implementation and evaluate the weaknesses of different have a strong incentive to access to carbon credits, either alternatives based on a set of jurisdiction-level accepted as a salable commodity and/or for compliance purposes, scoring criteria. The jurisdiction can now assess a broad and as such, maximizing their carbon asset return per range of mitigation actions and depart from a mere yes/no invested USD may not be limited to their own field of process. expertise. Second, it can show transparently to international Using the MAAP, the developer can evaluate the carbon investors the prioritization process followed in each case, credit potential at the design or implementation stage and along with the value of each program based on an agreed- compare this potential with the operators’ own current upon weighting system for scoring criteria. In this way, the mitigation activities in order to determine whether it is best to continue developing their own activities, expand their 8 Carbon Markets: Past, Present, and Future. Richard G. Newell, William A. Pizer, Daniel Raimi. RFF Discussion Paper 12-51 | December 2012 Mitigation Action Assessment Protocol 25 activities to other sectors, or enter into purchase User Guidance9 agreements with other industry operators that are also generating carbon credits. Developers would be able to The user can choose between 2 types of assessments: 1) check the government’s willingness to advance policies An ex-ante assessment or 2) an assessment during and measures that support the development of those implementation or ex-post. All indicators are needed to activities. These operators need an output score based on conduct an assessment during implementation or ex-post, preselected criteria and weights that can be customized whereas only a sub-set of the indicators are relevant for depending on their market strategy. an ex-ante assessment. In this case, the value of the MAAP lies in the ability to Guidance on assessing mitigation actions in early stage: prioritize investment opportunities, and to provide In assessing mitigation actions, it is important to make a comparability among different program types, particularly distinction between design elements and processes that within its own sector. have been agreed upon by the main stakeholders and Regulators of Carbon Markets: For those countries those that are only planned or still in discussion. An implementing a regulated carbon market, the MAAP can assessment can seek to assess mitigation actions based be the basis for the acceptance of specific carbon assets. only on design elements that have been decided upon or The regulator can establish the minimum score for each also include in the assessment design elements that are module and therefore give a clear signal to the market of planned or being discussed, making assumptions on what type of assets will be accepted for compliance. This which elements to assess as there are likely different will also provide information to investors on what options for each design element. The assessor should mitigation actions, such as NAMAs at the national level, clearly state what is being assessed and any assumptions they may consider supporting. being made. In many cases the main benefit to an assessment of a mitigation action at an early stage is not Donor Jurisdiction: Similar to private investors, donor to generate a reliable estimate of environmental integrity, countries tend to receive multiple investment opportunities but to identify steps that need to be taken and processes in projects from multi-sectoral policy implementation to ensure the environmental integrity of the mitigation programs. Some of these emissions reductions can be action as it moves toward implementation. If the MAAP is used for meeting national emissions reduction applied only against documentation but no institutional commitments. In this case, donor countries need a implementation has yet begun, the user might have to standardized framework to establish comparability consider producing a reduced version of the MAAP to between emissions reductions from different actions (such assess only the design documents, since the whole set of as NAMAs). Donor countries will also be able to use the indicators might not provide much value at this stage (see MAAP to measure the implementing jurisdiction level of the case of Peru in Annex 3). commitment with their pledges and the institutional capability to implement mitigation actions. Guidance on multiple interventions: The MAAP would facilitate evaluation of the programs at Mitigation actions may include only one or several the design or implementation stage, and provide a score interventions. Many of the design elements that need to be as output based on preselected criteria and weights that assessed are intervention-specific. The assessor should can be customized depending on the investment seek to ensure that the interventions are well defined, as approach. part of the module 1 assessment. In assessing each of the risk areas, the assessor should assess each intervention In this case, the assessment allows for comparing different against each indicator. An assessor may choose to fill out regimes while prioritizing diverse interventions based on a an assessment matrix per intervention or provide an set of pre-defined criteria and donor jurisdiction priorities. overall score for the mitigation action as a whole. In the The final score will allow for selection of ranges, as latter case, the assessor should make a judgment call to opposed to yes/no approaches. provide an overall score for the mitigation action, considering the importance of each intervention, their respective scores and the level of risk they represent for the overall environmental integrity of the mitigation action. For example, if an intervention that poses serious risks to environmental integrity is expected to deliver only 5 percent of total emission reductions, the assessor may decide to give more weight to the other interventions’ scores. 9 IISD Scorecard Mitigation Action Assessment Protocol 26 Should there be uncertainty regarding the number and/or materiality of the risks in the context of the relevance for type of interventions, the assessor should flag this as an the organization, sector or program being assessed. The area of concern, as this situation poses a significant risk to materiality will be a result of the probability of each of environmental integrity. those risks having a negative consequence and the level of severity of the consequence itself. This first step helps Score sources: to decide which risks should be the focus of the scoring The score for each key indicator is to be decided by the process as well as the level of mitigation actions expected user through a qualitative (based on professional from the management entity to put in place to minimize the judgment) or quantitative score (based on demonstrated chances of that event happening. measurements). The availability of quantitative data in the The current incipient situation of the development of early stages of adoption can be limited until a sufficient mitigation actions, most of them at the design stage or pool of benchmarking data can be collected. Different early implementation, has led to this report and the MAAP users will establish different methods to score key not to elaborate on a specific step-by-step methodology to indicators within the MAAP, and these methods are cover this risk materiality assessment as of yet. In this expected to evolve from more qualitative to more context, most mitigation actions face similar risks and the quantitative ones over time. To ensure that qualitative MAAP includes an overall set of indicators that it thought scores based on professional judgment are reliable, users to cover all relevant risk areas. It is left to the scorer to are expected to establish different qualification and quality evaluate the need of a materiality assessment for the assurance processes that could eventually include, among specific case or cases they may confront. other things, internal peer reviews, internal score decision groups, consultation with external experts, establishing an evaluation committee formed by internal, and external experts. Assessment and risk materiality: Assessment methodologies often include a first step before the assessment takes place to decide on the Conclusions 27 Conclusions Actions to mitigate climate change are happening at In the case of emissions reductions from different different levels, from country level to city and regional mitigation actions aiming at entering international markets, efforts. Given the globally interconnected nature of it is important to take into account the mitigation value of greenhouse gas emissions and climate change, the the interventions beyond their environmental integrity. The quantification of these diverse initiatives leading to mitigation value will be determined by the contribution of reductions in carbon emissions should be internationally the mitigation action’s GHG emissions reduction in the comparable. The Kyoto Protocol mechanisms created a context of the jurisdiction where it takes place and the top-down system for measuring emissions reductions but jurisdiction’s level of ambition towards climate change given their current limited fungibility, numerous local, mitigation. This document does not fully develop how this national, and regional climate policy frameworks have level of ambition at the jurisdiction level is to be sprung up to promote emissions reductions within their incorporated in the assessment. In Annex 4, there is an own jurisdictions. In the context of the recent Paris initial approach to the key components of an assessment agreement, 195 countries submitted Nationally of the credibility of the actions implemented by a Determined Contributions that have resulted in a wide jurisdiction to achieve its voluntary or mandatory mitigation variety of approaches, yet little guidance on how to targets. adequately design, implement, track progress, and The MAAP uses a modular approach so that it can be compare these actions. A framework for assessing, and adapted by different users and the output they seek. While thus comparing, the carbon credits of these different in the long term the intended use of the assessment is to initiatives would provide a bottom-up approach to become a key technical input for the comparability and achieving the goal of an internationally comparable exchange or carbon credits, one of the evident benefits at framework for quantifying carbon assets, which is needed early stages of the development of new markets is that the to effectively and efficiently address climate change. assessment can serve as a mechanism to promote Against this backdrop, the MAAP presented in this continuous improvement of the design and implementation document is proposed as a key tool for achieving of mitigation actions. The risk areas with low scores are transparency in, firstly, how these climate actions are those in which more focus is needed to increase the level designed and, secondly, in how they compare and what of confidence. A mitigation action management entity can their mitigation value is. In the long run, the MAAP is then identify where to