1. Issues in linking registries and the transaction log
Pre-sessional consultations on registries
Bonn, 2-3 June 2002
Andrew Howard
UNFCCC secretariat
Technical presentation of text
Relatively new text in its current form
Elements brought together from other texts in the CNT

2. Scope of presentation Policy frameworks - Use of the Kyoto mechanisms
- Domestic and regional emission trading schemes
Relationship between domestic, regional and Article 17 trading
Considerations in linking trading schemes
Scope is the parts of the Article 7.4 text
conceptual elaboration of AA modalities – from Art7
registries are their operationalisation – from mechs
C&A is database and reports for summarising emission and AA data – for the compliance assessment – from Art8
Doc references
Presentation represents current texts (no dec 5/CP.6)
These could change in future, but this is current stance

3. Registries to meet policy needs
Use of Kyoto mechanisms
Implications for registries
Add domestic / regional policy frameworks (scope for individual policy features)
Use by Party and entities Also domestic/regional trading 4
Add entity holding accounts; entity use of international transactions
Use by Party Entities for CDM and JI 3
Add international transfers and acquisitions; commitment period reserve limits
Use by Party No entities participation 2
One holding account (Party) for issuance; cancellation / retirement functions; sink limits
No use of the mechanisms 1
Would Parties wish to link DET or RET schemes to others?

4. Necessary registry links
By Party and entities Also domestic/regional ET 4
By Party Entities for CDM and JI 3
By Party No entities participation 2
No use of the mechanisms 1
Use of Kyoto mechanisms
Registry links to the outside world
For RET, allow entity use of R-R links For inter-DET trading, allow such links also
Add links downward to entities Allow entities to use the registry-registry links
Add links to other registries
No links to other registries Link to transaction log (issuance / retirement)

5. Options for DET/RET and the transaction log
DET schemes: 1. Isolated DET (with no inter-DET trading)
2. Linked DET (with inter-DET trading)
RET schemes: 3. RET only
4. RET with further DET schemes but only in non-RET sectors
An RET scheme may be further linked with other RET or DET schemes
Unit options: Use AAUs, RMUs, ERUs and CERs (Kyoto units)
Use other units specific to the DET or RET
DET/RET units: Need conversion to Kyoto units for international trade
Or international trades need backing with Kyoto unit trades
Either way: International trades need monitoring by the transaction log

6. DET, RET and Article 17 emissions trading
Kyoto Protocol Article 17 trading
RET
DET
Registry A
Registry B
Registry C
Registry D
Registry E
Registry F
Article 17 trade
Inter-DET trade
RET trade
RET trade or an inter-DET trade

7. Considerations in emissions trading links
Ability to use lowest cost abatement opportunities internationally  to reduce costs of mitigating climate change
Protecting the stringency of entity obligations under DET or RET  entity obligations may be influenced by linking to other Parties’ schemes
Respecting necessary limits set by the Marrakesh Accords  commitment period reserve, LULUCF limits and supplementarity
Environmental integrity  to ensure targets (environmental goals) are met and to increase credibility
Transaction costs  to enhance efficiency and not lose benefits of trading to other schemes
Equity considerations  can influence chances of implementing DET or RET schemes

8. Legal considerations in emissions trading links
Current or new legislation will be needed for the establishment of registries
Legal considerations in linking registries
How are units legally defined?
Are units from other Parties recognized?
What restrictions apply under relevant domestic law?
What constitutes legal ownership of the units?
What constitutes a change in legal ownership? Is it irrevocable?
At what point does a transferred unit change legal jurisdiction?
What is the legal status of the transaction log?
What dispute resolution procedures should apply?

9. Issues in linking registries and the transaction log
Andrew Howard
UNFCCC secretariat