BAU Baseline NAMAs – Conceptual Measures

Guideline for Implementing Green House Gas Emission Reduction Action Plan 18 with which alternative outcomes, such as emission reduction difference between baseline and actual performance through mitigation actions can be evaluated. The Baseline scenario related to climate change is an estimated emission level and GHG projection in a scenario without policy intervention and mitigation technologies from the sectors identiied in an agreed period of time years 2010-2020. Generally, baseline is understood as: 1. A non-intervention scenario; 2. A scenario that considers possible evolution of activities and developments in the future. This may include: a. Macro-economic trend and demography b. Economic structural change c. Projected activities and key green house gas GHG emission sink, as well as d. Technological evolution that enables the use of eficient technologies that impact GHG emission; 3. Establishment of the baseline scenario requires a long-term simulation by the inclusion of considerations related to the uncertainties within the system evolution and related challenges; 4. Baseline is not a simple estimation from the latest trends. To establish the BAU baseline scenario, it is necessary to have an estimation on planned long-term GHG emissions with start-year start-yearof calculation and end-yearend-year. For RAN-GRK goal and national target, year 2010 is used as the start-start-year and year 2020 as endyear. However, establishing the baseline by-sector is likely to be slightly different. For example, for REDD+, a historical baseline is developed to complete BAU baseline scenario. The historical baseline used is from 2000 through 2020. This is possible as long as it uses the same year start and year end for the establishment of baseline as the basis for national calculation of NAMAs, namely year 2010 through 2020. During the establishment of the national BAU baseline scenario, it is better to consider the speciic structural nature of each sector. This is because every sector may consist of sub-sector, sub-national or multi-layer levels according to the national situation. The national BAU baseline is obtained through aggregation of each related sector by totaling annual absolute GHG values within the same period of time. The calculation will be used as a national reference for measuring whether national emission reduction targets are achieved completely. Guideline for Implementing Green House Gas Emission Reduction Action Plan 19 Moreover, the national BAU baseline is inherently multi-sectoral and needs to be stablished through an integrated national process and bottom-up approach. Figure 5 demonstrates a process for establishing national BAU and multi- sector scenario. National Business as Usual Baseline Aggregated BAU Baseline Required Integrated Processes to Establish National BAU Baselline Aggregated BAU Baseline Bottom-up Approach Energy Sector By models and sub-national levels Sub-national levels Industry Sub-sectors Cement Pulp Paper Iron Steel Textile Interconnected and isolated power systems Land Based Sector Transport Sector Other Activity Industry Sector REDD+ Power Sector Other Targeted Sector 1st Layer 2nd Layer 3rd Layer Figure 5. Baseline Establishment. Measures in national BAU baseline establishment is by determining three layers for obtaining national aggregated BAU baseline scenario: 1. Develop aggregated BAU baseline scenario of each sub sector, for example REDD+, industry. Further explanation for the development can be seen in Chapter 4. 2. Develop aggregated BAU baselines for each sector, for example the power, industry, land-based sectors. For this layer, it is better to use a bottom-up approach than a top-down one. This is because every sector can consist of several sub-sectors for example, the industry sector, or many sub-national levels for example, REDD+, or many interconnecting systems and isolated power systems such as in the power sector. Further explanation for the development can also be seen in Chapter 4. 3. Develop a BAU baseline that aggregates all targeted sectors. In the BAU baseline information development, Bappenas acts as the coordinator for developing the national BAU baseline. Every related MinistryAgency is responsible for developing the by-sector BAU baseline, Guideline for Implementing Green House Gas Emission Reduction Action Plan 20 and provincial governments in coordination with districtcity governments are responsible for the local BAU baseline development according to their respective local authority. Then a scenario must be developed for each layer by considering the following key factors: 1. Current and future policies without any intervention and climate change policy action; 2. Market trends and the like; 3. Related uncertainty; 4. Evolution from supply and demand, 5. Cost saving; and 6. Expected system performance The GHG emission target igure can then be calculated based on the, scenario and parameters that are applied as long as the period can use the Intergovernmental Panel on Climate Change IPCC methodology for GHG inventory calculation, for example, 2006 IPCC Guidelines for National GHG Inventories. The target emission reduction volume will be different, depending on which BAU baseline is used. The level of uncertainty will depend on the various sectors and factors such as trends in technologies process fuel, growing demand, etc.

3.1.2 Deining Mitigation Actions

After developing the national BAU baseline scenario, aggregated national mitigation actions for each sector can be obtained. Not only that, national and sector carbon budget can also be calculated by assuming the national GHG reduction targets are achieved. Therefore, it is immediately necessary to plan potential mitigation actions for each sector and prepare long-term CO 2 emission reduction scenarios for each of the actions. The mitigation actions registered in Perpres on RAN- GRK No. 61 Year 2011 can be reviewed to see whether such actions can reduce GHG emission, and its cost analysis and implementation plan can be carried out. This includes the annual long-term CO 2 emission reduction plan which is developed according to the set rankings see selection process below, Guideline for Implementing Green House Gas Emission Reduction Action Plan 21 by following the start-year and end-year similar to those in BAU baseline scenario development. To develop the RAD-GRK, deinition of mitigation actions can be seen more clearly in Chapter 7 and the Guideline Book for Developing RAD-GRK. In Perpes No. 61 year 2011, there is no deinition of mitigation actions for the achievement of -26 until -41 targets yet. Deinition of the actions will be further discussed in Chapter 3.

3.1.3 Proposed Implementability Level and Mitigation Action Selection Process

As one of the parties at UNFCCC, Indonesia has re-conirmed that economic and social development as well as poverty alleviation constitute key and the most important priorities from developing countries 6 because development countries still have to develop and meet economic and social growth and development. Such provision becomes an important element that needs considering in establishing national mitigation actions. Several testing criteria can be used to set rankings of potential mitigation action options proposed from each sector, namely: i cost eficiency low cost to reach signiicant emission reduction ii maintain consistency related to national development goals; iii maintain consistency related to national environmental goals; iv availability and quality of data; v political and social feasibility; vi replicability, namely adjustment capacity to geographical, socio- economic-cultural, legal and regulatory backgrounds; and vii macro-economic considerations, such as impacts on PDB GDP, number of job opportunities created and closed, implication on long-term development, sustainable economic growth and social development, poverty alleviation, and foreign currency exchange value and trading, etc. The testing criteria should be in line with the whole potential mitigation scenario framework proposed for each major and pertinent sector by using a bottom-up approach. In addition to this guideline, existing technological diversity, national policy and legal and regulatory frameworks must also be taken into consideration. 6 UNFCCC COP 16, Cancun, in Decision 1CP.16