focus its efforts, and external intended to contribute to achieving the goal of an entities working on capacity building can also use these internationally accepted system for comparing carbon inputs for their programs. assets, and eventually the trade and exchangeability of Benchmarking is also a benefit of using assessment carbon credits. frameworks, even when commonly seen from a negative The MAAP focuses on environmental integrity and perspective when identifying low-level scores. On the development benefits, both key components of most of the positive side, being able to benchmark one’s mitigation mitigation actions under development. The MAAP covers action with similar sector interventions or similar the assessment of the risks associated with mitigation geographically focused interventions can surely be action programs, the capacity and capabilities of mitigation valuable to identify how to build on existing knowledge and action managing entities, the level of confidence increase the reliability of proposed mitigation actions. associated with the investment environment, and the claimed development benefits. Annex 1 28 Annex 1: Modules, Modules Areas, Key Indicators and Level of Development In line with the flexibility provided by the MAAP detailed below, the indicators that follow can be customized by the user to fit the purpose of their application. These key indicators cover the main risk areas that should be taken into account to assess a mitigation action. The user can add, eliminate, or edit them as appropriate, including the possibility of breaking each key indicator into a number of more specific indicators to refine the assessment. Module 1 — Mitigation action program Area Key Indicator Level of development Description of the MA technology or change in practice is complete and there is no ambiguity in how and to the extent they will be implemented Description of the MA There is ambiguity in how and to the extent technologies or A1.1 technology or change in practices will be implemented practice Description of the MA technology or change in practice is limited or not defined The scope of the MA is clearly defined and documented. Scope of the Mitigation The scope of the MA is defined but it is not consistent along A1.2 Action (MA). the documentation of the program. The scope of the MA is neither clearly defined nor documented. 1.Definition and scope of the MA The scope of the MA is aligned itself with the jurisdiction climate change mitigation priorities as defined by the Government. The MA contributes to climate change mitigation but does Alignment with A1.3 not outline how it aligns itself with the Jurisdiction’s Jurisdictional priorities. priorities on climate change mitigation as defined by the Government The MA does not demonstrate how its scope is aligned with the jurisdiction climate change mitigation priorities as defined by the Government The MAs have been developed and implemented with the approval of the relevant authorities. MA approval by relevant The approval of the relevant jurisdictional authorities has A1.4 been requested but is still pending authorities There is no evidence of the approval of the relevant jurisdictional authorities. Annex 1 29 Area Key Indicator Level of development The starting date of the MA is clearly defined and justified in terms of when the emissions reduction can be attributed to the MA. The duration of the crediting period is defined if Starting date, milestones appropriate. Milestones are included to allow progress and and duration of the MA, effectiveness to be reviewed. A1.5 including duration of the The starting date is defined but it is not possible to crediting period if conclude that the starting date is linked to the accounting of appropriate due to the MA implementation. The starting date is not clearly defined, is unjustified or is inconsistent across the MA documentation. The geographical boundary of the MA is defined in accordance to the jurisdiction authority of the MA Management Entity (MAME). The boundaries analysis includes the evaluation of possible double counting risk with other ongoing programs and Boundaries for the MA in jurisdictions. A1.6 terms of a geographical The geographical boundary of the MA is defined but there area of implementation is no justification of how it can interact with the jurisdiction authority of the Mitigation Action Management Entity and do not take into account possible double counting risk with other ongoing programs and jurisdictions. The geographical boundary of the MA is not clearly defined. The MA objectives and targets are defined and follow the SMART principle. In the case of deviation of results, actions are decided and planned to correct the same. Definition review of MA The MA objectives and targets follow the SMART principle. A2.1 objectives and targets Nevertheless, there is no evidence of their implementation/follow up or actions are not taken when deviations occur. The objectives and targets for the program are not defined or are not justifiable. The objectives clearly define the commitment to reduce GHG emission of the MA. MA objectives related to 2. Objectives and There are not clear and specific objectives towards A2.2 reduction of GHG targets reductions of GHG emissions emissions. The objectives do not define clearly a commitment to reduce GHG emissions There is a clear alignment of the MA’s objectives with the jurisdiction priorities on climate change strategy and if applicable LEDS and in addition, sectorial policies and Alignment of the MA regulations applicable to the geographical scope of the objectives and the program. A2.3 jurisdictional priorities on The MA objectives respond to the needs of specific Climate Change stakeholders (sector, sub national governments, markets, etc.) but it is not evidenced of the alignment of the MA objectives with the Jurisdiction objectives and targets towards climate change mitigation. Annex 1 30 Area Key Indicator Level of development There is no evidence of the contribution of the MA objectives to achieve relevant strategies and policies. The MA’s targets take into account the MA's baseline emissions and mitigation scenarios. The targets are based on, among others, a cost benefit analysis of the potential achievement through the intervention in different emission sources, its technological options, its financial, sectorial development goals and business requirements, and the A2.4 MA targets views of interested parties. The MA has specific mitigation targets based on the baseline assessment but there is no evidence on how the different interventions planned are selected taking these targets into account The MA includes general objectives for mitigation but not specific targets. The MA defines, implements, and maintains a plan(s) for achieving its objectives and targets. The Plan(s) include: a) designation of responsibility for achieving objectives and targets at relevant functions and levels of the Program Managing Entity, and b) the means and time-frame by which they are to be achieved, and c) benchmarks for selected policies and projects, and d) an auditable process for stakeholder engagement, including a reasonable public comment period. The program establishes, implement, and maintain a MA planning to achieve A3.1 plan(s) for achieving its objectives and targets; but it is not established targets clearly defined: a) designation of responsibility for achieving objectives and targets at relevant functions and levels of the Program Managing Entity, and/or b) the means and time-frame by which they are to be 3. Planning achieved, and/or c) benchmarks for selected policies and projects, and/or d) a process for stakeholder engagement, including a reasonable public comment period. The program does not establish, implement, nor maintain a plan(s) for achieving its objectives and targets. The achievement of the MA's Objectives and Targets is planned through the implementation of a portfolio of interventions (policies and/or projects) over a defined time period. The portfolio's components are clearly defined and it represents a combination of cost effective implementable Portfolio of interventions actions which can contribute to achieve the level of A3.2 for the MA implementation commitment of the MA. The MA includes a general Implementation Plan but it is not clearly defined which are the interventions proposed and its scope and objectives. The MA does not include a defined Implementation Plan Annex 1 31 Area Key Indicator Level of development During the planning of the MA implementation, there is evidence of the following aspects being taken into account: a) Timeline for the incorporation of the Projects and Policies in the Program, b) Estimated mitigation potential, c) An analysis of barriers for the implementation which allow the planning to be classified in short (1-3 years) and long term (>3 years) execution, Planning of individual MA d) Periodic (e.g. annual) targets for the each Policy/Project, A3.3 e) financial and investment needs for implementation, interventions f) Monitoring and reporting system, and g) Assessment processes for the progress achieved by each Policy/Project The Plan includes some aspects of the items a) to g) above for the planning of implementation of Policies and Projects but it is not complete. The Plan makes little or no reference to the topic of planning MA interventions or it is found to be inconsistent The MA clearly identifies the risks for implementation of the selected interventions and has designed a risk mitigation Risk analysis for plan. implementation, risk management and The MA identifies all the potential risks for implementation A3.4 mitigation plan. but no action is planned to minimize the probability of those risks to happen or the actions proposed are not considered sufficient. The MA does not identify the potential risks for implementation. The MA design includes an evaluation of the investment requirements and possible investment structures. It includes a realistic investment plan based on justified and The MA investment conservative assumptions. A3.5 planning There is an investment plan developed but it is not totally transparent on the assumptions used or modelled outputs. There is no investment plan; or the existing investment plan is likely to be unrealistic. The MA processes include the evaluation of regulatory and legal compliance of the interventions proposed under the program, including when applicable, environmental impact MA compliance with assessments. The processes are implemented. A3.6 regulatory requirements The process exists but there is no evidence of its application to ongoing interventions. Regulatory and legal compliance has not been taken into account. Process for the A process for the consultation of local stakeholders is involvement of local established and implemented, including the criteria for A3.7 stakeholders in the stakeholder identification and selection. Stakeholder development of Policies feedback has been analyzed and incorporated, in the and Projects under the design and/or implementation of the MA. Annex 1 32 Area Key Indicator Level of development MA, including a public The process to involve local stakeholders is mentioned but comment period. no reference on how it would be implemented. There is no reference to a process for the involvement of local stakeholders The Mitigation Action Management Entity has documented commitment to ensure the availability of resources essential to establish, implement, sustain and improve the MA. Resources including human resources with specialized skills, training and capacitation of existing staff, organizational infrastructure, technology and financial resources. Resources must be available also for MAME Resources available for and for implementation of GHG estimate and MR activities. A3.8 implementation. The Mitigation Action Management Entity is committed to ensure the availability of resources essential to establish, implement, sustain and improve the MA but there is no clear definition of the different resources or where and how they are being secured. There is no certainty as to the availability of resources essential to establish, implement, sustain and improve the MA. The MA clearly defines and document roles, responsibilities and level of authority within its scope and boundaries; it also defined the communication paths in order to facilitate Definition of roles, effective management. 