Israel National Plan for Implementation of the Paris Agreement

1. Electricity Sector Current Status Under the BAU scenario, GHG emissions from electricity generation are expected to reach 56 million tCO2e in 2030, constituting some 53% of total emissions in the economy. This scenario assumes meeting the target established in 2009, namely generation of 10% of Israel’s electricity from renewable energy sources in 2020. Emissions Reduction Potential The total GHG emissions reduction potential in the electricity sector is 12.8 million tCO2e relative to the BAU scenario for 2030, which is 53% of the total reduction needed to comply with the target. Most of the potential in this sector results from coal use reduction and the remainder from electricity production from renewable energy sources as specified below: a. Coal use reduction through the shutdown of the four oldest and most polluting coal units in the Orot Rabin Power Plant (Hadera) would bring about a reduction potential of 3.6 million tCO2e. b. Coal use reduction in the other coal fired units of the Israel Electric Corporation (not including units 1-4 in Orot Rabin) would bring about a reduction potential of up to 6.1 million tCO2e. This measure is based on a change in the load order of power plants that would prioritize the most efficient units (combined cycle units based on natural gas) over less efficient units. Changing the load order will take place subject to the technical limitations of the production units and considerations of system survivability. As yet, consensus has not been reached on the scope of coal use reduction in these units. 14 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT ISRAEL’S GREENHOUSE GAS EMISSIONS REDUCTION (MITIGATION) PLAN c. Implementation of a comprehensive plan for compliance with the 17% target for renewable energy production in 2030 would bring about a reduction potential of 3.1 million tCO2e above anticipated electricity generation under a BAU scenario. Under the BAU scenario, full implementation of the national target set in 2009 is assumed. This target calls for 10% of the electricity generated in 2020 to be based on renewable energy. Therefore, in absolute terms, the full reduction potential of 17% (BAU + 7% to reach the target) relative to 2015 is 6.5 million tCO2e in 2030. Emissions Reduction Measures in the Electricity Sector, as per Government Decision 1403 Type of Completion Description of the Measure Responsible Party Measure Date Additional Publishing a plan for achieving the targets for Minister of Energy 31.12.16 measures electricity generation from renewable energy, which will take into consideration, inter alia:  Technical and economic benefits as well as feasibility and availability of different renewable energy technologies;  Operational considerations of the electricity sector due to the integration of renewable energy production facilities using the different technologies;  Minimization of market costs and other policy considerations. Regulation Setting arrangements for implementing the Electricity Authority 31.6.2016 plan to reach the renewable energy target, including implementation of the production target for 2020. Economic Granting tax benefits, in the form of accelerated Minister of Finance * Incentive depreciation at a 20% rate over a three-year period, to photovoltaic commercial facilities that will be integrated in the net metering arrangement of the Electricity Authority. 15 Type of Completion Description of the Measure Responsible Party Measure Date Removal of Evaluating barriers to the construction of Director General of the 30.9.2016 barriers to renewable energy facilities and submitting Ministry of Energy, in renewable recommendations for minimizing these cooperation with the energy barriers. The team will evaluate, inter alia, the Electricity Authority, following: Ministry of Finance,  Extending the duration of production Israel Lands Authority, licenses for renewable energy electricity- Ministry of the Interior, generating facilities to a period longer Ministry of Economy, than 20 years, taking into consideration the MoEP and the Chief economic life of the facilities; Government Assessor  Cancelling or reducing the requirement for furnishing shareholder’s equity for renewable energy electricity-generating facilities. Removal of Removing barriers to promoting the planning Ministry of Energy and * barriers of large-scale land uses for renewable energy. MoEP Removal of Submitting a decision proposal to the Israel Minister of Finance * barriers Lands Council for setting a uniform price for the allocation of land for the construction of renewable energy electricity-generating facilities, taking into consideration the type of project and the land designation, and according to rules that will be set by the Chief Government Assessor. Removal of Evaluating easements for dual use of land Israel Lands Authority * barriers to encourage the construction of renewable energy facilities. Economic Completing the legislative process for granting Minister of Finance * incentive income tax exemption to an individual who generates household electricity, up to an annual income of NIS 18,000 (in 2008 prices), from the production of electricity from photovoltaic or wind energy. Regulation Evaluating the integration of photovoltaic Accountant General of 1.6.2016 facilities on the roofs of buildings. the Ministry of Finance >> 16 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT ISRAEL’S GREENHOUSE GAS EMISSIONS REDUCTION (MITIGATION) PLAN >> Type of Completion Description of the Measure Responsible Party Measure Date Removal of Completing a bird sensitivity map in order to Minister of 20.9.2016 barriers increase the certainty in locating wind energy Environmental electricity-generating facilities. Protection Regulation Amending Government Decision No. 2117 of -- * 22.10.2014 so that in section E of the previous Government Decision regarding power supply to the grid from photovoltaic stations the words “30 MW” will be replaced by “up to 40 MW.” Additional Evaluating and formulating additional Ministry of Energy 30.8.2016 measures measures for a further reduction of GHG (including the emissions, including in the electricity sector, Electricity Authority), in order to meet the national targets for GHG Ministry of Finance, emissions reduction, including evaluating the Ministry of Economy, manner of coal use for electricity production and MoEP while safeguarding Israel’s energy security and evaluating the use of biomass as an alternative fuel. Regulation Amending the development plan of the Israel Minister of Energy and * Electric Corporation so as not to include the Minister of Finance construction of Power Plant D in Ashkelon, following full consultation with the Electricity Authority. * According to timetables to be set by the interministerial committee 17

