The role and responsibility of the

Coordinating and Managing Entity (CME)

Presented by Patrick Horka,
Head of PoAs, South Pole Carbon
p.horka@southpolecarbon.com

21 March 2012
2
Content
PPs/CMEs expectations in PoAs
CMEs roles and responsibilities
Possible CME operational models
Practical solutions to cover carbon aspects
South Poles contribution to a successful PoA
3
Thanks to PoA the minimum CDM size limit can be
lowered
4
Goal of PoAs Making carbon revenues bankable
Reduced non-registration risk of CPAs
Inclusion of new CPA within 2-5 months (if well designed PoA), possible before
financial closure
If sound monitoring and effective verfication is ensured, very low non-delivery risk
of CERs. Risks similar to obtaining power revenues
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Carbon revenues become bankable!
5
What can be expected from PoAs?
Geographical and sectoral redistribution (towards LDCs and EE (low density))
Economy of scale/Lowered transaction costs
Lowered registration and issuance risks
Scalable carbon finance mechanism
Lower time to market

These evolutions shall result in :
Translating carbon revenues into carbon finance
Linking policies and ER
6
Content
PPs/CMEs expectations in PoAs
CMEs roles and responsibilities
Possible CME operational models
Practical solutions to cover carbon aspects
South Poles contribution to a successful PoA
Typical PoA structure
UNFCCC
DOE
DNA
PoA Coordinating Entity
CPA developers
Contracts
Administration
PoA design
Promotion
Financial management
Monitoring
CER buyer
Finacial institutions Technology provider
8
CMEs layers of roles and responsibilities
1. Carbon aspects
2. Finance
3. Technology
4. Project
management/product
commercialization
Excellent coverage of all Carbon aspects required for all
type of PoAs and, basis for an overall success!
9
1. Carbon aspects
Carbon specific due diligence of potential CPAs
Liaise with DOEs and include CPAs
Introduce an efficient and reliable monitoring system
Monitoring data management
PoA verification
Commercialize CERs
Ability to manage all CER flows:
Cede carbon rights
Introduction of solid incentive schemes
Track generation of emission reduction
Manage ERPAs
1. Carbon aspects
2. Finance
3. Technology
4. Project
management/product
commercialization
10
2/3/4. Finance/Technology/Project mgt./Product
commercialization
Finance:
Provide carbon prepayments
Support equity investment
Technology:
Knowledge of sector and user habits
Technology with USP over PoA crediting period
Project mgt./Product commercialization:
Logistics
Distribution network down to the end-user
Marketing
Manage financial flows back to the CME
1. Carbon aspects
2. Finance
3. Technology
4. Project
management/
product
commercialization
11
Content
PPs/CMEs expectations in PoAs
CMEs roles and responsibilities
Possible CME operational models
Practical solutions to cover carbon aspects
South Poles contribution to a successful PoA
12
Possible operational models for implementing a PoA
13
Some Coordinating Entity model : the government
based PoA
Government owned and operated PoA :
Set-up and manage PoA
PoA supports its policies

Advantage/Disadvantage :
PoA gets a monopolistic position
PoA cannot be transboundary

Challenge :
Government needs to be familiar and
efficient with UNFCCC procedures

14
Some Coordinating Entity model : the government
concession
Government concession:
PoA supports its policies
Operation of the PoA is sub-contracted

Advantage/Disadvantage :
PoA gets a monopolistic position
PoA cannot be transboundary
Operator can be a carbon professional
15
Some Coordinating Entity model : the private PoA
Private PoA:
PoA supports a measure or a technology
Coordinating entity provides at minimum
CDM and monitoring services
Coordinating entity can provide
eventually technical and investment
solutions.

Advantage/Disadvantage :
PoA does not get a monopolistic position
PoA can be transboundary
Act as an open PoA
16
Content
PPs/CMEs expectations in PoAs
CMEs roles and responsibilities
Possible CME operational models
Practical solutions to cover carbon aspects
South Poles contribution to a successful PoA
17
Practical solutions to cover all carbon aspects!
1. A project management tool (PMT):
Track CPAs and keep PoA overview
Define responsibilities
Allow communication flow between team members
Overview CPA milestone targets
QC/QA system
Manage CERs, allocate to buyers, transfer to CPA implementer
Portfolio management
2. Automated Monitoring and Verification Systems (MOVERs)
Automatic collection and tamper proof transmission of data.
Interface for DOEs, credit buyers and POs to access the data in real
time to conduct consistency checks
Data aggregation and archival across a potentially large number of
CPAs
18
South Poles PMT: PoA overview
High level PoA management for CME management!
19
South Poles PMT: PoA vintages overview
20
South Poles PMT: CPA milestones overview
21
South Poles PMT: CPA QC/QA
22
Sout Poles PMT: Monitoring mgt. example
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23
South Poles MOVERs: Example China micro hydro
MOVERs developed in China:
GSM based technology using common industrial standard (RS485)
Hardware set-up is very simple cheap (ca. 100 EUR per meter)
24
South Poles MOVERs: Example China micro hydro
(continued)
Electricity meter at Suzhou also configured to send data to PMT
25
South Poles MOVERs: PMT interface
MOVERs PMT interface developed for first pilot project (CYY)
26
South Poles MOVERs: Application opportunities
Fixed installed meters (e.g micro hydro):
Direct transfer of data via GSM
Real time data control
Direct actions on CPAs with data out of bound
No meters, manual data collection (e.g. water purification):
Technical local staff to collect data on hard copy (e.g. water
device user information)
Local responsible for data mgt. to archive hard copy and
electronically submit data on regular basis
Almost real time data control
Centralized data verification and intervention option
Tracking of distribution and/or monitoring progress
To do: Direct data feeding via text messaging and
transmission via mobile phones
27
Take away message
Each CMEs faces their very specific challenges BUT all
CMEs need a deep carbon management expertise,
internally or via a partner, to achieve the continuous
issuance of CERs!
1. Carbon
aspects
2. Finance
3. Technology
4. Project
management/product
commercialization
28
Content
PPs/CMEs expectations in PoAs
CMEs roles and responsibilities
Possible CME operational models
Practical solutions for to cover carbon aspects
South Poles contribution to a successful PoA
29
South Pole provides the whole range
of carbon asset management solutions
29
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South Pole is proactively shaping the PoA market and
conciously takes the risk of an early mover
Two PoAs under implementation as a Public Private
Partnership (together with GTZ)
PPPs
Own
development
Own development of 8 private sector PoAs, 1 registered,
7 in final validation stage
First successfully validate VCU grouped project
South Pole is developing first fully integrated, web based
management system to manage PoAs
More than 20 finalized and ongoing consulting
mandates in the space of PoAs
First mandate to take over carbon mgt. tasks on behalf
of al CME
Consulting
World wide presence, allowing best support for own
but also external PoAs
Johannesburg
Zurich
Jakarta
Bangkok
Taipei
Beijing
Mexico City
2006: Incorporation in
Zurich / Switzerland
2011: ten offices
worldwide
2011: Best Project
Developer*
Swiss Social
Entrepreneur of the
Year 2011**
Over 80 carbon pros
from 22 countries
Projects in over twenty
countries
Specialized in high-
quality Gold Standard
California
Local presence
as of January 2012
Hanoi
New Delhi
Medellin
Satellite office
Head office

* Environmental Finance: Voluntary Carbon Market Survey 2011; ** Schwab Foundation/WEF
Kampala