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Market mechanism Lowest marginal cost of abatement

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

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Market mechanism Lowest marginal cost of abatement

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  1. 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)

  2. Eligibility requirements (ERU issuance, transfer and acquisition) • Party to the Kyoto Protocol • Assigned amount calculated • National registry in place for tracking assigned amount Track 2 procedure Verification procedure under JISC • National system in place forestimating emissions/removals • Submission of most recent required emissions inventory • Accurate accounting of assigned amount and submission of information Track 1 procedure Verification procedure according to host Party rules • Participation requirements • Designated focal point • National guidelines and procedures

  3. Track 2Verification procedure under JISC • Mandatory publication procedures regarding all project steps (JI information system) • Full transparency Track 1Verification 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

  4. Members/alternates: Basic role: Operationalization and supervision of JI Track 2 procedure

  5. 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) • 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 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 

  6. 2006: operationalization of JI Track 2 procedure Launch ofJI Track 2 procedureon26 October 2006 Since 2007: operation/supervision of JI Track 2 procedure

  7. Project development Project implementation Preparation and publication ofPDD byproject participants/AIE Preparation and publication ofmonitoring report byproject participants/AIE Carbon Market 30 days:stakeholders’ comments Fees (advance payment)Project approval by host PartyParticipation requirements Fees Project approval by non-host Party (at the latest) Preparation and publication ofDetermination byAIE Preparation and publication ofVerification byAIE Eligibility requirements Issuance of ERUsby host Party (conversion of AAUs/RMUs) Transfer of ERUs by host Party and acquisition of ERUs 45 days:decision on review request byParties involved/individual JISC members,supp. by 2 JISC members’/alternates’ appraisal (incl. expert inputs) 15 days:decision on review request byParties involved/individual JISC members,supp. by 2 JISC members’/alternates’ appraisal Possiblereview byJISC Possiblereview byJISC

  8. 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

  9. 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 SF6emissions (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)

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

  11. “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

  12. Application as of 28 April 2008

  13. 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

  14. http://ji.unfccc.int/

  15. 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

  16. 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

  17. 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

  18. 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

  19. 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.

  20. 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

  21. 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

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