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MDGF-1654: THE CHINA CLIMATE CHANGE PARTNERSHIP FRAMEWORK

PLEASE NOTE THIS CONCEPT NOTE IS THE ORIGINAL SUBMISSION TO THE FUND. IN MANY CASES INDICATIVE BUDGET AMOUNTS APPROVED BY THE STEERING COMMITTEE ARE CONSIDERABLY LOWER THAN THAT REQUESTED AND INDICATED HERE-IN. FINAL BUDGET AMOUNTS WILL ONLY BE AVAILABLE AFTER APPROVAL OF THE FINALIZED DETAILED JOINT PROGRAMME DOCUMENT.
Wed, 2007/06/06 - 4:42am — steven.sabey@un...
Wed, 2007/06/06 - 6:09am
Thu, 2007/06/14 - 11:32am
steven.sabey@undp.org
English  (current)

ID: MDGF-1654

Environment and climate change
Round 1
(26/04/2007 - 31/12/2009)
China
$12,000,000
36 Months
THE CHINA CLIMATE CHANGE PARTNERSHIP FRAMEWORK

Attached Documents:

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A. Applicant Information

Asia and Pacific
  • Lower Middle Income Country
  • Medium HDI, according to UNDP's 2006 Human Development Report
  • Khalid Malik
  • khalid.malik@undp.org
  • Steven Sabey
  • steven.sabey@undp.org
  • Subinay Nandy
  • UNDP - United Nations Development Programme
  • Country Director
  • subinay.nandy@undp.org
  • Cristobal Tunon
  • WHO - World Health Organization
  • Deputy Representative
  • TunonC@chn.wpro.who.int
  • UNDP - United Nations Development Programme ($3,700,000)
  • UNICEF - United Nations Children's Fund ($1,000,000)
  • WHO - World Health Organization ($1,500,000)
  • UNESCO - United Nations Educational and Scientific Organization ($1,000,000)
  • FAO - Food and Agriculture Organization of the United Nations ($1,600,000)
  • UNIDO - United Nations Industrial Development Organization ($1,500,000)
  • ILO - International Labour Organization ($200,000)
  • ESCAP - Regional Commissions: Economic and Social Commission for Asia and the Pacific ($200,000)
  • UNEP - United Nations Environment Programme ($1,300,000)
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B. Concept Note

Climate change presents a challenge to global achievement of MDGs and sustaining hard won gains of developing countries. Given implications for development, climate change mitigation and adaptation have become a primary challenge and the ability of the world to avoid future crises rests on the ability of China to take targeted actions to mitigate climate change. On June 4 2007 China published its 1st National Climate Change Strategy with key direction to achieve targets on mitigation and adaptation. This followed the January launch of China’s first-ever National Climate Change Assessment showing scenarios of reduced food, land and water security and recommendations for adaptation measures. This programme implements the new National Strategy through national policy/legal measures and improved local capacities and partnerships for financing and technology. It aims to ensure that vulnerable communities– including the world’s biggest rural population – can adapt to climate impacts.

Since 1978, China has grown by around 9% per annum. It has lifted 400 million people out of poverty and become the world’s fourth largest economy. But it remains a developing country with GDP per capita of $1,740 and 135 million people still living on less than $1/day. And its unprecedented growth has led to it becoming one of the most environmentally stressed countries in the world. In particular, China will soon be the world’s top emitter of GHGs. Given stronger evidence provided by the UN Inter-Governmental Panel on Climate Change that human emission of greenhouse gases are causing climate change and that serious risks exist for the future of development, it is clear that continued emissions from China will have profound implications for human development the world over. The Government of China attaches increasing importance to this problem. The 11th Five Year Plan (2006-2010) signals a shift in China’s vision from a focus on economic growth to a broader vision of a balanced ‘Xiaokang’ society, in which the needs of the economy are balanced with broader environmental and social needs. This included national targets to increase energy efficiency by 20% by 2010 and to increase use of renewable energy from 5% today to 10% by 2010. These targets are far from being achieved. Operational policies and partnerships are now urgently needed if such targets are to be met. China’s ability to achieve such targets is not only a concern for China, but also for the world. The programme supports strategic analytical capacities to deal with such issues in line with global best practices. This will build on the UN’s strategic position as advisor to the Government on global climate change, including strong delivery capacities having approved over $500million of support to China since the 1992 UN Climate Change Convention came into force. By focusing on key strategic issues of added value to UN/donor efforts in China, the programme will serve as a catalyst for change, as seed money and a base for further mobilization of co-financing from the international community, the private sector and the Government of China itself, expected to be generated at a ratio of 2:1 to MDG-Fund contributions. Significant gaps particularly exist in local implementation of such policies, with needs to pilot innovative market based approaches to investments in sustainable energy. The urgency of the situation and the increasing global call for action has resulted the realization that increasing GHG emissions not only impact global development but also the sustainability of China’s own hard won development gains. With per capita water availability already a quarter of the world's average, and with half the country already experiencing significant land degradation issues, it is now clear that future pressures could constrain the ability of China to sustain its laudable poverty reduction achievements and could well catalyze a reversal of progress in certain areas. This realization has signaled the need for urgent actions on both mitigation and adaptation, particularly for vulnerable poor communities. A sign of the urgency being given to the issue is the launch on June 4, 2007 of China’s first-ever National Climate Change Strategy, outlining concrete actions to reduce the carbon intensity of China’s future growth. It focuses on intensity based energy use targets in anticipation of the post-Kyoto regime, adoption of innovative technologies in coal power generation, coordination of climate change and energy policies through comprehensive energy legislation, increased efforts to achieve efficiency and renewable energy targets at local levels, and mainstreaming adaptation in future development and investment programmes.

