UNFCCC Technical Workshop on Joint Implementation Bonn, 13 February, 2007 Session 2: Parties Involved in JI Projects – Panel Experiences and Expectations – Kristin Lang, EIB Deputy Head of Secretariat Multilateral Carbon Credit Fund A climate change initiative From EBRD and EIB

2 Multilateral Carbon Credit Fund A joint EBRD – EIB Initiative Carbon credits Country specific JI institutional framework Environment - Economic - Political - Investment Getting to the Credits

3 Circle of Good Governance: Reducing Uncertainty Multilateral Carbon Credit Fund A joint EBRD – EIB Initiative JI national priority – long term development vision – eligibility priorities Transparent procedures and responsibility for endorsement and approval Communication of procedures/criteria for submission and evaluation or projects Domestic taxation clarity Legal and institutional mechanisms National authority with JI dedicated human resources Outreach to project companies

4 JI Institutional Barriers National Climate Change Institutions –Turf wars between Ministries and agencies –Lack of dedicated resources –Uncertainty in timeframe for endorsement and approval of JI projects –Unclear eligibility and criteria and procedures for LOA and LOE Regulatory Constraints: Central & Eastern European examples: –80% cap on transfers of ERUs –Price floor of €5/ton –A-level credit rating required for at least one project participant –No projects that use funds from national budget (difficult for state-owned industries) –Financial additionality requirement: (IRR < 8%) –ERU share of investment has to exceed 10% of project cost Multilateral Carbon Credit Fund A joint EBRD – EIB Initiative

5 Common rules on baseline assessment Rules for assessment of project additionality Complicated procedures for bundling of similar small projects Procedure and responsibility for issuance and transfer of ERUs EU –Linking Directive: EU-ETS takes precedence –Double counting provisions – untested –JI reserves in the 2nd National Allocation Plans - sufficient JI reserves for new projects? Multilateral Carbon Credit Fund A joint EBRD – EIB Initiative Potential JI Barriers: External

6 Indicators for a successful JI country Streamline decision making –JI integrated into national priorities and long term national development vision –Clear legal authority and competencies for project selection and approval –Staff and technical resources with dedicated funding mechanism –Clear, transparent and actionable projected selection and approval criteria –Knowledge and experience - availability of GHG inventory guidelines –Data and methodology Attracting investments that deliver sustainable development -Robust pipeline -Make available country key indicators / standards for baselines -Let the market do the work in relation to price setting -Make it possible to appeal a decision -Avoid going beyond the legal Kyoto requirements -Capacity building and funding (e.g., organised workshops, seminars, events and relevant funding) Multilateral Carbon Credit Fund A joint EBRD – EIB Initiative

7 Contact us MCCF Secretariat Mr. Jan-Willem van de Ven Head of Secretariat EBRD Phone Ms. Kristin Lang Deputy Head of Secretariat EIB Phones MCCF Carbon Managers West Zone Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovak Republic, Slovenia. Carbon manager: Haskoning North-East Zone Russia, Ukraine, Belarus, Kazakhstan Carbon manager: Greenstream Network / Eurocan / Canadian Standards Association South-East Zone Albania, Armenia, Azerbaijan, Bosnia-Herzegovina, FYR Macedonia, Georgia, Kyrgyz Republic, Moldova, Mongolia, Montenegro, Serbia, Tajikistan Turkmenistan, Uzbekistan Carbon manager: ICF International Consulting Multilateral Carbon Credit Fund A joint EBRD – EIB Initiative