Motoharu YamazakiUNFCCC Secretariat

http://ji.unfccc.intmyamazaki@unfccc.int

Joint Implementation- An overview and recent development -

Moscow Carbon Market Forum 2008Moscow, Russian Federation, 28-29 April 2008

Joint Implementation Basic principles

Market mechanism

Lowest marginal cost of abatement

Additionality to any emission reductions that would occur in the absence of the project

Bottom-up approach, re-use and broad application principles for standards

International supervisory and standard setting bodies

Two tracks: Track 1 & Track 2

Track 2 process overseen by the body known as the Joint Implementation Supervisory Committee (JISC)

Joint Implementation JI Track 1/Track 2 (1)

Participation requirements• Designated focal point• National guidelines and procedures

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• Party to the Kyoto Protocol

• Assigned amount calculated

• National registry in place for tracking assigned amount

• National system in place forestimating emissions/removals

• Submission of most recent required emissions inventory

• Accurate accounting of assigned amount and submission of information

Track 2 procedure

Verification procedure under JISC

Track 1 procedure

Verification procedure according to host Party rules

Joint Implementation JI Track 1/Track 2 (2)

Track 2Verification procedure under JISC

• Mandatory publication procedures regarding all project steps (JI information system)

• Full transparency

Track 1 Verification procedure according to host Party rules

“Bali decision”

Request to secretariat to develop Web-based interface to be used by DFPs of host Parties (having provided information on national guidelines/procedures) to:

• Provide transparent access to project information

• Provide information to the international transaction log (ITL) on Track 1 project establishment

• Receive unique project identifiers to be used with the ITL

Overview of all JI projects

Joint Implementation JI Supervisory Committee

Members/alternates:

Members Alternate members

Annex I (EIT)

Mr. Oleg Pluzhnikov Ms. Agnieszka Gałan

Ms. Daniela Stoycheva Mr. Georgiy Geletukha

Mr. Vlad Trusca Mr. Matej Gasperic

Annex I (Non-EIT)

Mr. Olle Björk Mr. Franzjosef Schafhausen

Mr. Maurits Blanson Henkemans Mr. Hiroki Kudo

Mr. Georg Børsting Mr. Benoît Leguet

Non-Annex I

Mr. Carlos Fuller Mr. Javier Andrés Hubenthal

Ms. Fatou Gaye Mr. Vincent Kasulu Seya Makonga

Mr. Muhammed Quamrul Chowdhury Mr. Maosheng Duan

Non-Annex I (AOSIS)

Mr. Derrick Oderson Ms. Ngedikes Olai Uludong-Polloi

Basic role: Operationalization and supervision of JI Track 2 procedure

Mandates: CDM experience

• Rules of procedure

• Accreditation of independent entities

• Criteria for baseline setting and monitoring

• Provisions for small-scale projects

• JI project design document (PDD) form(s)

• Reviews

• Provisions for fees

• Management plan

• Reporting to the CMP

Joint Implementation Mandates of the JISC

Similarities Differences

• No approval of methodologies

• No project registration

• No ERU issuance by the JISC

• No limitation of LULUCF projects to afforestation and reforestation

• No restriction on CPR regarding ERUs issued under JI Track 2

Legal basis: “Marrakesh Accords” (Decision 9/CMP.1 ) “Montreal decision” (Decision 10/CMP.1 ) “Nairobi decisions” (Decisions 2/CMP.2 & 3/CMP.2 ) “Bali decision” (Decision _/CMP.3)

Joint Implementation Status of work of the JISC

2006: operationalization of JI Track 2 procedure

Mandates Adoption/ agreement (revision) by J I SC

Adoption by CMP

Administrative issues • Rules of procedure • Management plan 2006-2007

J I SC 01

J I SC 04 (05)

CMP 2

- PDD forms • PDD form • Guidelines for users (PDD form) • LULUCF PDD form • Guidelines for users (LULUCF PDD form)

J I SC 03

J I SC 03 (06) J I SC 04

J I SC 04 (06)

CMP 2

- CMP 2

- Verification procedure • Procedures on public availability of documents • Procedures for appraisals of determinations • Procedures for reviews

J I SC 04 J I SC 04 J I SC 03

- - -

Accreditation • Standards/ procedures • Panel

J I SC 04 (06)

J I SC 03

- -

Baseline setting and monitoring • Guidance on criteria

J I SC 04

-

Small-scale projects • Provisions for SSC projects • SSC PDD form • Guidelines for users (SSC PDD form)

J I SC 04 (06) J I SC 04 (05) J I SC 05 (06)

-

CMP 2 -

Fees • Provisions

J I SC 04

CMP 2 (endorsement)