The programme seeks to deliver a shift in climate change policies in China, in both public and private sectors, and to develop innovative models and pilot projects requested by our Chinese partners with a view to scaling-up in the future. Through the resulting national policies and local models, climate risks will increasingly be mainstreamed into development, and adaptation actions will be commenced in priority provinces and sectors. There are three key outcomes under the programme: 1) Mainstreaming climate change mitigation and adaptation into national and sub-national policies, planning and investment frameworks. 1.1. Improved policies and partnerships at national level to mainstream climate change mitigation and adaptation into policy frameworks 1.2. UN-business partnerships and new ‘green’ financing mechanisms to mainstream climate change and energy into investment frameworks and business practices 2) Innovative partnerships and technologies to increase local access to sustainable energy. 2.1. Innovative models at local level for energy efficiency 2.2. Innovative models at local level for renewable energy and clean coal 3) Accelerated action by China on climate change adaptation. 3.1. Climate proofing of poverty reduction programmes in less developed areas of Western China 3.2. Policies and capacities developed to manage environmental health issues from climate change 3.3. Capacities enhanced and policies developed for understanding and adapting to impacts of water supply changes on China’s environment and development 3.4. Enhanced strategies for climate proofed and environmentally sound agricultural production The basic strategy of the programme is to support the high level policies needed to achieve climate change goals in China, and to couple that with innovative pilot partnerships and technologies on the ground. Given the experience of the UN in China, once a successful pilot in demonstrated, China moves quickly to expand the approach and replicate in for wide use. This ensures that capacities build during the programme have long-term, lasting impacts. Sustainability is also supported by the strong ownership of Chinese partners in each of the proposed outputs and activities and the high levels of trust placed in the UN system in China. The programme will be mainstreamed into core processes in China and thus into future budgeting and programming by China itself. Through the International Climate Change Centre, lessons learned, knowledge and experiences will be shared globally, with emphasis on south-south cooperation. The Government is looking to the UN as a key partner in this area, not least because of the UN’s neutrality in this politically charged area, its proven ability to deliver in China and its strong ongoing interventions. This new programme will complement existing UN and donor activities in China. Work on this outcome is driven by a UN Theme Group on Energy and Environment, which has led design of this proposal. The programme has been designed with other programmes in mind, including World Bank and ADB projects on energy investments and sustainable transport, DFID on adaptation, clean coal and economics of climate change, EU Kyoto implementation and efficiency, UNESCO MAB programme, and links to GEF energy efficiency, renewable energy and biodiversity programmes. It avoids overlaps, aimed at adding value and supporting catalytic efforts in line with the new National Strategy and the UNDAF (2006-10).

