A regional response to global climate change

1. A regional response to global climate change The Baltic Sea region as a testing ground for for the Kyoto protocol A climate policy initiative by the Baltic Sea Region Energy Cooperation – BASREC - under the CBSS umbrella

2. Starting points • Climate change is a global issue. • Reduction of emissions of greenhouse gases is the main abatement instrument • From a climate point of view it does not matter where you reduce emissions - the effect is the same on the GHG concentration in the atmosphere • Cost-efficiency is of major importance • The Climate convention and the Kyoto protocol therefore acknowledge the use of flexible mechanisms like joint implementation

3. Baltic Sea Region: a testing ground for mechanisms Tasks decided by the BASREC energy ministers: • Write a JI handbook • Simulation of emissions trading and arranging a conference on the results • Prepare and set up a JI investment facility • Prepare a Testing Ground Agreement • Information: www@basrec.org and www@cbss.org

4. The BASREC JI handbook • First version of the handbook – now ready – but on-going process, subject to revisions • Interpretation of the international agreements– Kyoto Protocol and the Marrakech Accords (COP7), Nov 2001 • Covers two key areas: • Requirements that Parties have to meet to participate in JI - BSR status in meeting them • Advice to project developers on the Track 2 procedures, & steps to a succesful ERU purchase agreement • translated into Russian and available on website

5. Testing ground framework agreement Objectives • to build capacity and competence to use the Kyoto mechanisms and promote common understanding of concepts • to promote realisation of high quality projects in the energy sector generating emissions reductions • to gain experience with the Joint Implementation (JI) mechanism in the energy sector • to develop methods and procedures • to collaborate in addressing administrative and financial barriers, especially regarding small scale JI projects • to facilitate generation, ensure issuance and transfer of ERUs from JI projects • to implement projects early and offer credits for emission reductions prior to 2008 by appropriate means

6. The BASREC Testing Ground Agreement • Open to participation for BASREC governments and companies ( and others! ) • “As if” application of Kyoto rules before start in 2008 on projects within the energy sector. From 2008 and onwards Kyoto rules apply in full • Projects to be approved by investor and host country • Core element: already decided Testing Ground Facility to invest in JI projects for 10-20 million Euros in BASREC TGA countries • Model project agreements and handbook to support activities

7. Testing Ground Facility • Managed by NEFCO – Nordic Environment Financing Corporation • Decision by the Nordic Council of Ministers • Initially BASREC investor countries • Open for others • Fund Management Agreement with NEFCO being finalized right now

8. BASREC work ahead in the climate field • Implement the testing ground agreement and facility (the agreement has been signed by 9 countries and the TGF is being capitalised) • Analyse effects of EU accession • Revise and improve the JI-handbook as needed • Baseline development in Arkangelsk • Continue building capacity and knowledge