Together with local partners, the Nordic Partnership Initiative on Up-Scaled Mitigation Action (NPI) is implementing NAMA-readiness programmes in the Peruvian waste sector and the cement sector in Vietnam. The aim is to establish appropriate regulatory, institutional and financial structures to drive a step change towards sustainability in the sectors.

Climate Financing: Nordic Partnership Initiative supports NAMA readiness in Peru and Vietnam

Together with local partners, the Nordic Partnership Initiative on Up-Scaled Mitigation Action (NPI) is implementing NAMA-readiness programmes in the Peruvian waste sector and the cement sector in Vietnam. The aim is to establish appropriate regulatory, institutional and financial structures to drive a step change towards sustainability in the sectors.

By Páll Tómas Finnsson

Showcase of climate action and development
NPI was launched in 2011 with the objective to develop methods to promote climate change mitigation in developing countries. The approach is based on assisting countries in developing National Appropriate Mitigation Actions, NAMAs, which are defined as “large-scale host country driven emission reduction actions, supported and enabled by international and domestic financing, technology and capacity building.”

“The NAMAs typically include emissions reductions activities that the countries also consider as suitable for their development,” says Martina Jägerhorn, Country Program Manager at the Nordic Development Fund (NDF). The NAMA readiness programmes are designed to prepare the countries for successful implementation of these actions, and to enhance their ability to mobilise climate financing.

“The objectives of NPI are to build capacity in our partner countries to enable them to structure and implement feasible NAMAs in these emissions-intensive sectors,” says chair of the NPI project group, Sara Almqvist of the Swedish EPA. “Our ambition is to set an example for the development of sustainable climate action programmes and provide experiences to the international climate negotiations. We want to encourage others to take similar action.”

Sector-wide emissions reductions in Peru’s waste management
Following the COP15 in Copenhagen in 2009, Peru identified better waste management as a climate change mitigation priority. The country’s municipal solid waste management was subsequently chosen as a pilot sector for NPI’s NAMA readiness project and allocated a budget of €2.3 million, financed by the Nordic Environment Finance Corporation (NEFCO) and the Nordic Governments. The project has been carried out in close co-operation with the Ministry of Environment in Peru.

“The waste sector is one of the fastest-growing sectors in the Peruvian economy and a source of significant and growing greenhouse gas emissions,” says Ash Sharma, Special Advisor for Climate Change at NEFCO. “The idea is to provide financial and regulatory incentives to capture more of the value from the waste stream and ensure that all waste is handled in a sustainable manner.”

A key component of the programme is a detailed inventory of Peru’s current waste streams, allowing for more precise assessments of the mitigation actions.

“The data has enabled Peru to calculate the emissions reductions potential and costs linked to each of the mitigation options,” says Almqvist. “Furthermore, the initiative has recommended an institutional arrangement for implementing the NAMA, and analysed methods and systems for MRV – measuring, reporting and verification of greenhouse gas emissions in the sector.”

NPI’s readiness programme has produced a fully-fledged NAMA proposal for the municipal solid waste sector, which is included in Peru’s national post-2020 climate action commitment. The proposal describes potential sources of financing, including the use of market mechanisms as a supplement to domestic and international finance, and suggests substantial policy and regulatory changes. The proposal also identifies three key mitigation actions: landfill gas capture with electricity generation, landfill gas flaring, and composting of organic waste separated at source.

“These technical areas that are being addressed are the biggest contributors to greenhouse gases in the sector,” says Sharma. “The project has identified the particular actions that will make the greatest difference in terms of reducing emissions for Peru, relative to the cost of abatement.”

Need for climate investment in the Vietnamese cement industry
A similar initiative is underway in Vietnam, addressing the highly energy-intensive cement manufacturing sector. The programme is jointly financed by the NDF and the Vietnamese Government, while the implementation is overseen by Vietnam’s Ministry of Construction. The total cost of the NAMA readiness support is €1.6 million.

According to Ulla Jennische of the Swedish Environmental Protection Agency, the sector could drastically decrease its greenhouse gas emissions by improving energy efficiency and switching to alternative fuels. Analysis conducted within the project suggests that the sector’s emissions could be reduced by 138-166 Mt CO2e by 2030.

“In the long-term, emissions reductions from increased energy efficiency would be profitable,” Jennische says. “Despite this, the necessary investments are not being made. It’s difficult to obtain capital and credit for this type of investment in the current environment.”

As in Peru, the partnership initative has collected extensive data on the Vietnamese cement industry, and identified cost-efficient actions to reduce greenhouse gas emissions. Furthermore, the MRV-system developed under the project is an ambitious example of how monitoring, registration and verification can be organised in the context of international development initiatives.

“The MRV-system will allow Vietnam to monitor the sector’s emissions as well as the co-benefits of the climate mitigation actions,” says Jägerhorn. “Our hope is that this will enable Vietnam to attract considerable domestic and international climate financing.”

A draft readiness plan was launched in October 2015 and is currently being reviewed by stakeholders. NPI’s NAMA readiness programme in Vietnam will be finalised by the end of April 2016.

christian friis bach
Under-Secretary-General of the UN Christian Friis Bach on the Nordics and the SDGs

“The waste sector is one of the fastest-growing sectors in the Peruvian economy and a source of significant and growing greenhouse gas emissions”

Ash Sharma, Special Advisor for Climate Change at NEFCO

Read more at www.norden.org/npi