Latvia s Participation in International Emissions Trading The World

Latvia’s Participation in International Emissions Trading The World Bank Assistance in Options Study and Advisory Service Kyoichi Shimazaki The World Bank Moscow, April 28, 2008 1

Latvia is on the fast track to IET • In April 2006, Cabinet of Ministers adopted a concept of IET participation and earmarked 40 million AAUs for potential sale. • In November, 2007, The law on Latvia’s participation to IET ratified by parliament. • Latvia intends to sell up to 10 million AAUs as pilot transactions. • Necessary secondary legislations and implementation arrangement will be in place by mid 2008 2

The World Bank Assistance • IET Options Study Completed in April 2007 Published as “ECSSD sustainable development working paper No. 47” http: //web. worldbank. org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/EXTECA REGTOPENVIRONMENT/0, , content. MDK: 21335829~page. PK: 34004173~pi. PK: 3 4003707~the. Site. PK: 511433, 00. html • Advisory Service on the Design of Implementation Arrangement for IET Trading Launched in September 2007 and ongoing 3

Latvia’s Advantages as AAU Seller • Low risk of non-delivery • High credibility of “greening” implementation • Variety of “greening” activities to meet AAU buyers’ preferences • Solid legal framework to support GIS • Strong political commitment • Lower sovereign risk compared with other AAU seller countries 4

AAU Transaction with Latvia 5

Latvia’s Greening Programs • 18 types of greening activities have been identified including; - efficient use of biomass and geothermal energy, - biomass combined heat an power, - small hydro and wind power, solar energy, - promotion of biofuels, biogas utilization, - energy efficiency in generation and buildings, - DH rehabilitation, - capacity building for GIS, monitoring and verification - reduction of local pollutant, - climate change adaptation, - R&D for low carbon technology, etc. 6

Project Eligibility Criteria • • Satisfy buyers’ needs for legitimate greening Meet legal requirement Confirm economic justification Financial feasibility Implementation readiness Verifiable benefits Support wider sustainable devlopment objectives 7

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World Bank Advisory Service Assist Ministry of Environment in developing and preparing… • government work plan for AAU transaction and Climate Change Financing Instrument (CCFI) • TORs for discreet activities to support GIS implementation • design options for CCFI financial management • escrow arrangement • verification and monitoring procedures • Idea of AAU pricing , etc. 9

Contact in Latvia Mr. Valdis Bisters Director of Climate and Renewable Energy Department Ministry of Environment Peldu iela 25, LV-1494 Riga, Latvia Phone: (371) 7026 417 E-mail: valdis. [email protected]. gov. lv Website: www. vidm. gov. lv 10