Session 1 Guidelines for projects under Article 6 of the Kyoto Protocol First UNFCCC workshop on implementation of Article 6 projects under the Kyoto Protocol Moscow 26-27 May 2004 www.unfccc.int UNFCCC secretariat

Overview What is JI? Why two tracks for JI? What characterizes track 1 and track 2? Public call to enhance timeliness and cost-effectiveness Based on similarity of CDM-R to national registries and other applications System requirements: First design stage Guide development work/options Benchmark to test subsequent development DES is the technical basis for transactions: issuance, transfers, cancellation

Convention (Art. 3.3, 4.2 (cooperate, jointly)) Cooperative mechanisms Convention (Art. 3.3, 4.2 (cooperate, jointly)) AIJ under the pilot phase Kyoto Protocol Art. 6, 12 and 17 3 Mechanisms CDM JI ET project based System with GHG emission limitations

What is JI? Emission reductions (ERU) are achieved by one Annex Party through projects in another such Party. These project based investments shall provide emission reductions, or an enhancement of removals by sinks, that are additional to any that would otherwise occur. Projects starting as of year 2000 are eligible as Article 6 projects if they meet requirements of guidelines. ERUs shall only be issued for crediting period after the beginning of year 2008. ERUs bankable to a max of 2.5% of assigned amount pursuant to art. 3.7 & 3.8 of that Party (art.7.4); Art. 6 LULUCF projects = Art. 3.3 and 3.4; Legal entities to be authorized by Parties

Why two tracks for JI? Two “worlds” : Party meets AIP participation requirements for emissions trading (Art. 17) -> use of national JI requirements (Track 1: “ET like”) Party does not meet such requirements -> obligation to use “verification procedure” with international oversight (Track 2: “CDM like”) A Party eligible to follow Track 1 may elect to use the verification procedure under of Track 2. More detail on eligibility criteria in next session 4

What characterizes track 1 and track 2? Project design (baseline/ monitoring plan) National guidelines Supervisory Committee(take into account work by CDM/EB) Check project design against requirements National guidelines (option to use Track 2) Verification by AIE Check performance of project National guidelines (option to use track 2) Verification by accredited AIE Transfer OK if Party meets requirements In addition if track 2 option used: ERUs exempted from CPR limitations Only if the Party is in compliance with eligibility requirements (para 21, a, b & d) These ERUs are exempt from CPR limitations

Track 1 Key role for host Party Have designated focal point for approving projects Have determined national guidelines for: Approving projects Monitoring Verification Shall make directly or through secretariat information on projects publicly available Meet participation requirements No international guidelines regarding approving projects, baseline defintion, monitoring, verification etc.

Track 2 Key role for international oversight By A6SC: Accredit independent enties (AIE) Determine: Baseline and monitoring methodologies Verification Request review of decision of AIE By AIE: Determination Art. 6 projects Determination of emission reductions

Track 2 – Determination requirements AIE to check whether project design: Has been approved by Parties involved; Emission additionality: would not have occurred in the absence of the project; Baseline and monitoring plan in accordance with Art. 6 guidelines (Appendix B); Analysis of environmental impacts.

Art. 6 project activity cycle PP Ex0 A6SC&COP/MOP AIE Accreditation/ Designation Design AIE Determination A6SC* PP Monitoring PP=project participants; AIE= accredited independent entity A6SC= article 6 supervisory committee ERU= emission reduction unit 0 Any private or public body that has been accredited by A6SC and designated by COP/MOP * An automatic step unless a review is requested within 60 days by one Party involved or three A6SC members ** An automatic step unless a review is requested within 15 days by one Party involved or three A6SC members AIE Determination A6SC** ERU

Track 2- How does accreditation work? Ex Accreditation List of accredited independent entities (AIE) A6SC AIEx VERIFICATION PDD VERIFICATION ERUs

Track 2 - Verification procedure Criteria for baselines, monitoring and crediting lifetime (Appendix B) Submits project design doc. PP Automatic within 45 days Determination made public through UNFCCC secr. Project implementation AIEx Rejects if not conform with criteria PP Unless review by A6SC is requested by a Party involved or 3 of A6SC members PDD made public - comments within 30 days by Parties, stakeholders or UNFCCC accredited NGOs Data URF AIEx Determination on verified ERUs made public through UNFCCC secr. Unless review by A6SC is requested by a Party involved or 3 of A6SC members AIEx= Accredited independent entity Automatic within 15 days A6SC= Article 6 Supervisory Committee

Concluding remarks Framework Work to define the detail of national guidelines Work to define the detail of track 2 guidelines of procedures. Experience of CDM -> also specific work Meth LULUCF other than afforestation and reforestion Accreditation Issuance and transfer of ERU Development of URF