Joint Implementation (JI)
Joint Implementation (JI) is established under Article 6 of the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC). JI enables Annex 1 countries (developed countries and economies in transition) to undertake cross-border investments in projects aimed at reducing greenhouse gas emissions. The investor country (or a private actor in that country) provides financial and/or technical assistance to achieve cost-effective greenhouse gas emission reductions in a host country in exchange for emission reduction units (ERUs) or "carbon credits". These credits can then be applied by the investor country toward meeting its obligations under the Protocol.
For example, a British company that faces high costs for reducing domestic emissions can reduce emissions for a lower cost through JI by investing in clean technologies. Credit for the emission reductions from the project can then be used to increase the emission allowance of the British company undertaking the project, while the project receives foreign investment and more efficient technologies: a win-win scenario.
JI is central to the Japanese strategy for implementing the Protocol and most Annex 1 countries will seize the opportunities which exist in Central and Eastern Europe to invest in more efficient industrial power plants to achieve global reductions of CO2. In order to develop an operational regime for JI, the Conference of the Parties (COP) decided in 1995 to launch a pilot phase for "activities implemented jointly" (AIJ). This pilot phase offers an excellent opportunity for the development of common methodologies for JI projects, estimate the environmental and economic efficiency of the instrument, track and verify project performance, as well as to develop the necessary technical and institutional know-how to implement a JI regime in the future. Switzerland, the US and Australia (through the International Greenhouse Partnerships Office) have set up national programmes to promote AIJ projects.
To be eligible to qualify as a JI activity and to receive emission reduction units, projects must satisfy the following criteria:
The project must be undertaken between Annex 1 countries;
The project activity must be of a type that results in a reduction in emissions by sources or enhancement by removal by sinks;
The project provides a reduction or enhancement that is additional to any that would otherwise occur in the absence of the project activity;
The participation of both Parties must be voluntary and approved by each Party; and
The project must be supplemental to domestic actions to reduce greenhouse gas emissions.
At COP 6 held in Bonn in July 2001, the Parties further refined these criteria by agreeing that Annex 1 countries are to refrain from using emission reduction units generated from nuclear facilities to meet their commitments. They also affirmed that limited use can be made of forestry activities to reduce emissions.
