Introduction
Joint
implementation is very similar to the Clean Development Mechanism,
and has in fact adopted largely the same methodologies, project
cycle, and overall structures. The key difference is that Joint Implementation is designed to assist industrialized
Annex I countries in meeting their targets through investment and
development of projects in other Annex I countries. As the host
country also has a target under the Kyoto Protocol (unlike CDM host
countries), a Joint Implementation project must
reduce emissions against a 'business as usual' baselines, in order
to free up Emission Reduction Units (ERUs) to sell.
Emissions from the
host country are limited under the KP; JI projects
reduce emissions in the host country and free up
part of their total amount (Assigned Amount) which can then be
transferred to the investor country in the form of ERUs. These are
then subtracted from the host country's allowed emissions, and added
to the total allowable emissions of the investor country. JI
projects may start from 2000 onwards, however, ERUs can
only be used for compliance from 2008, even in the EU ETS.
Back to Top ▲
Key
Parties of the Joint Implementation
The JISC has
tasks and functions similar to the CDM Executive Board — it has a
mandate to verify ERUs generated by JI projects,
and is comprised of ten members with ten alternates. The ten members
of the JISC are comprised of: three members from Annex I countries
classed as EITs (these are Economies in Transition such as the
Russian Federation, the Baltic States, and certain Central and
Eastern European States), three members from other Annex I
countries, three members from non-Annex I countries, and one member
to represent Small Island Developing States.
To
participate in Joint Implementation as a host or
investor, parties must originate from an Annex I country with
emissions caps as listed in Annex B to the Kyoto
Protocol. This ensures that emissions reduction units
(ERUs) generated may be accounted for by transferring units between
national registries.
There are
two ways ERUs may be generated –
Track 1 and
Track 2. This is subject to the fulfillment of certain
requirements by host country. ERUs may be generated via the Track 1
simplified procedure, where the host country may verify the ERUs and
issue ERUs appropriately. Track 1 requires host countries to have
clear processes in place for approving JI projects,
monitoring project performance and verifying ERUs generated,
compared to the baseline. Host countries must also have a national
system to track their greenhouse gas inventory and Assigned Amount
Units (AAUs). If a host country is party to the Kyoto
Protocol and only fulfils the requirements of having a
national registry and an Assigned Amount, ERUs may only be verified
using the procedure set out by the JISC procedure, known as Track 2. In all
cases, a participant country is required to appoint a Designated
Focal Point, as well as to submit national guidelines and procedures
for approving JI projects.
Back to Top ▲
Each
participant country is required to appoint a Designated Focal Point,
responsible for managing local JI activities. This
is the equivalent of the CDM DNA, and is in fact often the same
body. At this time, there is no separate list of DFPs, instead, the
DNA is the default point of contact for national activities on
JI.
AIEs
are independent third-party companies, responsible for validating
project documentation and verifying project performance. They are
the equivalent of the Designated Operating Entities (DOEs) under the
CDM, and in fact DOEs may apply for accreditation to become AIEs, as
they perform very similar functions. DOEs which apply for such
accreditation may provisionally act as AIEs (within their specialist
sectoral scope) until a final decision is taken by the JISC
Accreditation Panel, however, all activities undertaken with such
provisional status will only become valid once full accreditation is
achieved.
Back to Top ▲
Market
Overview
The OECD has
published a market overview of the emerging
JI market. Key host countries are currently the Czech Republic,
Bulgaria, the Russian Federation and the Ukraine, with a substantial
proportion of projects at advanced
ERPA stages.