4. Roles, responsibilities and level of The MA clearly defines and document roles, responsibilities A4.1 Responsibilities authority for MA design and level of authority within its scope and boundaries; but it And Authorities and implementation does not define the communication channels to facilitate an effective management. Roles, responsibilities and authorities are not defined, documented or properly communicated The PME has established and is operating a management 5. Documents, system which includes (if appropriate) documented document control procedures for the implementation of the MA. The and records management system is aligned with the PDAC (Plan, Do, MA operational and Documents, Act, Check) cycle and is both auditable and verifiable. A5.1 management documented document control system The PME has established a management system for the and records implementation of the MA, but it does not cover all areas of management required to ensure proper functioning. The MA has not implemented a management system. The MA documentation includes a complete set of controlled documents or refers to other controlled documents which include, among others: a. Documentation of the boundary for the MA in terms of a geographical area within which all interventions under the The MA design MA will be implemented and GHG effects of the MA. A5.2 documentation b. The MA objectives, targets and plans. c. A description of responsibilities and authorities. d. Feasibility study and detailed design documents, including financial and investment information e. Baseline, intervention design and methodologies for GHG emissions accounting. Annex 1 33 Area Key Indicator Level of development e. MRV plan, including records and records quality procedures, and documentation of baseline activity data. f. Documented procedure to avoid double accounting Documents that would be relevant for the MA are referred to, but the list is incomplete or controls are inadequate. The Program documentation does not include or refer to other documents relevant for the MA, A program registry tracks emissions reductions from the different interventions including possible transactions of The MA’s provisions for emissions reductions from interventions included in the MA. A5.3 tracking emissions There is a tracking system for emissions reductions from reduction transactions MA 's interventions but it is not complete. There is not a centralized record by the MAME of emissions reductions. The MA justifies that it faces barriers for its implementation and that it would not take place without external financial support. The barriers are justified based on independent data that can be verified. It is demonstrated that in the absence of the MA support: i) the proposed voluntary measure would not be implemented, (ii) the mandatory policy/regulation would be systematically not enforced and that non-compliance with those Identification of barriers for A6.1 6. Barriers requirements is widespread in the jurisdiction, implementation (iii) the MA will lead to a greater level of enforcement of the existing mandatory policy /regulation; or (iv) the MA will allow for the reduction of emissions exceeding the mandatory reductions required under existing policy or regulations. The MA argues that it faces barriers for its implementation but it is not justified how additional support would assist in overcoming those barriers. No reference to barriers. The MA includes the implementation of interventions that contribute to the MA objectives and targets. The MA has defined and implemented a process to develop, approve, implement and periodically evaluate those interventions, MA’s Interventions including the definition of responsibilities and authorities. A7.1 development process The MA includes a process to select and develop interventions but it has not been implemented yet. 7. Emissions The MA has a vague definition of what exact interventions reductions from will be part of the program or these are not properly interventions developed to ensure their implementation In those cases when the MA design includes a process to include different interventions over time, the eligibility criteria for each type of policy or project allowed under the Inclusion criteria (if MA are defined and there is evidence of its implementation. A7.2 applicable) These criteria include the type and/or extent of information (e.g. indicators, variables, parameters or measurements) to be provided by each intervention in order to ensure its eligibility. Annex 1 34 Area Key Indicator Level of development The criteria are defined but there is no evidence yet of the application of the system proposed to different interventions. Criteria are not defined or an inclusion process has not been defined. The MA includes a process for the identification of: - Geographical boundaries for each intervention. - GHG sources or sinks affected by the intervention. - GHG effects (within or outside the intervention boundaries or jurisdiction). A7.3 MA interventions - Assessment process of significance of GHG effects and boundaries and GHG selection of GHG boundaries. The process has been effects implemented and is correctly applied. The process is designed but it has not been applied yet or it implementation needs improvement actions. There is no process in place for the definition of boundaries and GHG effects or it has been systematically incorrectly used. The MA uses internationally recognized methods for the emissions reduction estimation/calculation. The method includes a process for the identification of other policy and non-policy drivers that may affect the intervention and a process for deciding its inclusion or not in the emissions reduction (ER) estimations. The methodology allows for the ER to be calculated with a GHG estimation and A7.4 level of accuracy defined for the MA. calculation methodologies Emissions are calculated based on internationally recognized and approved methodologies but there is not a level of accuracy defined for the calculations. A methodology for the calculation of ER has been developed and the MA program includes a mechanism for the approval of the methodology that ensure the methodology is technically sound. The ER calculation methods set the basis for the calculation of a baseline scenario that represents the most likely scenario in the absence of the interventions included in the MA. The baseline methodology should take into account the accuracy of the baseline emission factors and global warming potentials used, the baseline technology or practice alternatives, and emission drivers such as market and trade effects or demand/consumer effects. The The MA baseline scenario baseline scenario is calculated conservatively and defines A7.5 estimation and calculation relevant national/local and/or sectorial policies and methodologies circumstances that could affect the estimated baseline emissions have been taken into account. The ER calculation methods set the basis for the calculation of a baseline scenario that represents the most likely scenario in the absence of the interventions included in the MA. The baseline scenario defines relevant national/local and/or sectorial policies and circumstances that could affect the estimated baseline emissions have been taken into account but is not calculated conservatively. Annex 1 35 Area Key Indicator Level of development The methodologies for the estimation of the baseline scenario do not have into account other drivers of future ER. The level of uncertainty accepted in the MA GHG estimations and future ex post calculations is defined. The MA GHG estimation methods include quantitative or qualitative uncertainty assessment methods and there is an MA uncertainty approach A7.7 evidence of its correct application. and methodologies The level of uncertainty is defined but there is not a defined method for the calculation of uncertainty or it is not correctly used. Uncertainty is not addressed in the MA documents The MA has planned a process for the possible consideration of permanence when the MA design and ER The MA mechanism to methods consider a risk of non-permanence of achieved A7.8 ensure permanence (if ER over time. The process is designed and implemented. applicable) Permanence is addressed but there is no evidence of the application of the process. Permanence has not been addressed by the MA design. There is a defined process to identify, implement and periodically evaluate key performance indicators to demonstrate that the MA results are in line with its objectives and targets, including oversight of: - planning and implementation. - financial and investment. The MA Key performance - emissions reductions. A8.1 indicators process - sources and sinks - other identified sustainable development benefits Actions are taken to correct any deviation Key indicators identify but no evidence of its periodic evaluation or the key indicators do not cover all aspects of the MA objectives and targets. Key indicators have not been defined. 