1. THE REGIONAL ENVIRONMENTAL CENTER for Central and Eastern Europe The Registries for GHG in the CEE Countries (The Czech Republic, Hungary,Latvia, Poland, Romania, Slovenia) Maria Khovanskaia Regional Environmental Center for Central and Eastern Europe 7 June 2003, SB 18, Germany

2. Main facts about the project Main objective: To identify the best option among the available types of Registries for a particular country Participants: Regional Environmental Center for Central and Eastern Europe and CEE NGOs from the Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia Duration: October 2002 – April 2003.

3. Milestones: I. Kick-off meeting Authors had to: Compare the different possible options in respect with establishment of the National Registry; Review the existing Registries in light of the future needs; Analyse the institution and legal basis for the building of the National System in the future; Make a preliminary estimation of the costs of the establishment of the National Registry; Draw up recommendations to the Ministry in charge. II. Interim Meeting. Participants reported their findings on the already existing environmental Registries: UK, Denmark, USA as well as summary of UNFCCC and EU requirements. III. Final Meeting.

4. THE REGIONAL ENVIRONMENTAL CENTER for Central and Eastern Europe Poland ( ISD – capacity-building approach) Main questions to answer: In which direction should the work to establish the Registry proceed? What may be the nature of its links with the Registries to be established under EU ET scheme and domestic emissions trade in Poland? Study divided in the following parts: An assessment of the situation with the climate protection in Poland The already existing systems Dilemmas related to the National Registries in Poland Recommendations to the Government.

5. Legal Framework Achievements: Environmental Protection Act is adopted National Environmental Policy for 2003-2006 along with an Outlook for 2007-2010 is adopted by the Council of Ministers in December 2002 (However: the Policy is not yet adopted by the Polish Government) Short-term objectives: oThe creation of organizational, institutional and financial conditions for Poland’s meeting of its commitment in the scope of reporting, monitoring and verification of the emission level achieved; oThe creation of the conditions for the participation of Polish companies in emissions trading and the implementation of this mechanisms Entire set of tasks are envisaged, several of which relate directly to the development of the National Registry

6. The system of fees and the system of recording emissions At the different level of administration a number of measures are taken to record and verify data on pollutant emissions including GHG. Measures implementing the provisions of the national legislation – system of fees for the use of the environment (several thousands of entities)  The user of environment pays for the release of pollutants (almost all GHG)  The user calculates the fees based on the quantity released and rates laid by the MOE  The user is obliged to keep the records of its data  The user submits the data at the same day as she effectuates payment to the local Marshall’s office (the basis for control system)  The user should also obey the accounting regulation is this field

7. The system of fees and the system of recording emissions Measures implementing provisions of the international obligations – system of emissions recording  National Center for Recording Emissions;  NCRE makes national emissions inventories and inventory reports which are to be submitted to the various european and international organizations;  NCRE creates, developes and updates the database necessary for performance of the above task containing: data on emission sources and their activities; emission factors; estimated emission levels.

9. The system of fees and the system of recording emissions The above systems can NOT be sufficient basis for National Registries either for conducting Emission Trade. However, they can: Determine emission level of the individual entities obliged to pay fees Collection of the emission data at the regional level The data collected under the system of fees can be useful for verification the transactions registered in the National Registry – in order to determine whether the seller meets its obligations in terms of emission levels The knowledge of the manner of the opeeration of these systems can be useful when designing the National Registry

10. Main Dilemmas 1.Level at which transactions should be concluded:  All transactions (irrespective of mechanisms) can be concluded by the State only;  Each transaction can be concluded by any interested party, with the government exercising supervision and control only over the correct course. 2, Integration of the National Registry (to which extent different registries should be integrated in one another): Three separate registries; One common Registry; Two Registries – one to cover domestic transaction and one to cover international (Kyoto and EU) ones

11. Latvia Latvian Development Agency (LDA) – the same approach 1.Legal framework is even less developed than the Polish one – no clear mandate for the development of the National Registry for GHG. 2.Assessment of IT capacities in the country – enough to create the own software for the Registry 3.Existing registries inside the country and the requirement to comply with the mega-registry (registry of registries). 4.Dilemma “consolidated vs separate”with EU or/and other Baltic States

