Wolfgang Seidel, Chair of the Joint Implementation Supervisory Committee

1. Revision of key attributes and transitional measures relating to possible changes in the JI guidelines Wolfgang Seidel, Chair of the Joint Implementation Supervisory Committee Bonn, Germany, 24 March 2012

2. Overview • Process until now • CMP 7 mandate • Strategic position of JI • Overall vision • Key attributes: single track, regulation, governance • Transitional issues

3. CMP 7 mandate • CMP 7 could not agree on the key attibutes • Party submissions by 16 April 2012 on JI guidelines revision • JISC to recommend revised key attributes for new JI guidelines and transitional measures to CMP 8, based on • JISC recommendations from last year • Party submissions and secretariat synthesis report • JISC to recommend measures to continue ERU issuance during a gap prior to establishment of CP2 assigned amounts • Issue CP2 ERUs using CP1 AAUs or RMUs ? • Allow issuance to occur without conversion of existing AAUs or RMUs, but require deduction from assigned amount when it is established ?

4. Strategic position of JI • Universal offset standard for countries with emission caps • Collaborative mitigation tool for governments and business • Compatible and credible accounting standards • Mutual recognition of offsets for compliance purposes • Promotes greater access to lower-cost mitigation, lower transaction costs, stronger engagement of the private sector • JI at a crossroads, facing an uncertain future • Potential not yet fully realized, much growth potential remains • JI setup is specifically linked to Kyoto’s architecture of emission caps • 2nd Kyoto commitment period now confirmed but ongoing work to determine targets and establish assigned amount will take time

5. Overall vision for JI’s future • Single but optimized verification process • Regulation of JI devolved largely to host Parties • Strong international accountability (under the CMP) via a governance mechanism that oversees, harmonizes, accredits and issues offsets • Domestic policy value through open range of activities and effective support to collaboration among Parties • Scaled-up JI, allowing for scaled-up mitigation

6. Single but optimized verification process

7. International oversight of a decentralized system • Governing body oversees conformity of system with rules, ensures rectification where necessary, and reports to CMP • Governing body not involved in assessing JI activities, but empowered to act as part of its oversight role • Governing body implements strong accreditation and performance monitoring processes, with suspension/withdrawal if appropriate • Special reviews of registration and issuance cases can be done under authority of the governing body, but in line with clear criteria • Governing body can provide “best practice” guidelines • Issuance of credits is independent of assigned amount, but triggers an equivalent deduction from assigned amount

8. Host Party control through registration process • Define desired scope of activities, including • Choice of type: technologies, sectors, etc • Choice of level: project, programme, sector, policy • Demonstration of additionality • Potential for moving “beyond offsetting” • Application of conservative baselines, discounting, etc • Registration requirements to be set beforehand, as registration is automatic upon positive verifier findings • Registration procedures harmonized with other Parties

9. Eligibility requirements for Parties • Eligibility requirements are essential for system credibility • MRV of emission reductions and removals • The nature of the emissions targets • Future JI could potentially be given broad applicability to cover multiple quantitative target regimes (not only Kyoto)

10. Outlook • More consideration needed of measures to smooth the transition to the future JI model • Interaction of JI with other market mechanisms • Stakeholder involvement • JISC aims to provide a proposal for coherent and ambitious JI guidelines for CP 2 for CMP 8

11. www.unfccc.int/ji