8. monitoring and reporting There is evidence of the design and implementation of a process for making GHG monitoring and reporting mandatory for all relevant sources and sinks. Monitoring and Reporting A8.2 (MR) enforcement mechanism Mechanism for encouraging GHG MR for some relevant sources and sinks No mechanism defined to enforce MR for any sources and sinks The MA program planning The MA establishes implements and maintains a includes a procedure to procedure(s) for periodically evaluating compliance, when legal compliance applicable, with legal requirements for the interventions within the MA. The MA includes an MRV plan for monitoring, reporting and A8.3 The MA Action MRV plan verify (if applicable) ER from interventions, the plan includes - parameters to monitor Annex 1 36 Area Key Indicator Level of development - responsibilities - frequency - uncertainty calculation - quality and accuracy of data - data management processes - internal review and corrective actions the process is designed and has been implemented The MRV plan ensures that the level of uncertainty reached when reporting ER is in accordance with the uncertainty level defined for the MA. The MRV plan is incomplete or has not been implemented or it cannot be justified that its implementation will ensure the level of uncertainty of the reported ER established for the MA. No MRV plan has been proposed as part of the MA design Publication of detailed monitoring data and evaluation against predefined key performance indicators. Clear and complete information on data sources, calculations and assumptions to enable external reviewers to reproduce emission reduction estimates Publication of MR findings A8.4 Partial publication of summary or aggregated findings and and quality of disclosure data. General availability of data sources, calculations and assumptions with some limited exemptions Limited or no publication of monitoring data. No information to judge the quality or incomplete information on data sources, calculations and assumptions. Nature Module 2—Mitigation action management entity Area Key Indicator Level of development MAME has a clearly defined mandate to implement the MA, Legal mandate of the MA 1. Management including a detailed mandate on GHG estimate and MR B1.1 management entity Framework MAME has a clearly defined mandate to implement the MA (MAME) No mandate is specified MAME, and any existing relevant stakeholders and MR supporting agencies not specified There is ambiguity or inconsistency across the MAME, other relevant documentation about the MAME. Some of all stakeholders stakeholders and MR and MR supporting entities are listed, but there are relevant B1.2 ones for GHG estimate and MR activities that are omitted or supporting agencies identified not identified yet. MAME is clearly specified. A comprehensive list of all stakeholders and MR supporting agencies, if any, that are relevant for conducting for GHG estimate and MR activities is provided. Annex 1 37 The MAME has a documented and approved framework of roles, responsibilities and authorities clearly defined and followed to implement the MA. Roles, responsibilities and There are some roles, responsibilities and authorities B1.5 authorities within the recognized within the MAME but not all along the MAME organizational structure; or although they are clearly defined, not all have been implemented. Roles, responsibilities and authorities within the MAME are not clearly defined. There are no rules or processes to ensure coordination between the MAME and the entities responsible for MR Coordination between the There are some vague rules or processes to ensure B1.6 MAME and the entities coordination between the MAME and the entities responsible for MR responsible for MR There are rules and processes in place for the entities responsible for MR to coordinate and report back to the MAME The MAME has an implemented Management System audited by a third party entity The MAME Management There is evidence of the existence and implementation of a B1.9 Management System but it is not audited by a third party System entity The MAME has not implemented a Management System at all The MAME has methodologies to reporting and The MAME transparency of financial flows received and used to date methodologies to (including actual disbursement) and complies with them reporting and The MAME has methodologies to reporting and B2.1 transparency of financial transparency of financial flows but does not comply with flows received and used them to date, including actual disbursement, etc. The MAME does not have methodologies to reporting and transparency of financial flows. 2. Financial and The MAME has a wide and recognized experience in the investment management and implementation of internationally financed Past experience in the programs management and B2.2 implementation of The MAME has some experience in the management and internationally financed implementation of internationally financed programs but is programs still strengthening its capabilities The MAME has no experience in the implementation of internationally financed programs International or national B2.3 rating of the MAME (if available) The MAME has a specific area devoted to Climate Change Programs and there is evidence of historical performance 3. Climate change Climate Change related improvements and active participation in CC programs and B3.1 programs responsibilities and initiatives. management authorities The MAME has a specific area devoted to Climate Change Programs but there is no evidence of historical performance improvements and active participation in CC programs and initiatives. Annex 1 38 The MAME has an area devoted to general environmental / sustainable subjects but with no specific Climate Change experience The MAME has an active role within the national mechanism of interinstitutional coordination to accomplish C Management Structure mitigation goals. and capacity including B3.2 inter-institutional or The MAME is enrolled in the national mechanism of sectorial coordinating interinstitutional coordination but there's is no evidence of capabilities an active contribution. The MAME is not part of the national mechanism of interinstitutional coordination. The MAME has a documented process in place to be able to identify best practices and apply this- upkeep and oversight as to the appropriate use of appropriate methodologies, their latest versions, needs of MRV vs. baseline scenarios, etc. The MAME technical B3.3 There is evidence of the adoption of methodologies and/or capability. standards but there is no process in place to align them with best practices. The MAME has not a documented process in place to be able to identify best practices and there is no evidence either of the adoption of methodologies and/or standards Module 3—Investment environment Area Key Indicator Level of development The results for the jurisdiction are among the top 25% developing countries Sustainability-Adjusted C1.1 Global Competitiveness The results for the jurisdiction are among the lower 75% Index (GCI) from the WEF developing countries The are no results of the assessment for the jurisdiction due to lack of data The result for the jurisdiction is a score higher than 75 points. 1. Internationally Corruption Perception C1.2 The result for the jurisdiction is a score between 50 and 74 Recognized Index points. Jurisdiction Ratings The result for the jurisdiction is below 50 points. Jurisdiction Economic index (decision pending on source to be agreed w WB) The result for the jurisdiction is Human Development Index higher than 0.75. Human development The result for the jurisdiction is Human Development Index C1.3 Index between 0.50 and 0.74. The result for the jurisdiction is Human Development Index lower than 0.50. Annex 1 39 There are clear definitions of authorities and their Climate change authorities responsibilities towards decision making related to MA s and C2.1 and their responsibilities are functioning. affecting the MA Definitions seem unclear or insufficient There are not this definition yet The jurisdiction has established a MA registry to track ongoing initiatives from the very early stage of development. There is an implemented process for interested parties to National MA Registry and propose a GHG mitigation program as a MA and get the authorities towards C2.2 government approval UNFCCC MA Registry (If applicable) A MA registry exist but there is not a clear process for the communication of initiatives to the Government A MA registry or other mechanism to track MA s initiatives does not exist The jurisdiction has in place a registry or a similar mechanism to track all ongoing initiatives at the National and Sub National level related to GHG emissions mitigation. This mechanism has documented procedures for the 2. Climate change registration of initiatives and for dealing with potential double infrastructure at counting of ER. these provisions has been communicated the program level and disseminated to interested stakeholders Registry and double The jurisdiction has in place a registry or a similar C2.3 mechanism to track all ongoing initiatives at the National counting and Sub National level related to GHG emissions mitigation and to serve as a mechanism to avoid double counting. Nevertheless, these has not been communicated to interested stakeholders The jurisdiction has not defined procedures for the registration of CC mitigation initiatives and to document how the jurisdiction ensures that the risk of double counting is minimized. The Jurisdiction has established the methodologies to reporting and transparency of financial flows received for climate change mitigation support. There are documented procedures, guidelines and mechanisms in place, indicators Transparency on climate are defined and properly calculated and tracked and reports C2.4 financial support received are accessible to the interested parties There are guidelines and mechanisms in place, but there are significant challenges in the indicators and reports or those are not publicly available There are no guidelines or mechanisms in place Module 4—Development benefits Area Key Indicator Level of development The scope of the MA includes a contribution to sustainable 1. Development MA contribution to development. D1.1 Objectives and sustainable development There is s general, vague reference to the scope of the MA targets and the potential contributions to development or no reference at all. Annex 1 40 The scope of the MA does not include a contribution to development. The MA has clearly identified and defined its development benefits and set specific goals and objectives for those that it intends to promote/report upon. The MA sustainable D1.2 development objectives The MA has clearly identified and defined its development and targets benefits but it has not set specific goals and objectives for those that it intends to promote/report upon. The MA does not identify its contribution to sustainable development. The MA has a documented procedure to identify and assess the environmental impacts of the interventions under its implementation, including trans-boundary impacts. The evaluation provided is in accordance with the applicable MA s evaluation of regulations. environmental impacts, D1.3 The MA identifies and assesses the environmental impacts including trans-boundary of the projects under its implementation, including trans- impacts. boundary impacts. The evaluation is not in accordance with the applicable regulations or is not provided. The MA does not identify or assess the environmental impacts of the projects under its implementation. There are clearly - identified, measured and reported - environmental benefits (non GHG related) MA non GHG related D1.4 environmental benefits (if The MA mentioned other environmental benefits non GHG applicable) related but they are not counted nor reported. The MA does not identify non GHG related environmental benefits. The MA has taken into account and established a commitment to all Social Responsibility Principles: Accountability, Transparency, Ethical behavior, Respect for stakeholder’s interests, Respect for the rule of law, Respect The MA consideration of for international norms behavior, and respect for human D1.5 Social responsibility rights. principles The MA takes into account and establishes a commitment to several Social Responsibility