The major activities planned under the above outcomes and outputs are as follows. Many of the impacts of climate change threaten to have differential impacts by gender, thus gender will be mainstreamed throughout the programme outputs and activities. Output 1.1: China has requested UN assistance in capacity development for Post-Kyoto analysis and design of China policy responses as it formulates its position over the next three years for the post-Kyoto negotiations to open in Bali in December 2007. Such assistance will also go towards developing new mechanisms and financial systems for technology transfer. This holds importance for future emission stabilization, as China currently supplies 60% of the world’s emission reduction credits. An International Climate Change Centre would also be established in Beijing to serve as a knowledge hub for global best practices on mitigation and adaptation and facilitate south-south cooperation to share China’s successes in carbon trading and other areas with other developing countries in Asia and Africa. Support goes to convening a new High-Level Climate Change Policy Task Force between UN, government, bilateral, business and NGO partners to guide strategic policies, monitor progress on implementing the National Climate Change Strategy, and coordinate international assistance and actions. This could include links to existing task forces such as the China Council on International Cooperation for Environment and Development. The UN will help write a new Basic Energy Law for China, to become the central legal framework for energy security and climate change issues over the next years. The UN will bring in comparative analysis, market approaches, and ways to achieve rural energy security for achieving MDGs in poor areas. Output 1.2: A UN-Business Compact on Climate Change will be established to engage multinational and local companies on corporate responsibility for climate change and energy. This includes issues within multinationals in China and within Chinese firms operating in Africa and elsewhere, and within key sectors like finance and banking. Furthermore, with China increasingly serving as a base for the production of resource-intensive products for consumption by the West, there is a growing link between the demands of consumers in the West for climate change-friendly products from multinational firms producing goods in China and a historic opportunity to integrate such concerns into manufacturing and other operations of multinationals within China. Output 2.1: Large improvements will be made in energy efficiency in town and village enterprises (TVEs) (known as small and medium sized enterprises in other countries) in key sectors and provinces where potential exists to prevent future GHG emissions. TVEs account for 30% of GDP while emitting 50% of China’s GHG emissions. The focus is on innovation; laying the groundwork for breakthroughs that can then be up-scaled with local resources. This includes innovations in technologies and financing as well as improved local policy and enforcement capacities. This will reduce GHGs while also improving the economic viability of TVEs and rural incomes. Output 2.2: Support will also go to innovative use of renewable energy towards poverty reduction and MDGs. In particular a new biomass pellet system will be piloted to replace household coal use, reducing GHGs and human health impacts, particular emphasis on health of women and children. Support also goes to sustainability of results through better functioning local energy service providers to support connectivity of renewable energy to the grid. Finally, support goes to mobilizing partnerships, financing and technology for piloting new clean coal operations. With about 70% of China’s power supply from coal plants, an urgent challenge is to sequestrate and store emissions as the heavy dependence on coal power is expected to continue into the future, bring major risks to the global ecosystem. Here too, the focus is on laying the groundwork for breakthroughs that can then be up-scaled with local resources. Output 3.1: China is placing heavy emphasis on new investments and programmes over the next years to achieve the MDGs by 2015 in less developed areas of Western China. The programme will use the UN Millennium Ecosystem Assessment framework and economic impact assessment frameworks to analyze key climate risks to poverty reduction and livelihoods in key areas like Tibet, Xinjiang and Qinghai - to ensure that adaptation measures can be integrated into future development investments. This includes issues of glacial melting of the Himalayas and shifting patterns of land and water use for large upstream and downstream populations. It will also assess the impacts that rising seas levels will have on the southeast coast of China, the industrial base of China, and increasingly of the world. It also includes particular emphasis on impacts to livelihoods of women who make up a major section of the rural population. Output 3.2: One of the key adaptation challenges facing China is the human health impact of climate change and rising pollution levels. The programme will help develop capacities to implement climate change/energy aspects of a new National Environmental Health Action Plan to be passed in late 2007, specifically establishing monitoring and health risk assessment related to climate change. Output 3.3: Assess climate impacts on water security in China, and chart the course of preventive actions. In line with the UN World Water Assessment framework, this activity will define vulnerable areas and identify risks and mitigation measures to sustaining MDG achievements especially for the most vulnerable, including women and children. Special focus will go to the effects of climate change on groundwater and charting timely and sustainable responses. There is no groundwater monitoring system in China, yet it provides most of drinking water supplies. The programme will build capacities to track the effects of climate change on groundwater. Output 3.4: Food security is one the urgent issues resulting from climate change. The programme will focus on developing strategies and actions to adapt to climate change in the Yellow River Basin, China’s breadbasket. This includes policies and on-farm technologies that incorporate production, socio-economic and environmental factors. The activity will focus on adapting to both current and future challenges, including pollution control. The strategies generated will serve as examples for replication in other areas.

