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Introduction to registry systems under Article 7.4 of the Kyoto Protocol

Introduction to registry systems under Article 7.4 of the Kyoto Protocol. Pre-sessional consultations on registries Bonn, 2-3 June 2002. Andrew Howard UNFCCC secretariat ahoward@unfccc.int. Scope of presentation. Kyoto Protocol compliance Registry system requirements

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Introduction to registry systems under Article 7.4 of the Kyoto Protocol

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  1. Introduction to registry systems under Article 7.4 of the Kyoto Protocol Pre-sessional consultations on registries Bonn, 2-3 June 2002 Andrew Howard UNFCCC secretariat ahoward@unfccc.int

  2. Scope of presentation • Kyoto Protocol compliance • Registry system requirements • - registry structures • - transactions • - features for integrity and transparency • Based on document FCCC/CP/2001/13/Add.2: • Decision 19/CP.7 on Article 7.4 (pages 55-72)Para numbers in this presentation refer to this decision • Decision 17/CP.7 on the CDM (see pages 41-43 on the CDM registry)

  3. Party B is a net seller … Sink additions Sink additions Mechanisms additions Mechanisms subtractions Annex B target Annex B target Target Emissions Compliance with Kyoto Protocol targets Party A is a net buyer … Target Emissions

  4. AAU • Assigned amount unit (AAU) • Based on the Annex B target (Articles 3.7/8) • Removal unit (RMU) • Based on carbon sequestration in sinks (Articles 3.3/4) RMU ERU • Emission reduction unit (ERU) • converted from AAUs or RMUs as a result of JI projects • Certified emission reduction (CER) • issued into the CDM registry as a result of CDM projects CER Accounting units (paras 1-4) All units denominated as 1 tonne of CO2 equivalent:

  5. Transaction log(operated by the secretariat) ERU Transactions CER AAU CDM registry(operated by the executive board) Annex ICanada Annex I Bulgaria Annex I Germany Annex I Russia National registries(operated by Annex I Parties) Tracking the units through the registry system A registry is a standardized electronic database for recording and tracking of units (ERUs, CERs, AAUs and RMUs) (para 19)

  6. Canada Held by the government Party account Held by companies, organizations or individuals (if authorized by the Party) Legal entity a/c Legal entity a/c Units transferred here to count towards compliance Retirement a/c Cancellation a/c Units transferred here to compensate for net emissions from sinks or to strengthen targets National registry account types (para 21)

  7. Calculation of assigned amount (Articles 3.7/8) Bulgaria Party account AAU AAU AAU AAU Legal entity A Legal entity B Retirement a/c RMU RMU RMU RMU Cancellation a/c Calculation of net sequestration (subject to limits!) (Articles 3.7/8) AAU and RMU issuance (paras 23 and 25)

  8. Germany Canada Party account Party account CER Legal entity A Legal entity A AAU ERU Legal entity B Legal entity B RMU Transfers and acquisitions under emissions trading (para 30)

  9. Unused units carried-over in holding accounts to the next commitment period (paras 36) Russia Retirement(para 34) Party account Legal entity A CER AAU RMU ERU Legal entity B Retirement a/c Compliance assessment Units in retirement account Emissions 2008 to 2012 Retirement and carry-overs (paras 34 and 36) >= < Units in retirement accounts not transferable

  10. AAU ERU Russia Germany Party account Party account ERU Legal entity A Legal entity A JI project (conversionof AAUsto ERUs) Legal entity B Legal entity B Retirement a/c Retirement a/c Cancellation a/c Cancellation a/c Verification by host Party (track 1) or independent procedure (track 2) ERU issuance (para 29)

  11. Participants’request CER CER CER CER CER CER CDM registry Canada CER CER Pending account Party account Legal entity A Share of proceeds (for adaptation and admin costs) CDM project Legal entity B Retirement a/c Bolivia account Certification of emission reductions by an operational entity Cancellation a/c India account CER issuance (into the CDM registry)

  12. Germany Party account What: Cancelled units are removed from the system and cannot be used for compliance Who: schools, NGOs, individuals, etc Legal entity A CER Legal entity B AAU ERU Retirement a/c RMU Cancellation a/c Units in cancellation accounts may not be transferred or retired Cancellation of units to strengthen targets (para 33)

  13. Features for integrity and transparency --------------------------> to keep track of the units -------------------------> to identify the accounts -----> to ensure the integrity of transactions -----------------> to maintain transparency • serial numbers • account numbers • the transaction log • accessible information

  14. AAU 01 CH 1 0 314782 000 RMU 01 CA 2 3 003752 000 ERU 01 PL 3 0 078625 033 01 BO 4 0 047691 046 CER Commitment period Unit type Projectnumber Uniquenumber Party of origin LULUCFactivity Unique serial numbers for units (para 24, 27 and 29) Number formats are not yet specified - these are examples only

  15. Canada CA 001 CA 002 CA 003 CA 485 CA 486 Party account Legal entity A Legal entity B Retirement a/c Cancellation a/c Unique number Party Account numbers (para 22)

  16. 1 Proposal 3 Instruction / transfer 1 2 2 Proposal response Transactionrecord containing: - trans. number - trans. type - serial numbers - account numbers Proposal response 4 4 Confirmation Confirmation 1 Proposal Message exchange: International transfer (para 38-43) Account in national registry of Party A Account in national registry of Party B Transaction log (automated checks)

  17. 3 Issuance 1 2 Transactionrecord containing: - trans. number - trans. type - serial numbers - account numbers Proposal response 4 Confirmation 1 Proposal Message exchange: Domestic issuance (para 38-43) Account in national registry of Party A Transaction log (automated checks)

  18. Potential discrepancies (para 42) • The transaction log conducts automated checks for: • units improperly issued or duplicated units • units previously retired/cancelled • units not carried over from the previous commitment period • eligibility of Parties / legal entities • infringements on the commitment period reserve • infringements on the limits for carbon sequestration The transaction log ensures the integrity of all transactions Each unit is held in one account at a time

  19. Publicly accessible information (paras 44-48) • Account information (account type, holder, representative, etc) • JI and CDM project information (on national registries and the CDM registry respectively) • - name • - location • - reports / documentation • Information on holdings and transactions, including on cancellations and retirements • List of legal entities authorized by the Party (national registries)

  20. Technical standards on the exchange of data between national registries, the CDM registry and the transaction log … a decision at COP 8 (Nov 2002) Establishment of national registries by Annex I Parties … before 1 Jan 2007 Establishment of the CDM registry by the CDM executive board … interim registry by COP 8? Establishment of the transaction log by the secretariat … completed by COP 10 (Nov 2004) Registries development beyond COP7

  21. Introduction to registry systems under Article 7.4 of the Kyoto Protocol www.unfccc.int Andrew Howard UNFCCC secretariat ahoward@unfccc.int

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