Principles, but the list is incomplete or the commitment is vague. The MA does not take into account a commitment to any of the Social Responsibility Principles. The MA identifies and assess the major economic benefits of its implementation such as private investments, The MA economic employment, local, sub-national or national economic D1.6 benefits of its growth and technology transfer. implementation. Major economic indicators included Vague references to economic benefits The MA must guarantee The PME guarantees the MA to be exempt of the any to be exempt of negative negative impact such as but not limited to: Impacts on Red D1.7 environmental/social/econ listed species, child labor, and it states compliance with the omic impacts International regulations on those matters Annex 1 41 The MA includes a planning process to ensure the implementation of actions to achieve the proposed development objectives. There is evidence of the implementation of this planning and the periodic evaluation MA planning process for of the same by the proper responsible entities as defined by D2.1 development benefits the PME goals achievement. The MA design planned for the implementation of actions to reach the established goals but there is no evidence of its real performance Sustainable development goals are identified but there is no planning function to unsure its achievement. Responsibilities and authorities to reach the established sustainable development goals are clearly defined and implemented. This includes mechanisms to allocate responsibilities to entities within and outside the MA Responsibilities and Managing Entity when appropriate. D2.2 authorities Responsibilities and authorities have been defined but there is no evidence of their implementation over time. Responsibilities and level of authority to ensure the success in the achievement of the proposed development goals are not defined. There are specific and documented Participation Objectives and Mechanisms for all interested parties (including stakeholders identification, convocation, participation and The MA includes the accounting). D2.3 participation of the 2. Planning and interested parties. Participation is considered, although it is not clearly defined participation the extension and the process to reach out to different stakeholders Participation of interested parties is not considered The mechanisms that allow participation in the process are clearly defined in the MA well as the relevant parties Participation mechanisms involved in the process D2.4 established Relevant actors have been identified but there are no specific activities for their involvement. There are no Participation mechanisms established Capacity and motivation The Program explains how communication and CB will be strengthened within civil carried out. society as well as among The MA makes reference to communication w stakeholders government and private but not detail on how it will be implemented or reference to D2.5 sector for holistic and all sectors to be reached out. integrated natural resources management Vague reference to the communication w stakeholders. approach. Strategic partnerships, All strategic partnerships and alliances are identified and coalitions and alliances clearly explained established to effectively The MA mentions the most relevance alliances but does not D2.6 engage in policy, decision present any detail on how those alliance would be making, and monitoring implemented. and evaluation processes. Vague reference to strategic alliances in general. Stakeholders engagement D2.7 in the development of the Stakeholders have been identified and involved in the institutional character of appropriated steps of the development process Annex 1 42 resources policy development design, monitoring and evaluation Stakeholders have been identified but there is no evidence of their involvement No formal exercise of stakeholder identification has been done The MA specifies The MA has established specific development indicators development indicators according to its scope, boundaries and sector(s) involved. D3.1 according to its scope, The MA has established general development indicators but boundaries and sector it lacks of the level of detail demanded for this action. involved. The MA does not include development indicators. The MA includes explicit and detailed references on its contribution to life conditions improvement and public welfare taking into account subjects like public health, social inclusion, security, linking to academic and government MA contribution to Life institutions, among others. D3.2 Conditions Improvements The MA makes reference to its contribution to life conditions and public welfare improvement and public welfare but no detail or relevant information is included. The MA does not make any reference to its contribution to life conditions improvement or public welfare. The MA states very clearly its contribution to strengthening public policy, institutional growth. It also includes detailed The MA contribution to information on the capacity building programs to reach strengthening public those objectives. policy, institutional growth D3.3 The MA states its contribution to strengthening public policy, 3. Monitoring of and capacity building of institutional growth but it does not include detailed development the actors/stakeholders information on the CB MA´s to reach those objectives. benefits. involved. The Program does not include its contribution if any to strengthening public policy, institutional growth. The MA includes a plan for holding different parties accountable in case of the sustainable objectives are not implemented or achieved and the consequences of it. D3.4 Accountability The MA includes a plan for holding different parties accountable in case of the sustainable objectives are not implemented or achieved but there are no consequences described. Vague reference to accountability. The MA consider possible negative impacts of its implementation and has a mitigation plan. Consideration of possible D3.5 negative impacts of the The MA consider possible negative impacts of its MA implementation but has not a mitigation plan. The program does not consider possible negative impacts of its implementation. There is evidence that the MA is flexible enough to incorporate stakeholders’ feedback that turns in actual D3.6 Flexibility changes to the MA. The MA has gathered stakeholders’ feedback but there is no evidence that it has led into changes. Annex 1 43 There is no evidence that the Program is flexible enough to incorporate stakeholders’ feedback that turns in actual changes to the program. Annex 2 44 Annex 2: Review Process This annex reflects the living nature of the MAAP and describes the evolution of the assessment over time. Despite its short life, it has been subject of a three phase consultation process, a customization and application in Peru to evaluate and select sector mitigation actions for crediting purposes (i.e., pilot initiatives to be supported as part of Peru’s Market Readiness Proposal presented to the Partnership for Market Readiness (PMR)), and an exhaustive analysis of the MAAP’s indicators to assess environmental integrity by the International Institute for Sustainable Development (IISD). The IISD also carried out two pilot projects in which the MAAP was tested in a project and a program for climate change mitigation, respectively. DNV GL DNV GL’s MAAP went through a three phased consultation process before the final version was submitted. The feedback received can be summarized in two areas: The need to include other mitigation actions beyond Nationally Appropriated Mitigation Actions (NAMAs) and develop a first assessment framework not only focused on NAMAs and developing countries, as normally seen in an UNFCCC context, but in mitigation actions in general and a system applicable to both developed and developing countries. An example would be the application to mitigation action plans in cities, indifferently of the country. The assessment of level of ambition at the country or jurisdiction level needs to be totally independent of the modules related to the mitigation action itself. This feedback was incorporated and explains why the present document refers to Mitigation Actions in general, and does not discuss the assessment of level of ambition in detail. However, a set of indicators was proposed for initial discussion and can be found in Annex 4. The first phase of the consultation process was a series of stakeholder consultations held at various internal climate change fora, such as Carbon Expo. In a second phase, progress was presented to a working group formed by experts from the Networked Carbon Markets team during group working sessions and webinars. In addition, three technical peer reviewers provided technical reviews to the draft report and components of the MAAP. These reviews were performed by representatives of Asia LEDS Training Center, IdeaCarbon and FC2E Carbon Fund who were selected based on the presence in developing countries, experience in ratings/assessments and ability to provide the point of view of the financial/private sector respectively. International Institute for Sustainable Development (IISD) The IISD has reviewed, commented and piloted the MAAP submitted by DNV GL in two case studies. IISD focused exclusively in the assessment of environmental integrity risks and from this perspective created a Scorecard with indicators building on the MAAP developed by DNV GL. DNV GL focused not only in the assessment of emissions integrity but also in the development benefits and overall implementation risk of the MA. Therefore, IISD’s Scorecard is much more narrowly focused, borrows some indicators form DNV GL’s MAAP and adapts others, and provides a more nuanced approach to assessing the methodologies and calculations of emissions reductions and baselines of MAs. The following table provides detail of the risk categories covered in the Scorecard10: Risk Categories Weights Number of Explanation Indicators Characterization Risks 10% 4 Risks related to the general characteristics of the MA 10 Scorecard to Assess Carbon Integrity Risks. Supplementary Note (IISD, 2015) Annex 2 45 Risk Categories Weights Number of Explanation Indicators Risks related to the governance and Governance and Management Risks 20% 12 management of the MA that impact the GHG estimate and MR activities Risks related to the mapping of GHG GHG Assessment Boundary Risks 20% 6 effects and the identification of sources and sinks Risks related to the baseline methodology and baseline data. The GHG Estimation Risks 20% 13 estimation of the emission reduction ex-ante is not covered as it is not relevant for assessing carbon integrity risks Risks related to monitoring the GHG Monitoring Risks 20% 7 emissions and removals from all the relevant sources and sinks Reporting Risks 10% 3 Risks related to the quality and frequency of reporting To respect the idea of the evolving nature of the initial MAAP and its continuous adaptation to the needs and suggestions of users and experts, the protocol in Annex I has been revised to incorporate some of the indicators and suggestions made by IISD. This revision, however, has been done respecting the initial spirit of DNV GL’s higher