Joint Implementation

Overview

The idea of incorporating a mechanism into the Kyoto Protocol that allowed emissions trading between developed countries and economies in transition emerged in part out of a pilot project that began under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC) in 1995.  In negotiating the Protocol, the Conference of the Parties (COP) encouraged Parties to jointly implement emission reduction activities (referred to as Activities Implemented Jointly or AIJ) and to report to the COP through the UNFCCC Secretariat. As of 2006, a total of 86 projects are being implemented in countries with economies in transition (EIT countries), 79 of which occurred before January 1, 2000, the date at which projects could be considered under the JI mechanism.²

Under the JI program, approved emission reductions are awarded credits called Emission Reduction Units (ERUs).  One ERU represents an emission reduction equaling one ton of CO2 equivalent (Mt CO2e).  ERUs come from the host country’s pool of Assigned Amount Units, or AAUs, which have been allocated under the Kyoto Protocol. For example, a JI project resulting in emission reductions of 10 Mt CO2e would generate 10 ERUs, which the host country would transfer to the investing country in the form of 10  AAUs. This process helps ensure the total amount of emissions credits among Annex I parties does not change during of the Kyoto Protocol's first commitment period.³

Only industrialized and EIT countries in Annex 1 that have ratified Kyoto are eligible to participate in the JU mechanism and only ERU’s issued by the JI administrative body can be used a credits as part of this mechanism. Any Annex 1 country that wants to participate in JI projects must designate a Designated Focal Point (DFP) to administer JI activities.  Participating countries must also have guidelines and procedures in pace to approve and manage projects.  These procedures must include the opportunity for stakeholders' comments, and they must provide for performance monitoring of the projects and verification of emissions reductions.⁴ 

Eligible Projects

A JI project must provide a reduction in source emissions, or it must enhance removals by sinks.  These reductions and removals must be additional to what would have otherwise occurred with out the project.  Project types eligible under the JI are generally the same as the CDM, except that JI, unlike the CDM, allows forest management, cropland management, and grazing management are available.⁵

Administration and Operation

The Joint Implementation Supervisory Committee (JISC) oversees the JI program.⁶  The JISC is comprised of six members from Annex 1, three of which come from countries with economies in transition, three members from Parties that are not included in Annex 1, and one member from a small island developing state.⁷

The JI rules provide for two procedures -- Track 1 and Track 2 -- for verifying and issuing ERUs.  Under Track 1, a host Party may verify emission reductions or enhancements of removals from a JI project as being additional to any that would otherwise occur if it meets certain requirements showing its compliance with certain provisions of the Kyoto Protocol. If a host Party does not meet all of these requirements, verification of emission reductions or enhancements of removals as being additional has to be done through the verification procedure under Track 2, whereby an independent entity accredited by the JISC will determine whether the relevant requirements have been met before the host Party can issue and transfer ERUs.⁸

Projects to Date

As of February 2009, the JI mechanism has generated 190 projects, 123 of which are in Russia and the Ukraine, 55 in Eastern Europe, 7 in Germany and 5 in New Zealand. Thirty seven percent of these projects involve methane reduction in the cement and coal mining industry, 27 % were renewable energy projects, 18 % were energy efficiency, 13% were HFC, PFC and N20 reductions, and 5 percent involved fuel switching.⁹

Footnotes

¹See Annex B of the Kyoto Protocol.

²See UNFCCC (2006c). Activities implemented jointly under the pilot phase: Seventh synthesis report

³UNFCCC, Modalities for the accounting of assigned units under Article 7, paragraph 4 of the Kyoto Protocol, Decision 13/CMP.1, contained in Report of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol on its first session, held at Montreal from 28 November to 10 December 2005, 30 March 2006. http://ji.unfccc.int/Ref/index.html

⁴UNFCCC, Decision 9/CMP.1, Annex, Guidelines for the implementation of Article 6 of the Kyoto Protocol, contained in Report of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol on its first session, held at Montreal from 28 November to 10 December 2005, 30 March 2006. http://ji.unfccc.int/Ref/index.html

⁵The JI rulebook, published by the law firm, Baker & McKenzie with funding from New Zealand Ministry of Environment, provides a good overview of the JI process and access to UNFCCC and JISC materials.

⁶http://ji.unfccc.int/Sup_Committee/index.html

⁷See footnote 4, paragraph 4.

⁸http://ji.unfccc.int/Eligibility/index.html

⁹ http://cdmpipeline.org/ji-projects.htm, viewed on March 2, 2009.