Indicators Outcome 1: • A post-Kyoto framework agreed by 2010 with strong Chinese participation (Baseline: no Chinese or global strategy for a post-Kyoto framework) • Launch of Basic Energy Law by 2008 and effective enforcement by 2010 for efficiency and renewable use (Baseline: no basic energy law in China) • High level Climate Change Policy Task Force and UN-Business Compact launched in 2008, resulting in high level policies and actions to mitigate and adapt to climate change in China and overseas. (Baseline: no regular dialogue between UN, Government or Business on climate change and energy security) Indicators Outcome 2: • 3 pilot sites for SME energy efficiency in bricks sector, and 30 replicated sites established, reducing C02 emissions by 500,000 ton/year and saving 200,000 tonnes of coal equivalent per year (Baseline: no pilot or replicated sites and no C02 or energy savings) • Increased use by households of biomass instead of coal, with reduced health problems and emissions, better local energy providers by 2010 (Baseline: lack of access by poor communities to sustainable energy and lack of local capacities to link renewable energy to power supply systems) • Local strategies in key provinces for clean coal use, and 1 model clean coal power plant in operation by 2010. (Baseline: no local strategies, no pilot plants operating) Indicators Outcome 3: • Links between climate and ecosystem change and investment programmes understood by policy makers and mainstreamed into select investment/development projects in Western China (Baseline: lack of understanding of implications of climate change for human development) • Risks of climate change to water security and remedial actions identified (Baseline: there has never been such an assessment. Data fragmented and not reviewed for climate change impacts) • Integrated groundwater monitoring system to monitor climate change, generating new set of primary data to trigger action, also to inform policy for nation-wide replication (Baseline: No current system). • Selected Yellow River basin provinces have action plans identifying win-win strategies that address adaptation to climate change and control of agricultural pollution. (Baseline: no provinces have plans) If this concept note is approved, annual and three-year targets will be established as part of programme design. Key risks to implementation will also be elaborated at design stage and built into the monitoring framework and the functioning of the partnership itself will also be monitored in order to determine if it is effective and generating benefits for expected outcomes. In addition a composite tool will be developed, encompassing factors such as commitment to partnership, ownership, etc.

The UN Country Team in China consists of 21 agencies. Through the UN Theme Group on Energy and the Environment (UNTGEE), it has a strong track record of both analytic and programmatic collaboration. The Theme Group has developed joint programmes, not least the UNDP-UNEP-World Bank $20m biodiversity partnership programme to be funded by GEF. Recent analytical work includes a policy note on environmental governance, which is in the final stages of publication. In addition to this joint work, the China UNDAF 2006-10 includes 20 country specific outcomes in the area of environmental sustainability. Over the past two years, the agencies involved in this proposal have disbursed an aggregated $231m. At country level, a Programme Coordinator will be responsible for operational coordination of the programme. He/she will be accountable to a steering committee comprised of key stakeholders, and through this steering committee to the Chair of the UNTGEE and the Resident Coordinator. At output level, one agency will take lead responsibility and accountability for delivery of each output, while working with other UN agencies as partners in the output (as in Appendix A). The output lead agencies will each report to the Programme Coordinator. The lead agencies will oversee the implementation of activities under their outputs by partner agencies identified in Appendix A. Financial reporting will be carried out in line with the Fund Framework Document. The key partners of the programme will include government, private sector, civil society and UN agencies/donors. In government, key partners include: Ministry of Commerce (overall MDG Fund bids coordinator), National Development and Reform Commission (NDRC - lead policy body reporting to the State Council), State Environmental Protection Agency (SEPA), National Lead Energy Group, National Lead Group on Environmental Health, Ministries of Health, Agriculture and Water Resources, provincial/local government. Chinese and foreign Chambers of Commerce will provide private sector inputs, while China Academy of Science will provide academic inputs. Local and international civil society will be engaged in the programme and through the Theme Group. UN agencies participating will include 9 Country Team members (UNDP, UNIDO, WHO, UNEP, UNESCO, UNICEF, ILO, FAO and ESCAP (APCAEM)) and one non-resident agency (UNCTAD). Others will include the World Bank and European Commission as well as bilaterals (DFID, NORAD, CIDA, etc). Cooperation with UNV will ensure that citizens are engaged as volunteers within activities for example to raise awareness of ways citizens can take individual action on climate change through their consumption choices, etc.

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C. MDG-Related Indicators

  • Goal 0: Millennium Declaration: an enabling environment (human rights, democracy and good governance)
  • Goal 7: Ensure environmental sustainability
  • 2. Poverty gap ratio [incidence x depth of poverty]
  • 27. Energy use (kg oil equivalent) per $1 GDP (PPP)
  • 28. Carbon dioxide emissions per capita and consumption of ozone-depleting CFCs (ODP tons)
  • 29. Proportion of population using solid fuels
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D. Formulation Advance

Yes
$20,000
UNDP - United Nations Development Programme
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E. Resident Coordinator's Undertakings

  • The Concept Note has been reviewed by the national government and the UN Country Team.
  • If approved by the MDG-F Steering Committee, the UN Participating Organizations undertake to submit a draft Joint Programme Document within eight weeks of notification.
  • All UN Participating Organizations have or will sign the global Memorandum of Understanding with the Multi-Donor Trust Fund Office.