level approach and keeping manageable the number of indicators in the MAAP. IISD piloted the Scorecard in two mitigation actions, namely Sri Lanka’s Renewable Energy Program and Costa Rica’s coffee NAMA. The idea was to apply the Scorecard to both a project and a program that includes a portfolio of interventions. The review process and the application of the Scorecard to the two MAs provided the following lessons learned: There were significant challenges to obtain relevant information about both mitigation actions. This led IISD to develop a completeness checklist prior to applying the Scorecard to assess if a mitigation action is mature or developed enough to be assessed and that enough basic information is available. The completeness checklist can be seen in the table below: MA Design Elements Completeness Checklist Concept  Designation and mandate of Lead Implementing Entity, as well as supporting entities  Concept note that outlines: o MA objective o Key interventions proposed that lead to expected GHG emissions reductions and co-benefits o The sectoral, temporal and geographical scope of the MA o The baseline definition from which to establish a target or measure progress o An organizational structure for MA development that outlines institutional, technical, and supporting roles (e.g. inter-ministerial cooperation) Annex 2 46 MA Design Elements Completeness Checklist Planning  Detailed planning of MA including: o Defining a policy framework that specifies the design of specific interventions (e.g., regulations, economic incentives, disseminating information etc.) o Responsibilities of different actors in monitoring and reporting emissions and removals o Timeline for activities o Expected MA impacts  Financing Plan and budget  Monitoring and reporting plan and identification of relevant stakeholders responsible for monitoring and reporting Implementation  Measurement systems in place to collect and record data to assess performance indicators  Publication of monitoring reports that estimate emission reductions/removals and other performance indicators Closure  Final assessment of MA emissions reductions The application of the Scorecard based on secondary information has a limited use and needs to be complemented with on the ground assessments. The findings were also limited and of little use due to the fact that both mitigation actions were in very early stages of development. Annex 3 47 Annex 3: Application and Customization of the Protocol in Peru— Lessons Learned Peru used the MAAP to evaluate a portfolio of mitigation actions with the objective of prioritizing and selecting three of them that would be then incorporated in the Partnership for Market Readiness11 proposal. To that end, Peru customized the MAAP according to the country’s development and climate change mitigation and budgetary objectives, taking into account the current level of development of the proposed mitigation actions in Peru and the adopted the Peru Mitigation Action Evaluation Framework. Due to the participatory approach of the evaluation of the mitigation actions, in which the agencies responsible for each mitigation action participated, the assessment proved not only useful to prioritize mitigation actions, but also to identify areas of improvement according to the different scores obtained by each indicator. The Peru Mitigation Action Evaluation Framework was not only intended to be used to evaluate these mitigation actions and the selection of those proposed to receive further support from the PMR, the framework was established with a view to be one of the mainstays of a future Mitigation Action Registry in Peru. The adapted framework is proposed to be a key component in selecting which future mitigation actions will be accepted in the proposed registry and is formed by the Evaluation Protocol and the Assessor Evaluation Guidelines. The latter includes a detailed explanation of the different concepts used in the MAAP, the mechanics for the use of the evaluation protocol and the most common means of assessment sought after to confirm the level of development of each key indicator. As a preliminary step, up to 84 mitigation actions developed by various Ministries were evaluated. The result was the shortlist of ten mitigation actions for a detailed assessment. The short list was based in 5 selection principles: scope, development phase, mitigation action management entity selected, alignment with the sector and carbon credit potential. The evaluation took place through an interactive process between the management entity for each mitigation action and a consulting team. Consultations and interviews were supplemented by desk review of program documentation. The participation in the evaluation process was presented as an opportunity for the management entities to identify areas of improvement by analyzing the areas of the evaluation protocol where the score was not optimal. The Evaluation Protocol shows the components required to achieve the highest score so a comparison with the actual result shows what is necessary to advance to a higher level. The ten mitigation actions short listed passed to a second phase of assessment based on the Peru Mitigation Action Evaluation Protocol, and three were finally selected to be included in the PMR proposal, two NAMAs and another mitigation action. The short listed actions were in different development phases. Seven of them were at concept stage, and three were more advanced (at different stages of design, negotiation or implementation). As a result of this pilot, the consulting team highlighted the need to develop a short tool for mitigation actions in the conceptual stage since design information was lacking for the mitigation actions at the conceptual stage and only a few indicators were relevant to assess the level of definition of these actions. Hence, two different versions of the MAAP were customized, one for each group of mitigation actions. The indicators selected for the short tool can be found in table 2 below, which showcases its application to one of the selected three mitigation actions. As mentioned above, the extended version of the MAAP was adapted to the particularities of Peru and deviates slightly from the MAAP initially proposed by DNV GL, thus reflecting its applicability to different uses via customization of the modules, indicators and weights. In the Peruvian case the protocol reflects a similar structure to DNV GL´s MAAP. It is divided in 4 modules although the module Investment Environment has been eliminated and substituted by the new module Alignment with budgetary priorities, to assess compatibility with “results based budgeting system”. Also, in module Mitigation Action Program the scoring area Barriers in DNV GL´s MAAP was eliminated. A more detailed comparison at indicator level will also conclude that some indicators have been eliminated and substituted by others in the scoring area Definition and scope, and in the module Development Benefits. Table 1 below summarizes the final MAAP designed by the consultant team for the case of Peru. 11PMR is a forum for collective innovation and action and a fund to support capacity building to scale up climate change mitigation. It provides support to prepare and implement climate change mitigation policies in order to scale up GHG mitigation. Serving as a platform to share lessons, countries work together to shape the future of cost-effective GHG mitigation. (www.thepmr.org) Annex 3 48 Table 1: Modules, Areas of Assessment and Relative Weights for the Customized Assessment Protocol in Peru Relative Module Area of Evaluation Importance PM1 PM1. Definition and scope of the mitigation action 20% PM2 PM2. Objectives and goals 20% PM3 PM3. Planning 20% Mitigation Action Program PM4 PM4. Available resources, roles, responsibilities, and authorities 10% PM5 PM5. Documents, document control, and records 10% PM6 PM6 Reduction of intervention emissions 10% PM7 PM7 Monitoring and reporting 10% Mitigation Action EG1 EG1 Management framework 70% Management Entity EG2 EG2 Management of climate change programs 30% Alignment with PPR1 mitigation action in the context of Peru’s results based budgeting PPR1 30% Budgetary governance strategy, Presupuesto por Resultados (PPR) Priorities PPR2 PPR2 Sector and management of PPR 70% BD1 Scope, objective, and goals for the contribution to sustainable BD1 40% Contribution to development Sustainable BD2 BD 2 Planning and participation toward sustainable development 30% Development BD3 BD 3 Follow-up on the contribution to sustainable development 30% The following NAMAs were selected and included in the proposal to the PMR assembly: NAMA Waste (design stage) NAMA Cement (design stage) Mitigation action of photovoltaic distributed generation (conceptual stage) The application of extended protocol for the NAMA Waste, at the design stage, and the application of the short tool for NAMA Solar photovoltaic distributed generation, at the conceptual stage are showcased in the paragraphs and graphs below. Table 2: Application of the short assessment tool to the NAMA ¨Solar photovoltaic distributed generation¨ Annex 3 49 Table 2: Key Indicators Relative Relative Module Area Key Indicator Importance Importance KI PM1.1 Scope of the mitigation action 30% PM1.2 Alignment with jurisdiction priorities for 20% climate change PM1.3 Approval of the mitigation action by the 5% pertinent environmental authorities PM1. Definition PM1.4 Mitigation action supported by the and scope of the 20% authorities/entities that represent it 5% mitigation action PM1.5 Start date, milestones, and duration of the program 10% PM1.6 Limits of the program in terms of geographic area of implementation 20% PM1.7 Limits of competencies for the programs in terms of jurisdictional authority 10% PM2.1 Definition, planning, and revision of the objective and goals of the mitigation action 30% PM2.2 Objectives of the mitigation action related to i) 20% reducing GHG emissions ii) contributing to PM2. Objectives sustainable development Mitigation 20% and goals Action Program PM2.3 Alignment of the objectives of the mitigation 10% action with the jurisdiction’s priorities for climate change PM2.4 Goals of the mitigation action 40% PM3.1 Planning of the mitigation action in order to achieve established objectives 30% PM3.2 Intervention portfolio for the implementation of the mitigation action 10% PM3.3 Planning of individual interventions of the mitigation action 15% PM3. Planning 20% PM3.4 Implementation risk analysis, risk management and mitigation plan 10% PM3.5 Investment plan for the mitigation action 20% PM3.6 Compliance of the mitigation action with 10% regulatory requirements PM3.7 Participation process of local stakeholders in the development of the program's policies and 5% projects, including a period for public comments Annex 3 50 Relative Relative Module Area Key Indicator Importance Importance KI PM4.1 Available resources PM4. Available 50% resources, roles, PM4.2 Definition of roles, responsibilities, and level 10% of authority of the design of the mitigation action and responsibilities, and authorities implementation of each program and each 50% intervention PM5.1 Operational documented system and PM5. management of the mitigation action 20% Documents, PM5.2 Documentation of the program design of the document 10% mitigation action 20% control and records PM5.3 Provisions of the program for the follow-up of 60% transactions reducing emissions PM6.1 NAMA development process PM6.2 Inclusion criteria (where applicable) 20% PM6.3 Limits of NAMA and the GHG effect PM6.4 Estimates of GHG emissions and calculation 20% PM6 Reduction methodologies of intervention 10% 30% PM6.5 The methodologies for estimating and emissions calculating the base scenario of NAMA 20% PM6. 