J I SC report to CMP 2 • Main report • Addendum

prior to J I SC 04

after J I SC 05

- -

Launch ofJI Track 2 procedure

on26 October 2006

Since 2007: operation/supervision of JI Track 2 procedure

Joint Implementation JI Track 2 project cycle

Preparation and publication ofDetermination by

AIE

Possiblereview by

JISC

Preparation and publication ofmonitoring report byproject participants/AIE

Preparation and publication ofVerification by

AIE

Possiblereview by

JISC

45 days:decision on review request by

Parties involved/individual JISC members,

supp. by 2 JISC members’/alternates’ appraisal (incl. expert inputs)

15 days:decision on review request by

Parties involved/individual JISC members,

supp. by 2 JISC members’/alternates’ appraisal

Project development Project implementation

Issuance of ERUs

by host Party (conversion of AAUs/RMUs)

Transfer of ERUs by host Party and

acquisition of ERUs

Carbon Market

Preparation and publication ofPDD by

project participants/AIE

30 days:stakeholders’ comments

Fees (advance payment)Project approval by host Party

Participation requirements

Fees Project approval by non-host Party

(at the latest)

Eligibility requirements

Joint Implementation Baseline setting / monitoring

Appendix B to JI guidelines (adopted by CMP)

Guidance on baseline setting and monitoring (adopted by JISC)

Baseline: on project-specific basis and/or using multi-project emission factor

Project participants allowed, but not obliged, to use approved CDM baseline and monitoring methodologies

Additionality: various approaches possible

Provisions for small-scale projects (adopted by JISC)

JI SSC definitions: like for CDM SSC project activities (non-A/R) – revised by CMP 2

Main difference to CDM approach: No limits on bundling

Joint Implementation Stakeholders’ comments (status)

133 PDDs published for stakeholders’ comments(4 open for comments)

Host Parties:• Bulgaria (10 PDDs)• Estonia (4)• Germany (2)• Hungary (2)• Latvia (1) • Lithuania (7)

Technologies:• Renewable energy (biomass, wind, hydro)• Methane avoidance (gas distribution, landfills, coal mine)• Destruction of nitrous oxide from chemical processes (nitric acid production)• Energy efficiency (manufacturing industries, district heating)• Fuel switch (manufacturing industries, transportation, power generation)• Reduction of HFC, PFC and SF6 emissions (chemical and metal industries)

Emission reductions 2008-2012: ~ 251,000,000 t CO2equ

• Poland (7)• Romania (2)• Russian Federation (75)• Slovakia (1)• Ukraine (21)• Czech Rep. (1)

Joint Implementation Participation requirements (status)

Designated Focal Point

National guidelines

and procedures

Austria

Belarus*

Belgium

Bulgaria

Canada

Croatia

Czech Republic

Denmark

Estonia

European Community

Finland

France

Germany

Hungary

Ireland

Italy

Designated Focal Point

National guidelines

and procedures

Japan

Liechtenstein

Lithuania

Luxembourg

Netherlands

New Zealand

Poland

Portugal

Romania

Russian Federation

Slovenia

Spain

Sweden

Switzerland

Ukraine

UK

* The CMP, by its decision 10/CMP.2, adopted an amendment to Annex B to the Kyoto Protocol, adding Belarus to it.

Joint Implementation Accredited independent entities (1)

“Montreal decision” Designated operational entities (DOEs) under the CDM may act

provisionally as accredited independent entities (AIEs) under JI Determinations/actions valid only after accreditation

Accreditation status 15 applications (13 DOEs) to date, of which:

• 14 desk reviews conducted

• 13 on-site assessments conducted

• 3 indicative letters issued

• No witnessing assessment started yet

Joint Implementation Accredited independent entities (2)

• Application as of 28 April 2008

Ref No.

Entity name Sectoral scopes applied

0001 Det Norske Veritas Certification AS (DNV) 1-15 (all scopes)

0002 Japan Quality Assurance Organization (JQA) 1-15 (all scopes)

0003 Deloitte Tohmatsu Evaluation and Certification Organization Co., Ltd (TECO) 1-10, 12-13, 15

0004 Lloyd’s Register Quality Assurance Ltd. (LRQA) 1-13

0005 JACO CDM., Ltd. 1-15 (all scopes)

0006 Japan Consulting Institute (JCI) 1-5, 8-11, 13

0007 Bureau Veritas Certification Holding SAS 1-15 (all scopes)

0008 TÜV SÜD Industrie Service GmbH 1-15 (all scopes)

0009 Spanish Association for Standardisation and Certification (AENOR) 1-15 (all scopes)

0010 SGS United Kingdom Limited 1-15 (all scopes)

0011 TÜV NORD CERT GmbH 1-15 (all scopes)

0012 TÜV Rheinland Japan Ltd. 1-15 (all scopes)

0013 SQS, Swiss Association for Quality and Management Systems 1-15 (all scopes)

0014 KPMG Sustainability B.V. (KPMG) 1-4, 13

0015 Germanischer Lloyd Certification GmbH 1-3, 7, 10, 13

Joint Implementation Determinations (status)