2. Energy Efficiency in Commercial, Residential and Public Buildings and in Industry Current Status Under a BAU scenario, indirect (electricity consumption) and direct GHG emissions are expected to reach 48 million tCO2e as specified below: a. Indirect emissions from electricity consumption: 47 million tCO2e; b. Direct emissions from fuel combustion in buildings for heating, water heating and cooking: 1 million tCO2e. Emissions Reduction Potential The reduction potential of decreasing electricity consumption in buildings and in industry is estimated at 7.1 million tCO2e relative to the BAU scenario in 2030, which is 29% of the total reduction needed to comply with the target. Implementation of the energy efficiency measures is expected to bring about direct savings to the economy of NIS 30 billion cumulatively by 2030 (this calculation does not include cost savings associated with air pollution). Measures to Encourage Investments in the Energy Efficiency of Buildings and Industry and to Increase the Rate of New Green Building, as per Government Decision 1403 Date of program Type of initiation/ Description of the Measure Responsible Party Measure formulation of the measure Economic Government guarantees totaling NIS 500 Accountant General Operation of mechanism million over a ten-year period to leverage in the Ministry the guarantee investment loans in the fields of energy of Finance in mechanism in the efficiency and GHG emissions reduction. cooperation with second half of 2017 Recommendations on rules for the grant of the following guarantees in accordance with the targets ministries: set in the government decision, including Energy, Budget Completion of the entities eligible for guarantees, guarantee Department, formulation of rules cap, guarantee duration, and prioritization Economy and by 31.12.2016 of project types and technologies over Environmental time, including prioritization of innovative Protection Israeli technologies. >> 18 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT ISRAEL’S GREENHOUSE GAS EMISSIONS REDUCTION (MITIGATION) PLAN >> Date of program Type of initiation/ Description of the Measure Responsible Party Measure formulation of the measure Economic Grant program totaling NIS 300 million MoEP, Ministry of 1.9.2016 mechanism for the years 2016-2019 to incentivize Economy, Ministry investments in energy efficiency and of Energy and GHG emissions reduction. The program Ministry of Finance will be run by the Investment Center in the Ministry of Economy. The grants will be given on the basis of competition over the reduction cost of a ton of GHGs and kWh saved. The grant program will include, inter alia, criteria for preference to disadvantaged local authorities and small and medium-sized businesses, promotion of air pollution reduction from industry, and promotion of investments that will integrate the installation of innovative Israeli technologies. Economic Evaluating and formulating steps to reach Ministry of Energy 30.11.2016 mechanism the target of electricity consumption in cooperation reduction. The evaluation will include, with the Electricity inter alia, the following measures and Authority and mechanisms and, as necessary, legislative the Ministries amendment: of Finance and  Mechanism for the generation of units Environmental of energy saved (Negawatts) from Protection electricity providers, producers and consumers and other license holders in the electricity sector;  Use of electricity bills as a clearinghouse for repayment of loans given to electricity consumers for investments in energy efficiency, taking into consideration the financial exposure of electricity providers from implementation of this mechanism. 19 Date of program Type of initiation/ Description of the Measure Responsible Party Measure formulation of the measure Economic Evaluating an update in the tax policy on Ministry of Finance 30.9.2016 mechanism accelerated depreciation for energy-saving in cooperation products. with the Ministry of Energy Regulation, Evaluating measures for increasing the MoEP in 30.9.2016 standards and number of new buildings to be constructed cooperation with economic until 2030 according to Green Building the following measures Standard 5281 and setting targets for such ministries: an increase in the commercial and public Energy, Economy, building sector, subject to cost-benefit Construction and analysis. Housing, Finance The evaluation will include the following and Interior components, inter alia:  Green building standard requirement in new buildings;  Economic tools to incentivize new building that complies with the green building standard;  Evaluation of the technical and economic feasibility of technological measures. Regulation and Evaluating the totality of measures Minister of Energy, 30.9.2016 standards necessary to formulate regulations in consultation that would establish an energy rating with the Minister requirement for new residential and of Environmental commercial buildings on the basis of Israel Protection, Minister Standard 5282. of Construction and Housing and Minister of Finance >> 20 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT ISRAEL’S GREENHOUSE GAS EMISSIONS REDUCTION (MITIGATION) PLAN >> Date of program Type of initiation/ Description of the Measure Responsible Party Measure formulation of the measure Removal of Increasing the number of entities dealing MoEP in 30.9.2016 barriers with green building standard certification cooperation with as part of a wider process of evaluating the following measures to increase the number of new ministries: buildings to be built until 2030 according Energy, Economy, to Green Building Standard 5281. Construction and Housing, Finance and Interior Additional Appointing a ministerial energy officer All government 31.5.2016 measures to report annually, and no later than ministries and their March 1 of every year, via an online form units on the Ministry of Energy’s website, on the energy consumption of the ministry in the previous year and on the activities and measures taken to reduce it, as per the request of the Director General of the Ministry of Energy or his representative, and to take steps to reduce it further. Additional Formulating and running a training course Minister of Energy ongoing measures for government employees who will be appointed as ministerial energy officers. Additional Publishing the electricity consumption Minister of Energy ongoing measures data of all government ministries and units annually. Additional Formulating and operating mechanisms Civil Service 30.6.2016 measures to encourage energy efficiency in Commission in government ministries in order to promote cooperation with energy consumption savings. the following ministries: Energy, Finance and Environmental Protection 21