6 Level of uncertainty in the calculation of emissions 10% PM6.7 The NAMA mechanism to ensure the permanence of the emission reduction (if applicable) PM 7.1 Key indicators for follow-up 40% PM7 Monitoring PM 7.2 Follow-up of compliance 10% 30% and reporting PM 7.3 The MRV plan for the emission reduction of 30% the NAMA EG1.1 Responsibilities and authorities in the 30% managing entity EG1 EG1.2 The managing entity management system 20% Management 70% Mitigation framework EG1.3 The methodologies for reporting 30% Action EG 1.4 Prior experience in management and on a 20% Management national level of the managing entity (if available) Entity EG2 EG2.1 Responsibilities and authorities 20% Management of 30% EG 2.2 Capacity of the management structure 40% the change programs EG 2.3 Technical capacity of the entity 40% Annex 3 51 Relative Relative Module Area Key Indicator Importance Importance KI PPR1.1 Compatibility with PPR-Existence of a PPR 1 Mitigation budgetary program with the capacity to include the 20% action in the mitigation activities context of the Peru’s results PPR1.2 Planning-consistency of the design methods based budgeting of the mitigation activity with PPR methodologies 30% 30% governance PPR1.3 MRV System-consistency of the monitoring strategy, and evaluation indicators of the mitigation actions 30% Presupuesto por with PPR methodologies Alignment with Resultados Budgetary (PPR) PPR1.4 Management Entity-Implementation Priorities Mechanisms (SNIP, APP, Oxl) 20% PPR2.1 Experience of the sector in the use of the PPR mechanisms 30% PPR2 Sector and PPR.2.2 Performance of the sector in the use of the PPR mechanisms 30% management of 70% the PPR PPR2.3 Priority given by the sector to mitigation 20% PPR2.4 Level of coordination between the 20% competent offices and administrations of the sector BD1.1 Contribution of mitigation actions to sustainable development 20% BD1.2 The objectives and goals of developing sustainable mitigation actions BD1.3 Contribution of the mitigation action on social BD1 Scope, 20% impacts, economic and environmental benefits (non- objective, and GHG) Contribution to goals for the Sustainable 40% BD1.4 The contribution of the mitigation action to the contribution to Development strengthening of public policy, institutional growth 20% sustainable development and creation of capacities of the stakeholders involved BD1.5 Evaluation of environmental impacts of the mitigation action, including transboundary impacts 20% BD1.6 The mitigation action is free of negative environmental/social/economic impacts 20% Annex 3 52 Relative Relative Module Area Key Indicator Importance Importance KI BD 2.1 Planning process for mitigation actions to 20% achieve the goals of the development benefits BD 2.2 Responsibilities and authorities 15% BD 2.3 The mitigation measurement program 20% includes the participation of the stakeholders. BD 2.4 Established mechanisms of participation 15% BD 2 Planning BD 2.5 Capacities and strengthened motivation in 10% and participation civil society, as well as in the government and private toward 30% sector, for a global and comprehensive approach to sustainable resource management development BD 2.6 Associations, coalitions and strategic alliances established to effectively engage in policy, 10% decision making, monitoring and the evaluation process BD 2.7 Performance of stakeholders in the development of the institutional character of the 10% design, monitoring and evaluation of the development of a resource policy BD 3.1 The mitigation action specifies the development indicators according to their scope, 20% BD 3 Follow-up limits and sector involved. on the contribution to 30% BD 3.4 Responsibility 15% sustainable BD 3.5 Consideration of possible negative effects of 15% development the mitigation action. BD 3.6 Flexibility 15% The resulting scores were summarized in a spider diagram as shown below: Annex 3 53 Table 3: Application of the short assessment tool to the NAMA Waste Relative Evaluation Relative Maximum Module Module Area of Evaluation Importance Score Score Score Score PM1. Definition and scope of the PM1 20% 63.5 12.7 20 mitigation action PM2 PM2. Objectives and goals 20% 59 11.8 20 PM3 PM3. Planning 20% 59 11.8 20 Mitigation PM4. Available resources, roles, PM4 10% 50 5 10 Action responsibilities, and authorities 58.1 Program PM5. Documents, document PM5 10% 32 3.2 10 control, and records PM6 Reduction of intervention PM6 10% 77 7.7 10 emissions PM7 PM7 Monitoring and reporting 10% 59 5.9 10 Mitigation EG1 EG1 Management framework 70% 44 30.8 70 Action 47.6 Managem- EG2 Management of climate EG2 30% 56 16.8 30 ent Entity change programs PPR1 mitigation action in the context of Peru’s results based Alignment PPR1 budgeting governance strategy, 30% 56 16.8 30 with Presupuesto por Resultados 64.4 Budgetary (PPR) Priorities PPR2 Sector and management of PPR2 70% 68 47.6 70 PPR BD1 Scope, objective, and goals BD1 for the contribution to sustainable 40% 62 24.8 40 Contributi- 36.5development on to Sustainab- BD 2 Planning and participation BD2 30% 36.5 10.95 30 41.45 le toward sustainable development Developm- ent BD 3 Follow-up on the BD3 contribution to sustainable 30% 19 5.7 30 development Annex 3 54 The resulting scores when applying the (extended) protocol to the NAMA Waste are summarized in the following graphs below: In conclusion, the pilot in the Peru case shows that the MAAP at its current stage can be applied ex-ante (design or development stage) to mitigation actions as it was intended. It also shows that a certain level of development is required to be able to obtain valuable information and more importantly, to provide results in a somehow broad scale so it is possible to compare mitigation actions. This does not actually require that the mitigation action is already being implemented and emissions reductions produced (ex-post assessment) but that the assessment team can evidence that the required components are in place for when actual emissions reductions happen (as an example, the roles of responsibilities can be well defined and documented, the implementation plan developed and in progress, etc. during this development stage). A good number of key indicators places the score at the top assessment level only when there is evidence of implementation. As a result, most key indicators for mitigation actions at the concept stage are scored, at best, within the middle assessment level and, in the case of having to compare multiple actions at the concept stage, the conclusions are not easily noticed. In the case of Peru, as already described, a short version of the MAAP was produced with sixteen key indicators what actually provided a better picture of the status of those actions at the design stage. This short version could be used to generalize a MAAP for similar cases. Annex 4 55 Annex 4: Jurisdiction-level Assessment As described in this report, in the case of carbon assets entering the international market, the goal of this assessment system is to provide a framework for the assessment of the mitigation value of the carbon assets. In this context, it is necessary to take into account the level of ambition of the jurisdiction where the assets originate and the level of commitment to climate change mitigation, considering the reality and particularities of each jurisdiction. The MA program level assessment is then to be complemented with additional inputs to assess the jurisdiction level of ambition and the likelihood that the combined set of policies and implementation efforts will achieve the jurisdiction’s stated mitigation goals. Both the level of ambition assessment and the assessment of the jurisdiction actions credibility are still concepts under development by the World Bank group for a Networked Carbon Market. It is thought that the level of ambition can be factored in through a level of ambition index that takes into account economic, social and political parameters. This index would then be a corrective factor to the jurisdiction climate initiatives credibility accounting also for the expected level of effort of a jurisdiction compared to others. The assessment of the jurisdiction climate mitigation efforts evaluates the effectiveness of the ongoing actions to achieve voluntary or mandatory mitigation targets and seeks to confirm the alignment of the different initiatives with the climate change strategy on climate change, taking into account the results of the jurisdiction GHG inventory and those sectors where more effort is required. This assessment can be based, for example, on a protocol similar to the one developed for the assessment at the program level. In this case the quantification of the net effect of the different policies and actions to achieve the climate mitigation targets can be specially challenging and will broadly depend on the quality and availability of data in the jurisdiction. In cases where quality data do not exist, the assessment exercise can become a lengthy process of data analysis coming from very different sources. In better cases, the jurisdiction will have an overview of the different initiatives, its effect quantification and a method to analyze the cross effects of different policies and actions. Annex 4 56 Key Indicator Level of development There are mechanisms implemented for institutional coordination among different governments levels, to ensure alignment of climate change Institutional coordination, interventions, information sharing and consultation to interested parties information sharing and consultation to interested parties These mechanisms are created but there is no evidence of its correct implementation. Mechanisms for institutional coordination are not defined There are clear definitions of authorities and their responsibilities which appear to be sufficient and in line with the jurisdiction's commitments and there is evidence of their implemented. These responsibilities include, among others, Climate change authorities and those related to MA s development. their responsibilities Definitions seem unclear or insufficient or not in line with the jurisdiction's commitments or are not yet implemented There are no set definitions for these in place The jurisdiction has a process in place for capacity building at the appropriate levels of the public and private sector to ensure that resources are available for the implementation and MRV processes related to mitigation targets and interventions Capacity building There are climate change mitigation capacity building actions and programs but those do not seem to be centrally coordinated or being planned taking into account the overall jurisdiction priorities There is no evidence of a capacity building program for climate change actions The jurisdiction has