12. Hungary Hungarian Environmental Economics Center – cost assessment approach Tasks associated with setting up and maintaining a registry system: Determining system requirements: an operative description of the functions a registry should be able to perform based on the UNFCCC decisions regarding registries (as well as domestic and EU requirements); System Development:  Functional decisions, a task for experts on the KP and other UNFCCC requirements affecting registry development;  Technical decisions on e.g hardware capabilities, database software, physical communications protocol necessary for the functioning of the system etc

13. Costs and reference cases Costs of setting up the system come from the following: Software costs (registry and system software); Hardware costs; Secure environment for the locating system; Setting-up communication protocols; System maintenance; Personnel training. Reference cases (both inventories and registries, internet-based, real-time with user access through the user name and password): EATS (Emissions and Allowance Tracking System). Developed by US EPA. Supports all the emission trading inventory and registry for SO2 and Nox; Environmental Resource Trust; UK Emission Trading Registry.

14. Software Dilemma: to develop tailored to the needs of the developer or to purchase with the further adjustment to the needs of purchaser. Costs of development: EATS – between $ 750,000 and 1 million UK ETR – GBP 800,000 over 18 months Hungary – since precise description of the registry function has not been decided yet, neither its connection to the other systems, it is difficult to make an estimation. Labor costs will be definitely less. Costs associated with purchasing a license: Any customization or modification of the software; Training of personnel; Installation, including providing the necessary hardware and secure environment; Translation; On-going technical support

15. THE REGIONAL ENVIRONMENTAL CENTER for Central and Eastern Europe Other interesting findings 1.Public vs Private Entity to operate Registries. Conclusions: both government institutions and several private companies are able to operate the Registry. 2.National or consolidated Registries – no specific conclusions.

16. Main findings of the final meeting 1. 1. The lack of Climate Change Mitigation Strategy. In some of the CEE countries (for example, Slovenia, Latvia) the Climate Change issues are not on a list of priorities. This results in the absence of Climate Change Mitigation and GHG Abatement Strategies. Poor Registry development and the lack of provisions in the national legal systems are mainly due to the lack of a clear strategy in the field of Climate Change. 2. 2. Upcoming EU Accession and joining EU Emission Trade Scheme. The main discussion went on the issue of consolidate vs. separate national registries. The participants agreed that the time schedule is very tight, and much urgent work has to be done on the hard-and software for the registry/s, including assurance of compatibility through the properly designed communication protocol, and capacity building. Some participants suggested that the transition period should be granted for the accession countries under the EU ET Directive. The participants also investigated whether EU is willing to provide the basic software for its member states since the French software company is contracted to design the Registry architecture for the EU. 3.

17. THE REGIONAL ENVIRONMENTAL CENTER for Central and Eastern Europe Main findings of the final meeting 1. 3. Cooperation with financial institutions. Several times it was pointed out that the Registry is not a simple database, but a database which should be linked to the Internet and this database is to be modified through the web-access instructions. Thus, the experience of the financial system is valuable. However, even if the GHG registry is designed completely separately, the close link to the financial system should remain since the Emission Trade includes also a money transfer. 4. Need for the institutional set-up. The participants expressed several times their concern about the lack of institutions maintaining the Registries. Another question is whether these operators should be public or private. The main conclusion was that the responsibility for the Registry should lie with a government since the government is responsible for the task of meeting Kyoto target of a country. At the same time some tasks could be out-sourced.

18. Main findings of the final meeting 1.5. Country-specific needs. The Registry can serve for other country needs, for example, for monitoring if a country is willing to combine monitoring and verification activities with the Registry. 6. National Allocation Plan. It was pointed out that the expensive process of the Registry design should not be started before the final decision on the allocation plan is made.

19. Consolidated vs National Among the advantages of the separate national registries: 1.Governments will fill more in control; 2.Capacity building for the individual countries; 3.Customizing the Registries for the country-specific needs; 4.National language makes Registries more user-friendly. Among the advantages of the consolidated registries: 1.1. Fewer costs for the individual countries; Le2. Lesser risk of confusion between different traded units, Fr3. Avoid fraud and double-selling; Le4 Lesser work on the development of the communication protocols.