1. Kyoto Protocol to the United Nations Framework Convention on Climate Change
UNFCCC-Kyoto Protocol
Joint Implementation (JI)
Clean Development Mechanism (CDM)
The CP linkage
Questions to consider
Country case studies (Costa Rica)

2. UNFCCC (1992)
A global legal instrument on the control and management of greenhouse gases (GHGs) not controlled by the Montreal Protocol
Adopted in 1992; entered into force in 1994
Aim: stabilization of GHG emissions at a level that would prevent dangerous anthropogenic interference with the climate system
Principle of “common but differentiated responsibilities”
Affiliated instrument: Kyoto Protocol (1997)

3. Kyoto Protocol (1997) Adopted in 1997; not yet in force
121 ratifications; 44.2% of emissions (as at 17 Mar 2004)
Target: An overall reduction of GHG emissions by at least 5% below 1990 levels
Creates a more detailed and complex regulatory structure for GHG emissions
Gives developed country parties “assigned amounts” of GHGs that they may not exceed in a specified period,
3 flexible mechanisms to facilitate cost-efficient implementation process

4. Kyoto Protocol (cont’d)
Greenhouse gases (GHGs): KP Annex A
Carbon dioxide (CO2)
Methane (CH4)
Nitrous Oxide (N2O)
Hydrofluorocarbons (HFCs)
Perfluorocarbons (PFCs)
Sulphur hexafluoride (SF6)
Importance of each gas is based on Global Warming Potential (GWP)

5. Global Warming Potential (GWP)
Ratio of global warming, from one unit mass of a GHG to that of one unit mass of CO2 over a period of time
Carbon dioxide (CO2) 1 [baseline]
Methane (CH4) 21
Nitrous oxide (N2O) 310
HFC ,700
HFC ,800
HFC-134a 1,300
HFC-143a 3,800
HFC-152a
HFC-227ea 2,900
HFC-236fa 6,300
HFC-4310mee 1,300
CF4 6,500
C2F6 9,200
C4F ,000
C6F ,400
SF ,900

6. Kyoto Protocol: Sectors/source Categories
Energy
fuel combustion, fugitive emissions from fuels
Industrial processes
mineral products, chemical industry, metal production, other production etc.
Solvent and other product use
Agriculture
Waste
solid waste disposal on land, wastewater handling, waste incineration etc.

7. Land-use, Land-use Change and Forestry Sector (LULUCF)
Effective via:
increasing removal of GHGs through sinks (e.g. planting trees)
reducing emissions from sector (e.g. curbing deforestation)
Removals from sinks generate removal units (RMUs) and must be validated and offset by greater emission cuts/removals else where
More work being done in this area on methodologies including examples of good practice guidance

8. UNFCCC-Kyoto Protocol: Implementation Actors
Conference of the Parties (COP)
Secretariat
Subsidiary Body for Scientific and Technological Advice (SBSTA)
Subsidiary Body for Implementation (SBI)
Joint Working Group on Compliance (JWG)
National UNFCCC focal points
National CDM authorities (DNA)
Others (IPCC, GEF etc.)

9. UNFCCC-Kyoto Protocol: Financial Provisions
Special Climate Change Fund (UNFCCC)
fund projects relating to capacity building, technology transfer, climate change mitigation activities, economic diversification
Least developed countries Fund (UNFCCC)
fund special work programmes for LDCs
Adaptation Fund (KP)
Global Environment Facility (GEF)
operating entity of the financial mechanism; main funding channel for developing countries
Private investments
Community Development Carbon Fund (Jul’03)
Slide shows the Community Development Carbon Fund, new in July 03.
The Community Development Carbon Fund (CDCF) will link small-scale projects in developing countries seeking carbon finance with companies, governments, foundations, and NGOs seeking to improve the livelihoods of local communities and obtain verified emission reductions (ERs). The World Bank which developed the CDCF in collaboration with the United Nations Climate Change Secretariat and the International Emissions Trading Association, announced commitments of US35M from both public and private sector participants, as part of a US100M package.

10. Kyoto Protocol: Implementation Mechanisms
Joint Implementation
activities implemented jointly between developed/EIT country Parties (ERUs)
Emissions trading
can be used as supplementary to actions to meet reduction commitments (AAUs)
Clean Development Mechanism (CDM)
developing country Parties can volunteer to reduce emissions via joint activities with developed Parties (CERs)

11. Annex I Countries need to know where we want to go; set a target
Vision is this target
getting there is the difficult part

12. Joint Implementation: An Overview
Article 6 of the Kyoto Protocol (KP)
Climate change mitigation projects implemented between two Annex 1 countries
Creation, acquisition and transfer of “emission reduction units (ERUs)”
JI projects eligible from year 2000, but ERUs can only be issued for a crediting period starting after 2008
need to know where we want to go; set a target
Vision is this target
getting there is the difficult part