3. Transportation Current Status The transportation sector is the second in size in terms of GHG emissions in Israel. Emissions from this sector in 2030 are expected to reach 21.7 million tCO2e, some 21% of expected emissions under a BAU scenario. Emissions Reduction Potential The reduction potential in the transportation sector is estimated at 3 million tCO2e until 2030, which is 12% of the total reduction needed to comply with the target. This potential stems from two major components, each of which is expected to reduce some 1.5 million tCO2e in 2030: a. Reducing private car mileage in accordance with the target set in Government Decision 542, at a rate of 20% relative to anticipated mileage in that year under a BAU scenario and 2015 trends; b. Increasing the efficiency of fuel consumption in transportation by promoting the penetration of efficient vehicles and alternative propulsion (electricity and natural gas) vehicles. Policy Measures and Other Steps for Reducing Private Car Mileage and Promoting Fuel Consumption Efficiency in Transportation, as per Government Decision 1403 Type of Completion Description of the Measure Responsible Party Measure Date National plan Formulating and implementing a plan to Minister of 30.6.2017 promote the use of public transportation Transport and (publication and meet the targets of reducing private car Minister of Finance, of the plan) mileage. in consultation with the Minister of Environmental Protection >> 22 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT ISRAEL’S GREENHOUSE GAS EMISSIONS REDUCTION (MITIGATION) PLAN >> Type of Completion Description of the Measure Responsible Party Measure Date Economic Evaluating economic tools, including economic Minister of Transport 30.6.2017 incentive incentives and changes in tax policy, to and Minister promote GHG emissions reduction in the of Finance, in transportation sector. consultation with the Minister of Energy, Minister of Environmental Protection and the Alternative Fuels Administration in the Prime Minister’s Office Economic Evaluating economic tools, including economic Minister of Energy and 31.12.2016 incentive incentives and tax policy, to promote the Minister of Finance, infrastructure for changing the mix of fuels in in consultation the economy so as to reduce GHG emissions in with the Minister of the different sectors. Transport, Minister of Environmental Protection and the Alternative Fuels Administration in the Prime Minister’s Office 23