Determinations regarding PDDs

First determination deemed final on 26 March 2007(“Switch from wet-to-dry process at Podilsky Cement”):

Host Party: Ukraine

Emission reductions 2008-2012: ~ 3,000,000 t CO2 equ

Joint Implementation UNFCCC JI website

http://ji.unfccc.int/

Reporting and review Overview 2006-2008

Reporting

(by Parties)

Review + Reports

(by ERTs)

• Initial report: deadline 1 Jan 07– 37 reports received by 1 Mar 08 – Most of them received in Dec 06 – Late submissions:

Iceland (11 Jan 07), the Russian Federation (20 Feb 07), Canada (15 Mar 07), Romania (18 May 07), Bulgaria (25 Jul 07)

– Monaco 7 May 07 (ratification 27 Feb 06, entry into force 28 May 06)

– New KP Parties:Croatia (rat. 30 May 07, e.i.f. 28 Aug 07), Australia (rat. 3 Dec 07, e.i.f. 2 Mar 08)

• Annual report: deadline 15 Apr 08

• Periodic reporting (NC4): deadline 1 Jan 06– Pending submissions by Luxemburg

• Initial review:– 37 review reports in 2007-2008

(decision 26/CMP.1 and 22/CMP.1)– 32 reports published, 4 under

preparation, 1 review pending Belarus– 2 new initial reviews: Australia, Croatia– 37 + 4 Review Reports of the 2006

Inventory submission under the Convention (decisions 7/CP.11)

• 38 Annual Review Reports to be prepared by 15 Apr 08 (Croatia not included)

• Periodic review (NC4) and RDP review:– 37 In-depth Review Reports in 2007–

2009– 16 IDRs published, 10 reviews planned

for May 2008

Reporting and review Establishing eligibility

Eligibility to be established (decision 11/CMP.1)

No later than 16 months have elapsed since the submission of the initial report unless the Enforcement Branch of the Compliance Committee finds that the Party does not meet eligibility requirements

Early eligibility: not applied

Status: 25 Parties are eligible as of 28 April 2008, another 4 parties will become eligible as of 29 April 2008:

– Ukraine: 29 April 2008 (expected) – Russian Federation: 20 June 2008 (expected)

Eligibility status released from the CAD to the ITL and eligible Parties could perform transactions, e.g. on emission trading

Reporting and review Maintaining eligibility

Decisions 11/CMP.1 and 15/CMP.1

Party continues to meet the eligibility requirements unless the Enforcement Branch of the Compliance Committee decides that the Party does not meet eligibility requirements

Party may start annual reporting from the year following the submission of the initial report, on a voluntary basis

2008 inventory submission for Kyoto Parties is already the KP annual submission for Parties to maintain eligibility

COP13/CMP3 Bali Roadmap

A two year negotiating process for a broad and robust response to climate change (deadline 2009).

Components:

• A new negotiation process under Convention

• Reducing emissions from deforestation

• Technology transfer

• Kyoto track: time table for the AWG, adaptation fund and the review of the Protocol

COP13/CMP3 Bali Action Plan

Enhance the implementation of the Convention (along with Kyoto negotiations)

An Ad Hoc Working Group on Long-Term Cooperative Action (AWG-LCA) to address:

• Nationally appropriate mitigation commitments or actions by developed countries and mitigation actions by developing countries;

• Actions to adapt to climate change and promote climate-resilient development;

• Finance and technology cooperation to support action.

Bangkok Climate Change Talks AWG-LCA 1

Agreed on work programme 2008

Organization of workshops to deepen understanding and clarify elements in Bali Action Plan

• Adaptation;

• Financial flow;

• Technology transfer;

• Deforestation / forest degradation;

• Sectoral approaches, sector specific actions;

• Risk management and risk reduction strategies

• R&D of innovative technology

• Shared vision of long-term cooperative action

Bangkok Climate Change Talks AWG 5

Emission trading, project-based mechanisms and LULUCF should continue to be available after 2012

Consider:

• Improvements to emission trading and project-based mechanisms;

• Treatment of LULUCF in 2nd commitment period;

• Approaches targeting sectoral emissions;

• Broadening of coverage of GHGs, sectors and source category;

• Approaches on emissions from aviation and marine bunker fuels;

• Implications for carbon market