13. Joint Implementation: An Overview
ERUs prior to 2008?
can transact/transfer as “assigned amount units (AAUs)” under Art. 17 of KP (ET)
claims and emission reductions need to be negotiated between host, investor country and project developer
need to meet eligibility criteria for participating in ET (= JI first track projects)
need to know where we want to go; set a target
Vision is this target
getting there is the difficult part

14. Joint Implementation: An Overview
Only GHGs covered under Annex A of KP: CO2, CH4, N2O, HFCs, PFCs and SF6
Twin track approach for JI (COP6, Bonn, 2001)
two separate approaches for countries hosting a JI project
track 1 ERUs are issued by the host country: host country eligible to international emissions trading (IET) may verify ERUs as being additional
track 2 ERUs are issued by the Supervisory Committee (SC): when host country does not meet eligibility criteria for IET, but is eligible to participate in JI, ERU verification must follow procedure under the SC
need to know where we want to go; set a target
Vision is this target
getting there is the difficult part

15. Joint Implementation: An Overview
Eligibility requirements to transfer/acquire ERUs under JI track 1: (a) Party to the KP
(b) calculate/record assigned amounts (AA) (c) national registry in place (d) national system for GHG accounting (e) annual submission of GHG inventory (f) submission of supplementary info on AA Plus the Additionality factor (emission reductions additional to what would otherwise occur)
need to know where we want to go; set a target
Vision is this target
getting there is the difficult part

16. Joint Implementation: An Overview
Eligibility requirements to transfer/acquire ERUs under JI track 2: (a) Party to the KP
(b) calculate/record assigned amounts (AA) (c) national registry in place * JI track 1 requirements less (d), (e) and (f)
need to know where we want to go; set a target
Vision is this target
getting there is the difficult part

17. Joint Implementation: An Overview
JI Track 1 Projects
JI Track 2 Projects
Verified according to the criteria for JI as designed by and applicable in the host country
Verification likely to be different for each country
No Annex-1 country eligible as of yet
Projects in countries not in compliance with requirements for monitoring/reporting of GHG emissions (criteria d,e,f)
Need to follow verification procedure (to be designed by the Supervisory Committee)
SC - to be elected at 1st COP/MOP once KP enters into force
SC to accredit Independent Entities (IEs) to validate/verify/certify
need to know where we want to go; set a target
Vision is this target
getting there is the difficult part

18. Joint Implementation: An Overview
Eligible projects (same as CDM):
installations based on renewable energy source
fuel switch to lower carbon intensive fuels
energy efficiency at supply side
energy efficiency at demand side
combined heat and power (CHP) projects
agricultural sector projects (excl. landuse change)
transport sector
reduction in methane emissions
reforestation/afforestation projects
need to know where we want to go; set a target
Vision is this target
getting there is the difficult part

19. Joint Implementation: An Overview
Eligible project developers:
Government bodies/agencies
Municipalities
Foundations
Financial institutions
Private sector companies
NGOs
Organisations acting as an intermediary for any of the above
need to know where we want to go; set a target
Vision is this target
getting there is the difficult part

20. Joint Implementation: An Overview
Eligible technologies:
no specific performance standards apply
project technology introduced should at least have an equal or have a better performance standard than the existing operational technologies in the host country
SC to design the rules and procedures for JI building on the CDM procedures
need to know where we want to go; set a target
Vision is this target
getting there is the difficult part

21. Project Cycle for JI Track 2: Design and Operation
Project idea note (PIN)
assess eligibility, feasibility etc.
Project design document (PDD)
project description; baseline methodology; project duration; monitoring methodology/plan; GHG accounting; E/SIA; stakeholder comments; additionality/sustainability assessment
Project validation by independent entity (IE)
Project registration
need to know where we want to go; set a target
Vision is this target
getting there is the difficult part

22. Project Procedure: Design Phase
National or international aministration
Project developer
Independent entity (IE)
JI Supervisory Committee (SC)
Host country
Project Design Phase
Step 1: JI project idea, definition
Step 2: Preparatoin of Project Idea Note (PIN)
Pre-screening of eligibility of the proposed project
Pre-screening of eligibility
Negative
Positive
Step 3: Opinion on the PIN
Step 4-5: Preparation of PDD
Step 6-7: Determination of the PDD and other docs by an IE
Possible review PDD by admin
Undertake EIA
Submission of IE report to SC
Step 8: Possible review by SC
Registration of the project with host country
Registration of the project by admin
Step 9: Project confirmation by SC

23. Project Procedure: Operation Phase
National or international administration
Project developer
Independent entity (IE)
JI Supervisory Committee (SC)
Host country
Project Operation
Step 1-2: Monitoring of project performance and submission of monitoring results/report to IE
Step 3: Verification by IE
IE submits verification report to SC
Step 4: Possible review by SC
Verified ERUs recorded in host government’s national registry
Step 5: SC confirms emission reduction verification by IE
Issue ERUs
ERU transfer recorded in the national registry

24. CP and JI: The Link
Cleaner Production applicable to all eligible projects mentioned
Stronger link with renewable energy, fuel switch, CHP and supply-side energy efficiency projects
CP Financing through JI process
(e.g. Co-operation between Bulgarian and Dutch Governments)
need to know where we want to go; set a target
Vision is this target
getting there is the difficult part