4. Additional Reduction Potential In addition to the measures included in Government Decision 1403, significant reduction potential exists in other sectors: energy generation and production processes in industry, refrigerant use, and the waste and wastewater treatment sector. Under the BAU scenario, GHG emissions from these sectors are expected to reach 22.5 million tCO2e in 2030. The reduction potential in these sectors is estimated at 4.5 million tCO2e, as per the following: Emissions Reduction from Energy Generation and Production Processes in Industry GHG emissions from fuel use in buildings and in industry and emissions from production processes are expected to reach 14.4 million tCO2e in 2030 under a BAU scenario. The reduction potential from these emission sources is estimated at 1.3 million tCO2e, especially through increased efficiency of water heating systems in buildings, a switch from the use of fuel oil to natural gas in industrial plants and establishment of cogeneration facilities. Waste and Wastewater Treatment Sector GHG emissions from the waste and wastewater treatment sector are expected to reach some 5 million tCO2e in 2030 under a BAU scenario and to constitute nearly 5% of total emissions. The reduction potential is estimated at 1.6 million tCO2e, which is 7% of the total reduction needed to comply with the target. This reduction largely stems from the prevention of waste landfilling for the purpose of producing refuse-derived fuel (RDF) or biogas in anaerobic digesters (for electricity production) as well as from the collection and use of landfill gases in waste disposal sites. Refrigerants (HFCs) F-gases such as HFCs are used for cooling systems and air conditioning in buildings, industry and vehicles. Emissions from F-gas use are expected to grow significantly under a BAU scenario, at a rate of 259% as of 2012, as they present an available alternative to HCFCs (refrigerants) whose use is gradually being phased out in accordance with the Montreal Protocol for the Protection of the Ozone Layer. The reduction potential of implementing new standards for limiting the import of refrigerants with high global warming potential, conducting trainings for technicians using HFC alternatives, and using economic tools to incentivize investments aimed at promoting a transition to systems based on environmentally friendly alternatives is estimated at 1.4 million tCO2e, which is 6% of the total reduction needed to comply with the target. 24 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT ISRAEL’S GREENHOUSE GAS EMISSIONS REDUCTION (MITIGATION) PLAN

5. Promotion of Israeli Technologies Israel has a unique combination of security and hi-tech industries and an entrepreneurial environment that together creates an exceptional range of opportunities. Israel has therefore attained impressive achievements in the field of cleantech, and was even rated in first place in innovation (R&D) among 40 entrepreneurial states by the Cleantech Group. At the same time, there is a significant gap between R&D achievements and the commercialization of technologies, in which Israel only ranked eighth. This gap is due to difficulties in the following two stages of the process:

1. Commercial demonstration stage: demonstration of the commercial applicability of the technology, including construction of pilot facilities;

2. Commercialization stage: full commercial implementation of the technology. In the framework of Government Decision 1403, several policy measures and additional steps were approved aimed at promoting Israeli technologies in relevant areas for the reduction of GHG emissions and the improvement of energy efficiency. 25 Measures for Promoting Israeli Technologies in Relevant Areas Type of Completion Description of the Measure Responsible Party Measure Date National Plan Establishing a steering committee to formulate Ministry of Economy 30.9.2016 recommendations for a plan to support and in cooperation with advance Israeli technologies in the fields of representatives energy efficiency, renewable energy, smart grid, of the Ministry of energy storage and GHG emissions reduction. Finance, Ministry of The plan will include the following supporting Energy (including the instruments and tools: Electricity Authority),  Financial instruments for supporting start- National Authority up technologies for technologies at their for Technological pilot demonstration stage and for the Innovation and MoEP penetration of technologies into the Israeli market and foreign markets. In addition, creation of a designated financial instrument for supporting companies at their initial commercial demonstration stage;  Tools for marketing, investment promotion, and strategic advancement of the renewable energy and energy efficiency sectors in the Israeli market and in foreign markets, including a mechanism for managing and networking the community of entrepreneurs, investors, companies and businesspeople, working to promote solutions in the fields of renewable energy and energy efficiency in Israel;  Complementary tools, including evaluation and recommendations for regulatory changes needed to remove barriers and additional tools to promote the industry, as deemed appropriate. >> 26 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT ISRAEL’S GREENHOUSE GAS EMISSIONS REDUCTION (MITIGATION) PLAN >> Type of Completion Description of the Measure Responsible Party Measure Date Economic Evaluating and formulating a method Minister of Energy, 30.6.2016 mechanism/ for supporting pilot and commercial in consultation incentive demonstration facilities for electricity with the Minister of generation and for the provision of system Economy, Minister of services using renewable energy. The Finance and Minister evaluation will include, inter alia, support of Environmental mechanisms including grants to innovative Protection Israeli technologies. Regulation Amending section C.6 of Government Minister of Energy * Decision 3484 of 17.7.2011 for the purpose of lengthening the application of a quota of 50 MW for electricity production facilities (which expired on 31.12.2015) through pilot facilities using innovative technologies, until an alternative plan in accordance with this section is implemented, and no later than 31.12.2018 * According to timetables to be determined by the interministerial committee 27 Summary of Mitigation Measures Mitigation potential in 2030 in million tons 7.1 Energy efficiency in 3.6 Target non-compliance 9.7 Target compliance electricity consumption Reduction of coal use Closure of units 1-4/ change in loading order of power plants 3.1 Electricity production from renewable energy F-gas 1.5 Reduction in *only relates to an addition above BAU which assumes compliance with refrigerant emissions the target of 10% in 2020 1.3 Reduction in fuel use and 1.5 emissions from production Reduction in private car mileage (establishment of public transport) processes 1.5 Fuel efficiency in transport 1.6 Waste treatment *relates only to addition beyond BAU 21.2-27.3 Total reduction assuming implementation of the measures 24.5 Mitigation required to reach the target: The scope of coal use reduction in power stations has not yet million tCO2e been determined. Non-fulfillment of the reduction potential from coal will require the government to invest in alternative, more expensive measures in order to comply with the national targets. 28 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT CHAPTER 3 REPORTING AND CONTROL SYSTEM Aims of the System Within the framework of the Paris Agreement, Israel is required to set up a national system for Measurement, Reporting and Verification (MRV). Within this framework, data will be collected and analyzed in order to measure the effectiveness of government policy in implementing the measures defined in the National Plan and to update it according. 1 2 To assess Israel’s progress To assess the effectiveness of toward achievement of the policy tools and mitigation approved mitigation targets. measures and to update the National Plan accordingly. Aims of the System: 3 4 To comply with reporting To publish information obligations to the UN. to the public. The MRV system will be based on three components:

1. Monitoring and follow-up: Annual follow-up will be conducted in cooperation with government ministries and professionals, and in accordance with the relevant international guidelines and standards. Upon completion of the process, it will be possible to estimate the scope of expected mitigation in 2025 and 2030 and the gap relative to the mitigation targets determined for these target years.

2. Quality assurance: Within the framework of the system, quality assurance procedures will be integrated into the working assumptions and methodology for calculating the scope of mitigation, the work procedures, the reported data and the results of the analysis and the conclusions. Quality assurance procedures will be based on international criteria and UNFCCC guidelines. Israel’s Biennial Update Report (BUR) will undergo its first review by international experts within the framework of the International Consultation and Analysis (ICA) process in the coming year. 29

3. Reporting: The results of the follow-up and control will be reported to the Israel government every year and to the Climate Change Convention Secretariat within the framework of the BUR every two years and within the framework of the National Communication Report every four years, as required of Israel as a Party to the Convention. Israel’s MRV system will prepare and publish the following reports: National Annual Biennial Update Communication Report to the Report (BUR) Reported Information Report to the UN Government to the UN every four years December 2016 December 2017 in 2017 National circumstances (economic, ü ü demographic, social and other developments) National Emissions Inventory ü ü ü National targets, programs and policy measures for their achievement (including scope of achieved mitigation, implementation ü ü ü indicators, economic effectiveness, scope of public and private investment) Analysis of barriers and recommendations for ü improving government policy Review and analysis of additional policy measures recommended for compliance with ü the national mitigation targets Description of the national MRV system ü ü Vulnerability to climate change and ü adaptation measures Additional measures: technology transfer, education and public awareness, observations ü and research, and knowledge transfer National needs in relation to capacity building, technology development and ü ü transfer, and financing Specification of the support received in ü practice 30 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT REPORTING AND CONTROL SYSTEM Work Process of the System The following chart details the main work processes of the system: Identification of measures for follow-up Formulation of follow-up methodologies Data collection Quality assurance from different sources Government actions for GHG emissions reduction Data analysis Submission of Quality assurance draft report to the steering committee for approval Submission of report to the government Updating and improving government International Submission of actions Consultation and reports to the UN Analysis (ICA) 31 The annual work process of the system will be based on the following milestones: Receipt of data from professionals Implementation: April 31 Completion of the quality assurance process for reported data Implementation: June 30 Completion of data analysis Implementation: August 31 Submission of findings and draft report to the steering and follow-up committee for comments Implementation: September 31 Submission of report to the government/UN Implementation: 15 December Administration of the System and Timetables for Reporting The system will be administered by an interministerial steering committee headed by the Director General of the MoEP as determined in Government Decision 1403. The committee will convene at least twice a year to review reports on progress and results of the follow-up process. The functions of the committee are:

1. Follow-up on the system’s operation and compliance with its goals and timetables.

2. Prioritization of the policy measures for follow-up.

3. Assessment of the need for additional policy measures or changes in existing policy measures for the purpose of meeting the targets. The reporting and control system will be completed by the end of 2016. 32 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT CHAPTER 4 INTERNATIONAL FINANCING Background The Paris Climate Change Conference stressed the importance of International Climate Financing to support the transition to a low-carbon global economy. The Conference reaffirmed the mobilization target of $100 billion per year by 2020 and called on developing countries to extend this target to 2025, at which time it will be reassessed as to its sufficiency. Mobilization and distribution of the financing will be based on several funds, mechanisms and organizations working in parallel to finance and support climate change projects throughout the world, but details still need to be worked out. At this stage, it appears that the influence of countries will largely be based on their activities within the framework of the financial mechanisms that have been or will be established. What is Climate Financing? The group of development banks only reached agreement on definitions related to climate financing in 2015. The document entitled “Common Principles for Climate Mitigation Finance Tracking” defines what is included under the term and characterizes nine different categories: production of lower-carbon energy generation, energy efficiency, renewable energies, sustainable transport, non- energy emissions reduction, low-carbon technologies, waste and wastewater, agriculture, forestry, land uses and cross-cutting issues. Calculating the Scope of Financing in Recent Years In the wake of the Paris Conference, the MoEP conducted a climate financing survey which specifies the contributions of countries to the various funds. According to an OECD report, the volume of public and private climate finance mobilized by developed countries reached $62 billion in 2014. However, there is no systematic calculation mechanism for the scope of contribution expected from the different countries. A preliminary comparison of the extent of financing by countries with similar circumstances to Israel was conducted by the MoEP, but a more in-depth calculation should be conducted to assess the scope of financing expected from Israel. 33 Funding Bodies Reaching the global goal of $100 billion will be based on different sources, including: financing by developed countries, banks, private and public funds, private investors, etc. The Paris Agreement gives special mention to the following four funds that exist under the UNFCCC: Special Climate Change Fund  Least Developed Countries Fund  Adaptation Fund  Green Climate Fund The Green Climate Fund will constitute the main channel for climate financing in the international arena. Israel’s activities vis à vis the Fund are under review in the MoEP. While earmarking contributions for specific actions is not possible within the framework of the Fund, opportunities for Israeli companies may be examined by means of the entities accredited to submit applications on behalf of the Fund and involvement in projects (in developing countries) that are implemented by the Fund. Additional possibilities for influence may be achieved through the integration of representatives within the administrative mechanisms of this and other funds. Further opportunities to promote Israeli cleantech may also exist in additional funds, European Union programs, setting up of a joint fund with another country, etc. Israel’s Preparations on Financing Issues Formulating the manner and scope of Israel’s integration in the framework of international financing efforts As part of Israel’s commitment to the Paris Agreement, it will be required to report on its projected financial support. The scope and manner of such participation should be determined, while promoting Israel’s cleantech in these efforts to the greatest extent possible. Assessing financing possibilities on renewable energies and energy efficiency by means of a joint task force with the USA Within the framework of the 31st conference of the US-Israel Joint Economic Development Group (JEDG), headed by the Ministry of Finance, it was decided to set up a joint clean energy finance task force with the US Government. This field holds opportunities for the economy through the promotion of Israeli cleantech, implementation of energy efficiency and penetration of renewable energies to the economy. 34 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT INTERNATIONAL FINANCING The task force will discuss financial incentives for three tracks:

1. Renewable energies in Israel;

2. Energy efficiency in Israel;

3. Technological innovation and promotion of Israeli cleantech. Expected Actions in the Coming Year Action Responsible Party Partners Completion Date Examining the financing MoEP Ministry of Foreign Affairs, 1.3.2017 expected of Israel within Ministry of Finance, the framework of the Paris Ministry of Economy Agreement Preparing an action plan for MoEP Ministry of Foreign Affairs, 1.6.2017 Israel’s integration in global Ministry of Finance, financing efforts Ministry of Economy, Ministry of Energy Formulating funding Ministry of National MoEP, Ministry of Foreign 12.2018 mechanisms for renewable Infrastructures, Affairs, Ministry of energy and energy efficiency Energy and Water / Economy projects in Israel Electricity Authority International review of models Ministry of National MoEP, Ministry of Foreign Activity expected to promote three tracks for the Infrastructures, Affairs, Ministry of to begin on task force, including interviews Energy and Water/ Economy 1.10.16 and to with experts in financial Electricity Authority continue for two innovation years Holding the first meeting of the Ministry of National MoEP, Ministry of 1.11.2016 task force Infrastructures, Foreign Affairs, Ministry Energy and Water/ of Economy, Ministry Electricity Authority of Finance, Electricity Authority 35 ACCOMPANYING THE CHAPTER 5 INTERNATIONAL NEGOTIATIONS AND KNOWLEDGE BUILDING Involvement in International Mechanisms The Paris Agreement constitutes the framework for universal action to address climate change. The details of the Agreement will continue to be worked out in meetings of the Parties. It is especially important for Israeli representatives to participate in these meetings, in whose frameworks operative procedures and rules will be determined on numerous subjects, such as guidelines on country reporting, establishment and operation of the new technology framework, establishment of new market mechanisms for emissions trading, mechanisms for providing financing and technology transfer to developing countries, etc. Upon entry into force and beyond, much of this activity will be undertaken by the Ad Hoc Working Group on the Paris Agreement (APA) and subsequently activities will be continued by the new body that was established to implement the Agreement, the CMA, and by the Convention’s existing subsidiary bodies, the SBI and the SBSTA. The following subjects were identified as central for Israel’s activities in coming years. They reflect Israel’s main areas of commitment within the framework of the Agreement, or those subjects in which Israel’s involvement is deemed to hold a relative advantage. Main Subjects for Israeli Activity:

1. Nationally Determined Contributions (NDCs): GHG emissions reduction targets for 2030 have already been submitted by most of the Parties to the Convention, and must be updated every five years. Discussions will revolve around setting guidelines for future absolute or relative targets, such as: assumptions and methodologies, quantifiable information such as base year used for calculating reduction, timeframes, etc.

2. Transparency Framework: This framework encompasses both transparency of action by means of MRV systems as well as transparency of support to developing countries in finance, technology development and transfer, and capacity building.

3. Finance: A global goal of mobilizing $100 billion per year for support of developing countries was reinforced in Paris. Discussions by the Parties to the Convention will focus on concrete mobilization and manner of reporting. 36 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT

4. Technology Development and Transfer and New Technology Mechanism: One of the main sources of support to developing countries is the transfer of technologies which constitutes a significant part of the climate financing that will be mobilized from developed countries within the framework of the Paris Agreement. Israel’s integration in this area should be examined in order to leverage Israeli cleantech, while providing technical assistance.

5. National Adaptation Plan (NAP), Adaptation Communications: The Paris Agreement set a global goal for adaptation to climate change requiring all countries to prepare national adaptation plans and to report to the Convention on the formulation and implementation of the plans, including the scope of support to developing countries on this issue.

6. Market Mechanisms: The Paris Agreement calls for the establishment of mechanisms for emissions trading and carbon markets to assist Parties to achieve their national targets on a voluntary basis. In the coming years, the Convention bodies will hold discussions on the details of the mechanisms.

7. Entry into Force: The Agreement entered into force following ratification by 55 countries responsible for 55% of the total global emissions. Issues relating to entry into force include the time of convening the first meeting of the Parties, the position of those countries which have not yet ratified the Agreement, the implications of an earlier entry of the Agreement into force and timetables for different actions.

8. Mechanism for Promoting Implementation and Compliance: The functions and powers of the compliance mechanism have not yet been specified but it will be a facilitative rather than a punitive mechanism.

9. International Consultative Assessment and Multilateral Process: The information reported by the countries to the Secretariat will be reviewed by technical experts and presented by the Parties at meetings of the Convention for the purpose of clarification and transparency. In the coming year, Israel’s first assessment process in this framework will take place. 37 ACCOMPANYING THE INTERNATIONAL NEGOTIATIONS AND KNOWLEDGE BUILDING Additional Subjects:

1. Global Stocktake from 2023 and Facilitative Dialogue in 2018: A global stocktake of aggregate actions taken to reach the global target and NDCs will be carried out. The results should influence the preparation of countries’ future NDCs.

2. Response Measures: GHG reduction measures in one country may have an effect on the economies of other countries, such as fossil fuel exporters. Consideration will be given to the concerns of countries that will be most affected by the impacts of the response measures to reduce negative impacts on their economies from the transition of other countries to low-carbon economies.

3. The Warsaw Mechanism on Loss and Damage: This mechanism aims to promote implementation of approaches to address the adverse impacts of climate change which adaptation cannot address, including insurance issues (but not including compensation).

4. Non-Party Stakeholders: The Paris Agreement calls for climate action by local government, the business sector and other bodies. 38 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT Israel’s Preparations for Accompanying the International Process Due to the wide gamut of subjects that will be discussed within the framework of the Convention’s meetings and the expertise necessary to accompany these subjects, the committed involvement of the government, business and civil society sectors is important. Experts and organizations that will contribute to Israel’s activity and opportunities to promote Israeli policy will be identified in order to create a wide knowledge base and active participation in these areas. In each subject identified as central to Israel’s international activity within the framework of the Climate Change Convention, an integrated team (governmental and non-governmental) will coordinate the activities, including:  Review of the existing knowledge and relevant professional material, including scientific material, while at the same time consulting with international and Israeli bodies from all sectors (government, private, etc.).  Identification of governmental and non-governmental bodies with expertise in the area.  Formulation of recommendations on Israel’s position in UNFCCC discussions, based on the relevant professional material and the positions of governmental and non-governmental bodies.  Formulation of proposals for submissions that are periodically requested by the UNFCCC Secretariat.  Identification of opportunities to deepen Israel’s involvement in the bodies of the Convention, including joining new initiatives, appointment of Israeli representatives to committees, and identification of relevant representatives.  Representation of Israel in meetings of the Convention when necessary.  Holding of consultations with supporting bodies such as the Climate Change Expert Group (OECD), IEA, CTCN, CCAC, World Resources Institute (WRI), Center for Climate and Energy Solutions (C2ES), Clean Energy Group, New Climate Economy, etc.  Formulation of recommendations on training, publications and other means of transferring professional knowledge to target audiences in Israel. 39 CHAPTER 6 TRAINING PROGRAM Knowledge and Skill Building In order to meet government targets and implement the National Plan for GHG Emissions Reduction, government ministries, local authorities, the business sector, the civil sector and other bodies will have to acquire new knowledge and expertise on some of the subjects. In certain cases, knowledge may be gained from other developed countries. In some cases, it will be necessary to adapt measures to Israel’s unique circumstances. Following is a preliminary list of the areas identified by the MoEP as requiring the preparation of a training program in coming years:  Development of financial mechanisms to incentivize investments in energy efficiency: Government Decision 1403 calls for the establishment of a financial mechanism (grants and guarantees) to promote investments in energy efficiency. The broadening of these financial mechanisms and the use of additional measures, such as the negawatt mechanism, should be examined. In parallel, involvement in existing international financial mechanisms or platforms that are expected to be established as a result of the Paris Agreement should be examined in order to help promote the export of Israeli technologies.  Building capacity for follow-up and control of the implementation of the reduction targets: Under the reporting obligations to the Convention on the implementation of measures to reach national targets, Israel is required to develop follow-up, modeling and scenario-building capability. The knowledge and expertise on use of the models that served the interministerial committee for preparing the scenarios (LEAP model) should be broadened.  Integration of renewable energy in the grid: The percentage of renewable energy in Israel is about 3%, while the 2030 target is 17%. Reaching the target requires structural changes in the energy sector including the development of financial and regulatory models. Lessons may be learned from world experience, such as the California experience, where policy on the large-scale integration of renewable energies in the grid is already implemented with a focus on the following subjects: management of the grid in such a way as to allow the integration of renewable energies and the integration of energy storage and pumped energy technologies. 40 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT  Increasing energy efficiency in cooling systems: Israel currently has no regulation on the use of fluorinated refrigerants (F-gas). As part of the international effort to reduce GHG emissions from this source, and in light of the results of the work of the interministerial committee which forecasted a sharp rise in the emission of these gases in Israel in 2030, an in- depth review of the subject is required. Cooperation with the EU, where a wide regulatory base exists on this subject, may be promoted. Coordination of the Training Program The training program and its subject matter will be coordinated by the MoEP and updated annually according to the needs and recommendations of committee members and relevant stakeholders. The program will be financed by the relevant government ministries as well as by budgetary allocations of international climate change support bodies. Training program for 2016-2017: Following is the preliminary program on planned activities on information building and training for 2016-2017 in the core subjects specified above: Subject Training Activity Planned Date Comments Development Workshop on promotion of Two meetings The workshops will be run by of financial export of Israeli technologies to by the end of a mitigation and financing mechanisms developing countries 2016 expert who is a consultant to to incentivize the ClimaSouth program of investments in the European Union. energy efficiency Participants: representatives of Israeli cleantech companies, financial institutions, representatives of government, industry and civil society 41 TRAINING PROGRAM Subject Training Activity Planned Date Comments Carbon market Round table on the new September 26, The round table was emissions trading mechanisms 2016 facilitated by three experts under the Paris Agreement and from Germany hosted by the their implications for Israel Konrad Adenauer Stiftung in Jerusalem.Target audience: financial advisors, industry, academia, government ministries, representatives of civil society Building capacity Two-day workshop on the LEAP December Target audience: professionals on follow-up and model, including technical 2016 that will be involved in control of the assistance constructing the emissions implementation reduction scenarios of the reduction targets Increasing energy Workshop on alternatives to Took place in Target audience: regulators efficiency in HFC refrigerants that save June 2016 on the subject (MoEP, Energy cooling systems resources and reduce emissions; and Economy) and other information on European stakeholders within the regulation framework of a project with the Bavarian Environment Agency Technical instruction course October 2016 Target audience: two (theoretical and practical) in representatives who deal with Germany on the use of natural the subject were selected refrigerants Understanding of the European Beginning Workshop will be run by regulations on F gases 2017 regulators from three countries in the European Union. Target audience: relevant government ministries, Air Conditioning and Heating Contractors Association, the Standards Institution of Israel 42 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT Subject Training Activity Planned Date Comments Integration of Workshop, in Israel and abroad, 2017 Target audience: relevant renewable energy with the participation of experts government ministries, in the grid from countries with a large green energy companies and percentage of renewable energy organizations, representatives integration in the grid (California, of civil society, etc. Germany, or others) 43 LAPAM ecologicaL paper For further information: www.environment.gov.il/english 44 ISRAEL NATIONAL PLAN FOR IMPLEMENTATION OF THE PARIS AGREEMENT