defined requirements and set mechanisms to ensure monitoring, reporting and verification (MRV) of its mitigation goals and targets, the GHG inventory and climate change mitigation interventions including the projects, actions, programs, policies. Resources (including financial, staff and capacity building) are planned and available. Jurisdiction level MRV system The jurisdiction has set mechanisms but those seem to be partial, unreliable or not yet implemented, or there is no evidence of the availability of sufficient resources The jurisdiction does not have MRV system provisions in place The jurisdiction has a system in place for the registry of GHG emissions reductions from different initiatives under its jurisdiction. This GHG registry includes inclusion processes that evaluate possible double counting. The GHG registry is operational. GHG registry and double counting A national level registry is designed. Nevertheless, it does not cover all actions ongoing within the jurisdiction’s jurisdiction or there are not criteria defined to avoid double counting. A national level registry does not exist or is not operational The jurisdiction has a wide and recognized experience in the management and Past experience in the implementation of internationally financed programs management and implementation The jurisdiction has some experience in the management and implementation of internationally financed climate of internationally financed programs but is still strengthening its capabilities programs The jurisdiction has no experience in the implementation of internationally financed programs Annex 4 57 The jurisdiction has accepted a binding GHG emissions mitigation commitment (in the form of objectives and targets) as part of its participation in national or Jurisdiction participation in, international (if applicable) processes national and, if applicable, international climate change Mitigation commitments are set as a voluntary objective or conditioned to mitigation commitments and availability of external support. pledges No mitigation commitments are set as part of the jurisdiction participation in international climate change negotiations The jurisdiction has periodically reported its performance against the agreed mitigation pledges. The performance with respect to those objectives and targets has consistently improved due to actions taken by the jurisdiction. The performance against those objectives and targets is periodically evaluated and deviations assess and a plan to correct the same over time is agreed upon and executed Past performance of National The jurisdiction has periodically reported its performance against the agreed climate change commitments and mitigation pledges. The jurisdiction has deployed different instruments to pledges achieve those objectives and has agreed to specific targets. Nevertheless, there is no evidence of the continuous evaluation of the process and the actions taken to correct possible deviations. No mitigation commitments are set as part of the jurisdiction participation in international climate change negotiations or if exist, there is no evidence on the actions taken to reach the agreed targets, its planning, execution and continuous improvement process. The jurisdiction has designed and implemented a legal framework to ensure the implementation of actions/interventions towards reaching the agreed mitigation objectives and targets. The designed top-down framework contains policy and regulatory elements which has benefited from a bottom-up approach where inputs have been sought from different stakeholders. Legal framework for climate The legal framework includes provisions, as feasible as possible, to protect change mitigation these commitments from political changes. There is a legal framework but there is no evidence of its alignment with the jurisdiction goals. There is no evidence of the involvement of stakeholders in the process. There is not a legal framework yet. The legal framework has been deployed to different parts of the public and private sectors through strategy development, planning and evaluation processes. The jurisdiction goals and targets achievement has been planned using long term strategic planning (e.g. Multiyear strategy development) and shorter term implementation planning (egg. Annual or biannual planning Strategic planning processes). There is evidence of the deployment of these plans in the public and private sector. The planning exercise has been done but there is not a consistent approach to implementation of the actions agreed across the involved parties While there are specific goals and targets, these have not been planned at the long and short term to secure their achievement There is evidence of the enforcement of the legal framework and actions taken when there are deviations from the agreed objectives and targets. Enforcement of legal framework The enforcement of the legal framework is concentrated in isolated parts of the economy. Past deviations from critical sectors of the economy are consistently not addressed. Annex 4 58 The legal framework is proposed and approved but there is no evidence of its enforcement. The jurisdiction's GHG inventory is reported based on internationally accepted standards and/or UNFCCC standard; and is periodically updated. Jurisdiction's GHG inventory The jurisdiction's inventory is not done based on a reliable process or it has not been updated in the last 5 years A national inventory has not been updated in the last 10 years The GHG inventory is the basis for establishing specific mitigation targets. These specific targets cover different sectors which are the major emitting sectors as defined by the GHG Inventory. The National objectives and targets consider, among others: the level of emission in each sector of the economy, Jurisdiction's GHG inventory as the a cost benefit analysis of the potential achievement through the intervention in basis for GHG mitigation targets different emission sources. There is no evidence of the alignment of the mitigation targets and the results of the GHG inventory, specifically how targets address the largest emitting sectors. the GHG inventory is not part of the inputs for the agreed mitigation targets Expected economic development under different scenarios has been considered when establishing mitigation targets. The proposed mitigation targets are dynamic and aligned with the growth scenarios both for the overall Economic development inputs for economy and for the major emitting sectors. mitigation targets Future development has been considered as an input for defining overall mitigation targets but not at the sector level. Mitigation targets exist but do not consider future growth scenarios. In addition to the GHG inventory and future development, the contribution to sustainable development beyond GHG emissions reduction and the views of interested parties are part of the inputs to agree on mitigation targets Development benefits and participation GHG reduction and other benefits are being considered but using only a top down approach with no participation of the interested parties. Only GHG emissions reduction considerations are the basis for the agreed targets The jurisdiction legal climate change framework in place to reach the agreed mitigation objectives and targets leads to a process for the implementation of specific interventions towards reducing GHG emissions. It is possible to map the top down approach connecting the mitigation goals and targets, the legal framework for their achievement and how the interventions are aligned both with the legal framework and the agreed targets. The jurisdiction legal climate change framework in place to reach the agreed Planning and interventions mitigation objectives and targets leads to a process for the implementation of specific interventions towards reducing GHG emissions. Nevertheless, it is not possible to justify how these interventions are decided and there is no evidence of the existence of a systematic process for the identification, selection, planning, execution and periodic evaluation of the actions. A number of individual actions towards climate change mitigation are proposed in the jurisdiction but there is no evidence of the alignment between the agreed intervention, the jurisdiction's inventory results and its possible contribution to reach the jurisdiction's mitigation objectives and targets. Annex 4 59 A process to select specific mitigation interventions is in place and is applied to form a portfolio of mitigation policies and actions. This process applies a risk approach to select mitigation initiatives considering: GHG inventory Mitigation objectives and targets Actual and projected level of emissions in top emitting sectors of the economy Cost benefit analysis Feasibility of implementation In addition to emissions and relevance of the sector, interventions are selected Selection process for mitigation taking into account: interventions Technological options Financial and business requirement for relevant sectors of the economy Contribution to sustainable development beyond emissions reductions A number of interventions has been selected to contribute to achieve the jurisdiction’s objectives. Nevertheless, the selection process is not systematic or does not take into account all aspects above. Even when there may be isolated mitigation initiatives ongoing in the jurisdiction, there is no evidence of being coordinated efforts towards achieving the agreed targets. The Interventions have been defined to a level that provides a reasonable level of confidence on the emissions reduction contribution. The definition of policies and actions include: Scope Direct GHG effects Cross effects with other climate and non-climate related policies and actions. Definition of interventions Boundaries Methodology for the estimation and ex post calculation of emissions reduction, taking into account the desired level of accuracy in reported emissions. Estimation of ER Measurement, reporting and verification requirements in line with the level of accuracy desired and ensuring an acceptable level of traceability in the reported data. An overall plan to deploy interventions in different parts of the public and private sector has been agreed and is implemented. This plan includes the assignment of resources and capacity building actions at the required levels. Deployment of the portfolio of The portfolio of intervention is agreed but no coordinated effort is being done to policies and actions ensure a consistency implementation to ensure the targets are achieved and the results can be properly reported. No specific actions implemented There is a periodic evaluation at the national level of the implementation results of the portfolio of interventions and its progress against the agreed objectives and targets. There is evidence of actions taking to correct deviation when the targets are not being achieved Evaluation of the mitigation A periodic evaluation of mitigation progress is done based on the portfolio of portfolio policies and actions but there is no evidence of the actions implemented to correct deviations. The portfolio of interventions agreed is being implemented but there has not been any periodic evaluation of the results achieved so far.