Challenge

For the Kyoto mechanisms to work smoothly, host and investor countries alike will need to develop their institutional capacity for the review and approval of emission reduction projects. Foreign investors, already wary of the onerous administrative procedures they face in many transition and developing countries, will look for host countries where CDM responsibilities and policies have been clarified. In particular, they will be interested in countries where effective, transparent procedures for the processing of proposals have been established. Furthermore the sustainable development aims have to be stated clearly and the procedures for socio-economic impact assessment and/or an environmental impact assessment have to be defined.

Objective

Therefore it is the objective of the EU funded technical assistance project to develop a clear and transparent CDM implementation structure to attract foreign direct investment (FDI) in CDM projects.

National Climate Change Activities

Armenia signed the UN Framework Convention on Climate Change (UNFCCC) on June 13, 1992, and ratified it on May 14, 1993. In 1998, the country prepared its first National Greenhouse Gas Inventory (GHG), which was incorporated in the Initial National Communication of Armenia to the UNFCCC and submitted it to the Conference of Parties at COP 4 in Buenos-Aires. On 25 February, 1998, the Government of Armenia has further adopted a Decree no.115 on Measures to Perform Obligations of the Republic of Armenia under a Number of Environmental Conventions, which set forth the state agencies responsible to perform different tasks under the UNFCCC.

The “Armenia - Country Study on Climate Change” UNDP/GEF Project has conducted the national inventory of greenhouse gas (GHG) emissions for 1990 as the base year, projections of future emission trends up to 2010, potential impacts of climate change, ecosystem vulnerability and health implications, mitigation and adaptation measures. These have been further summarize in Armenia’s First National Communication presented to the fourth Conference of Parties to the UNFCCC, and can be found in the Internet (at www.nature.am).

As non-Annex I Party to the UNFCCC Armenia has no binding commitments to reduce greenhouse gases, however the GHG mitigation strategy of Armenia acknowledges the willingness of the country to implement mitigation measures given the availability of necessary financial assistance.
In December 2002 the National Assembly of Armenia has ratified the Kyoto Protocol, becoming the 108th party to join the Protocol. The Armenian Ministry of Nature Protection has been appointed as the Designated National Authority (DNA) for Clean Development Mechanism (CDM) implantation purposes, thus completing one of the initial requirements of becoming a CDM host country.

Other efforts aimed at strengthening the climate change institutional capacities included the following:

• The Steering Committee was formed for the domestic implementation of the UNFCCC and national climate change activities
• A manual of scientific papers entitled “Armenia: Issues of Climate Change” has been published as a compendium of articles of Armenian scientists on climate change issues
• An information center furnished with state-of-the-art equipment has been created, which builds up information on the climate change issue
• The Second Phase was implemented producing the Assessment of National Climate Change Mitigation Technology Transfer Needs
• Armenia National Capacity Self-Assessment for Global Environmental Management was conducted evaluating the needs associated with strengthening of existing institutional mechanisms and developing networks for synergetic environmental management
• The Capacity Building for Improving the Quality of GHG Inventories (Europe/CIS) Project is under implementation and is aimed at eliminating data gaps, improve documentation and archivation as well as establish sustainable inventory mechanism
• The Stock-Taking exercise has started to develop the proposal and define the priority activities to be implemented under the Second National Communication to the UNFCCC.

Interagency Process with Awareness Workshop

As part of this project it is intended to arrange several roundtable meetings with key stakeholders on CDM structures. Furthermore, a full-day national awareness raising workshop will be organized with the goal of 20 participants in each of the four host countries.

The principal stakeholders concerned with CDM in each country include:

• Government / Ministry of Environment / National Focal Points, in charge of the international agreements and Memoranda of Understanding;
• Environmental agencies responsible for technical CDM implementation;
• Research institutions in the area of energy or forestation;
• Representatives of GHG emitters (thermal power stations, district heating generators, industry, in Azerbaijan oil and gas industry) that might host potential CDM projects;
• NGOs

Development of CDM Action Plan

As one of the first project activities an action plan on setting up an appropriate CDM structure in each country will be developed. This action plan shall include:

• Division of responsibilities and CDM approval structures;
• Country-specific CDM criteria (if any);
• Road map with time plan to implement the envisaged CDM structure;
• Decision tree and time plan for approval process of CDM Project Idea Notes (PINs) and CDM Project Design Documents (PDDs).
• Manual for CDM projects, taking into account decisions by the Executive Board (e.g. baseline and monitoring methodologies).

It is intended to discuss this action plan with key stakeholders and to advise its approval by the relevant Ministries and agencies.

CDM Process Workshop

A CDM process workshop will be organized in the second project year, as a follow-up activity and with a similar group of participants as the workshop. Subject of the workshop will also be a draft CDM Action Plan.

In September 2004 a series of CDM Awareness Raising Workshops was held in all four beneficiary countries comprising of 20 to 50 participants in each country.