25. Goals of CDM
Lower the overall cost of reducing GHG emissions released to the atmosphere
Assist developed country (“Annex I”) Parties in complying with their emission reduction commitments
Support sustainable development initiatives within developing countries

26. Clean Development Mechanism
CDM is essentially a market
product: certified emission reduction (CER)
demand: Parties with GHG reduction commitments
supply: mainly developing country parties to the KP
CERs verified/certified by accredited body
Resultant CERs added to parties with GHG reduction commitments
Supplier benefits technology transfer / SD

27. CDM: Eligible Projects
Fuel switch to lower carbon intensive fuels
Installations based on renewable energy
Combined heat and power (CHP)
Supply-side energy efficiency improvements
End-use energy efficiency improvements
Agriculture sector (except land-use change)
Reduction in methane emissions
Reforestation/afforestation projects

28. CDM: Project Cycle

29. CDM: Project Cycle Many specific requirements:
validation of a project
registration with the CDM Executive Board
monitoring, verification and certification of GHG offsets
Various steps in a CDM project cycle:
to ensure that the project activity achieves the proposed emission reductions
detailed documentation, various kind of agreements and mechanisms required adds up to the transaction costs
large projects are able to absorb these costs

30. CDM: Fast Track Projects
Why do we need a fast track?
process not worth it for small projects (high transaction costs)
many small projects deliver significant local sustainable development benefits
small-scale technologies are some of the most promising for solving the long term problem of climate change (e.g. solar; wind; fuel cells)
CDM might lose public support if rules are biased toward large capital-intensive projects
Smaller projects on a “fast track”
renewables up to 15 MW
energy efficiency up to 15 GWh/yr
other emissions reductions project less than 15 kilotons of CO2 annually

31. CP Practitioners: Focal Points for Action
Enabling activities - overcoming barriers
work with government
work with industry
KP implementation
work with JI or CDM projects
Follow up and preparation for next stages
auditing and on-going verification

32. Enabling Activities: Working with Government
Public sector awareness and education on climate change, in co-ordination with National UNFCCC focal point
Public sector awareness and education on opportunities for key local industries
Policy advice related to industries’ needs to enable JI/CDM projects, in co-ordination with National CDM authority
Assistance in formulation of national implementation programmes (i.e. inventories, needs, priorities, dialogue, etc.)
Implementation of projects (pilot and full-scale) with measures to mitigate climate change

33. Enabling Activities: Working with Industry
Private sector awareness and education workshops related to climate change, in co-ordination with National UNFCCC focal point
Private sector awareness and education workshops on JI/CDM, in co-ordination with National JI/CDM authority
Continued emphasis on enhancement of energy efficiency in relevant sectors including GHG measurements
Promotion, application and diffusion of technologies, practices and processes that control, reduce or prevent GHG emissions in addition to energy efficiency measures

34. Kyoto Protocol Implementation
Build relationship with National JI/CDM authority
co-operation on awareness-raising, workshops
co-operation with policy advice to government
co-operation with pilot studies, projects
Develop projects with industry
integrate greenhouse gas calculations into in-plant assessments
transfer CP investment financing knowledge toward JI/CDM related project development for:
renewable energy sources
energy conversion and recovery
new energy efficient processes
technology transfer for non-energy-related GHG reductions

35. UNFCCC-Kyoto Protocol
CP and UNFCCC-Kyoto
Policy advice on industry’s needs to enable JI/CDM
With national focal point (NFP), submit pilot and full-scale projects to GEF
Engage in technology needs assessments project with NFP
Propose JI/CDM projects
Raise awareness of JI/CDM opportunities among local key industries and partners
Assistance in formulation of national implementation plans (GHG inventories, needs etc)
UNFCCC-Kyoto Protocol
CP Activities

36. Why Kyoto?
Likely that Kyoto Protocol will enter into force in the near future
pending USA and/or Russia ratification
To be prepared, “a foot in the door”
potential partnerships, access to financial resources and technologies
Existing experience
especially in the energy sector
Benefits for industries
sustainable business, expand business opportunities and differentiate from competitors

37. Questions to Consider What are the opportunities under the Convention?
What are the national priority energy issues and related industry sectors?
What kind of expertise/services can you offer to implement priorities?
What kind of necessary expertise/services you can obtain from the other practitioners?
What kind of financial assistance are available to implement projects under the Convention?

38. Summary: Develop an Action Plan
Collect information
Define competitive advantages
experience of work in the priority sectors, existence of developed methodologies for addressing GHG emissions, successful training initiatives, trust of the main industry actors etc.
Organise meetings/seminars/workshops
co-ordinate with the Convention implementation bodies to exchange information and experiences and build capacity
Develop JI/CDM projects and training programs
relate to national priorities under the Convention and Protocol
Explore funding opportunities
consider other UNFCCC and KP financing mechanisms

39. Questions? For more information:
UNEP:
Basel:
POPS:
Kyoto:
UNEP DTIE contacts: