Palau’s Intended Nationally Determined Contribution

1. Introduction   The  Republic  of  Palau  is  committed  to  the  successful  conclusion  of  negotiations  under  the  Ad-­‐Hoc   Working  Group  on  the  Durban  Platform  for  Enhanced  Action  (ADP)  in  order  to  adopt,  at  COP21,  a  new   legally-­‐binding  agreement  under  the  United  Nations  Framework  Convention  on  Climate  Change   (UNFCCC)  applicable  to  all  Parties,  to  come  into  effect  in  2020.     In  accordance  with  decisions  1/CP.19  and  1/CP.20,  the  Republic  of  Palau  is  pleased  to  communicate  its   Intended  Nationally  Determined  Contribution  (INDC)  towards  achieving  the  objective  of  the  UNFCCC,  as   well  as  accompanying  information  to  facilitate  clarity,  transparency,  and  understanding  of  its  INDC.     The  Republic  of  Palau  is  also  pleased  to  provide  additional  accompanying  information  on  our  mitigation   effort  and  support  for  implementation.  

2. Intended  Nationally  Determined  Contribution  –  Mitigation  [Contribution]   Timeframe   Start  year:  2020   End  year:2025     Type  of  commitment   Absolute  energy  sector  emissions  reduction  target,  with  additional   reductions  coming  from  the  waste  and  transport  sectors.     Reference/base  year   Reference/base  year  is  2005  –  emissions  were  approximated  at  88   thousand  tCO2e     Estimated  quantified  emissions   Indicative  targets:   reductions   ₋ 22%  energy  sector  emissions  reductions  below  2005  levels  by   2025   ₋ 45%  Renewable  Energy  target  by  2025   ₋ 35%  Energy  Efficiency  target  by  2025     Coverage   Energy  (electricity  generation),  transport    and  waste  sectors       Gases:  Carbon  dioxide  (CO2  )  and  methane  (CH4)     Baseline  assumption     Business  as  Usual  (BAU)  emissions  scenario  projections  are  based  on   economic  growth  in  the  absence  of  new  climate  change  policies  and   measures  in  addition  to  those  in  place  in  2015,  and  greater  coverage   and  implementation  of  existing  measures.         BAU  projections  include  the  electricity  sector  only,  which  is  Palau’s   largest  emitting  sector.    BAU  assumptions  include  a  GDP  per  capita   growth  of  3.72%  per  year  (historical  15  year  CAGR)  and  EIA  oil  price   projections  in  reference  case  as  the  basis  for  residential,  government   and  commercial  sector  energy  use  growth  projections.  Commercial   energy  use  growth  projections  also  took  into  consideration  energy   use  by  private  generators  in  the  tourism  sector.         Emission  from  the  waste  management  and  transport  sectors  are  not   included  in  the  BAU  projection  however  emission  reduction   initiatives  will  be  addressed  on  a  project  basis.     Intention  to  use  market-­‐based   No   mechanisms  to  meet  target   Land  sector  accounting  approach   N/A     Planning  Process   Palau’s  INDC  is  grounded  in  the  Palau  Climate  Change  Policy,  which   was  informed by input from communities, civil society and other stakeholders, as  well  as  on  the  preparatory  work  for  Palau’s  second   National  Communication  which  was  also  widely  consulted.       The  Policy  establishes  Palau’s  National  Appropriate  Mitigation   Actions  (NAMA)  and  National  Adaptation  Plan  (NAP)  as  well  as  the   institutional  and  policy  frameworks  for:  (a)  climate  change   mitigation  via  management  of  greenhouse  gas  emissions  including   carbon  sinks;  and  (b)  climate  change  adaptation  and  risk  reduction   and  management.  It  establishes  the  policy  framework  that  will  guide   and  inform  action  in  accordance  with  Palau’s  National  Master   Development  Plan  –  Palau  2020.         Fair  and  Ambitious   The  Republic  of  Palau’s  total  emissions  are  de  minimis  in  the  global   context.    Given  Palau’s  remoteness,  the  small  size  of  the  economy,   low  GDP  per  capita,  dependence  on  partnership  support  and   vulnerability  to  climate  change,  Palau’s  proposed  targets  are   ambitious  and  fair  as  measured  against  other  nations.         Under  the  BAU  scenario  emissions  would  be  140  thousand  tCO2e  in   2025,  compared  to  68  thousand  tCO2e  if  both  the  renewable  energy   and  energy  efficiency  targets  are  met.           Emissions  in  2005  were  approximated  at  88  thousand  tCO2e.   Full  implementation  of  the  renewable  energy  and  energy  efficiency   strategies  outlined  below  puts  Palau  on  a  trajectory  to  reducing   emissions  by  half  as  against  BAU  in  2025,  the  equivalent  of  22%   under  2005  emissions  levels.         Business-­‐As  Usual  emissions  projection  against  INDC  full  implementation  emissions  projection  (and   Renewable  Energy  and  Energy  Efficiency  scenarios  disaggregated)      

3. Accompanying  Information  on  Palau’s  INDC       a. General  information  on  Palau   Palau is joining the community of nations, both industrialised and developing, in taking action to address the causes and impacts of climate change. Palau is particularly vulnerable to the impacts of climate   change, principally from sea level rise and the increase in extreme events (drought, flooding, Category 4 and 5 typhoons). Sea-level rise threatens vital infrastructure, settlements, and facilities that support the livelihood of island communities. Moreover, under most climate change scenarios, water resources in small islands are likely to be seriously compromised. Subsistence and commercial agriculture will be adversely affected by climate change, and ocean warming and acidification will heavily impact coral reefs, fisheries, and other marine-based resources crucial to our livelihoods, economy and culture. b. Mitigation:  Current  and  Future  Policies  and  Measures  to  achieve  INDC  targets       i. Current  Policies  and  Measures     Currently  Palau  is  working  to  increase  the  share  of  renewables  in  our  energy  mix  and  to   increase  energy  efficiency  initiatives.  To  date,  total  renewable  energy  efforts  have  only   reached  8%  of  the  needed  22%,  principally  because  two  grid-­‐connected  solar  projects  (1.5   and  3.5MW  respectively)  never  came  to  fruition.    However  to  date  Palau  has  achieved  an   approximately  30%  reduction  in  energy  use  due  to  efficiency  measures  taken.         Current  renewable  energy  and  energy  efficiency  policies  and  measures  include:    a  pilot  loan   subsidy  for  solar  roof  panels  which  will  be  increased  to  cover  more  homes  if  successful;  a   Home  Energy  Efficiency  Program  at  the  Palau  National  Development  Bank;  prepaid  metering   at  Palau  Public  Utilities  Corporation;  distribution  of  CFL  light  bulbs;  government  building   retrofits;  and,  a  pilot  Energy  Audit  program  for  large  commercial  buildings.       ii. Future  Policies  and  Measures  to  achieve  INDC  targets     To  achieve  the  renewable  energy  target  Palau  will  need  considerable  additional  installed   capacity,  including  the  5MW  of  solar  already  planned  (two  or  more  solar  projects  plus   additional  roof-­‐top  solar)  plus  an  additional  10  MW  to  power  the  water  sector.    Palau  will   also  have  to  work  to  reduce  transmission  and  distribution  losses.    (Solar  Capacity  Factor  is   assumed  to  be  15.3%.)     To  implement  the  Energy  Efficiency  target,  Palau  will:     ₋ Increase  the  Energy  Retrofit  Program;   ₋ Institute  a  Tropical  EE  Building  Code;   ₋ Adopt  the  Energy  Star  Appliance  Standard;   ₋ Implement  an  Energy  Labeling  Scheme;   ₋ Significantly  expand  our  Cool  Roof  Program;   ₋ Expand  Energy  Audit  program  to  include  all  government  and  non-­‐government   buildings;   ₋ Enhance  the  Building  Managers  Working  Group;  and   ₋ Improve  Wastewater  Infrastructure.       Many  of  these  renewable  energy  and  energy  efficiency  initiatives  will  depend  on  the   availability  of  partnership  finance  and  technology  support.     i. Additional  project  based  initiatives  in  the  transport  and  waste  sectors     Reducing  Methane  Emissions  from  the  Solid  Waste  Sector     ₋ Palau  has  developed  a  “National  Solid  Waste  Framework”  but  has  not  had  funding   to  implement  the  planned  actions.    A  key  next  step  is  to  analyze  landfill  gas   emissions  and  evaluate  the  potential  for  landfill  gas  capture  projects  at  the  national   landfill  site.     Transport  Sector     ₋ Currently  there  is  a  pending  national  legislation  that  would  mandate  the  use  and   commercial  sale  of  four  stroke  outboard  motor  engines  only  to  reduce  emissions.     ₋ Palau  is  investigating  a  project  to  convert  waste  cooking  oil  to  biofuel  for  diesel   vehicles,  beginning  with  public  school  buses  and  a  potential  public  bus  route.         c. Support  for  Implementation       Climate  change  presents  a  major  challenge  for  Palau’s  sustainable  development,  for  which   the  nation  relies  significantly  on  development  partnerships.    Similarly,  as  noted  above,   implementation  of  many  of  the  policies  and  measures  needed  to  achieve  our  emissions   reduction  target  will  depend  on  the  availability  of  partnership  finance,  technology  support   and  capacity  development.     Based  on  a  first-­‐order  estimate,  the  upfront  investment  cost  for  the  renewable  energy  and   energy  efficiency  measures  in  Palau’s  INDC  would  be  on  the  order  of  $5.5  million  USD.    This   investment  has  the  potential  to  generate  savings,  on  a  net-­‐present-­‐value  basis,  of  $2.5   million  by  2025.    This  figure  doesn’t  show  the  full  picture  of  potential  returns  on  investment   though,  as  there  was  not  sufficient  data  to  assess  the  energy  efficiency  savings  which  have   the  potential  to  be  substantial.