in the trenches/climate

 

7. On the Other Hand...

On the Other Hand...Bill Hare, Climate Policy Director, Greenpeace International, on why Joint Implementation is not a good idea.

Joint implementation (JI) for credit involves the idea that acountry with a legally-binding emission obligation may undertake an activity to reduce greenhouse gas emissions in another country that does not have legally-binding emission limits and be consequently allowed to adjust its limits with an emission credit. Economists argue that this is the most cost-effective way to reduce emissions. Though the theory might be superficially attractive, the reality is considerably more complicated. The environmental, economic and political risks of JI have led nearly all environmental nongovernmental organizations involved with climate, most developing countries, and most industrialized nations to oppose its use in developing countries.

As developing countries do not have and will not have binding emission limits in the current round of negotiations, there is no guarantee that JI projects will actually reduce emissions overall. In a situation where both countries have legally binding emission limits, there is discipline on both to ensure that JI projects really perform. If they do not, then the temptation to breach limits overall will be difficult to resist.

Where the host country for a JI project does not have a legally binding emission limit, then a perverse incentive system would come into play. In order to generate an emission credit, the project baseline has to be estimated; for example, how much a power station would have emitted withoutt JI. The JI project would aim to increase the efficiency of the project, with the emissions credit being calculated relative to the project baseline. In these cases, it is clear that both the donor country and the host country have an incentive to "inflate" the baseline and exaggerate the inefficiency of the original project. This isa virtually insurmountable problem.

Many developing countries are concerned that JI is an attempt to move the onus of reducing emissions away from the industrialized countries, who are the main emitters both currently and historically. Hence JI is seen as inequitable.

Economically, JI could slow down the rate that energy efficiency and renewable energy technology is being introduced in the industrialized countries. The use of carbon offsets proposed bysome US companies is a further risk, since planting trees to sequester carbon is not the same as avoiding fossil fuel emissions in the first place. Sequestered carbon would have to be stored for geological time periods, which is clearly notpossible.

Finally, developing a JI for credit system with countries who do not have legally binding emission limits could undermine future efforts to develop a global CO2 emission trading system. For if developing countries can get JI projects without accepting any legal obligations, then there will be little incentive to join in the global effort to reduce CO2 emissions or to use a trading system to do so.

Developed countries have to act first before we can expect developing countries to take on obligations. Developing countries have become very skeptical about the intentions of the industrialized nations, because of their failure to take action over the last five years to reduce greenhouse gas emissions. Developed countries must also provide the lead in ensuring that climate-friendly technologies are transferred to developingcountries. There has been little or no action to stem the flow of technologies that rapidly increase CO2 emissions (i.e. coal powerstations). The absence of agreement on JI is not the impediment to this: it is lack of political will on the part of the industrialized nations.

Many developing countries already are doing the basic preliminary work to reduce the growth in their emissions. Once developed countries have made legally binding commitments to reduce emissions and have adopted measures to achieve them, then we can expect developing countries to start talking about their own emission obligations.

The best and perhaps only way to get all this to occur is for the Kyoto protocol negotiations to adopt a legally binding emission reduction target for developed countries for the year 2005. A later date (i.e. 2010) will convince developing countries that the climate issue is just another form of economic colonialism rather than a genuine attempt to solve one of the greatest environment problems facing the earth.

 

Annie Petsonk of EDF on why Joint Implementation is a good idea

International Greenhouse Gas Emissions Targets and Joint Implementation

Under the Rio Treaty on Climate Change, nations will meet in Kyoto in December 1997 to adopt legally binding caps on greenhouse gas (GHG) emissions. The Treaty envisions that industrialized nations will adopt caps first, since their pollution has caused most of the problem to date. Developing nations likely won't adopt caps until some future time; however, their emissions are increasing rapidly, and many want to participate in emissions reduction activities now.

The Treaty provides that nations may implement emissions reduction activities jointly. So, if a nation with a cap invests in emissions reductions in a nation that has no cap but would like to participate voluntarily, emissions reduced through such "joint implementation" (JI) should be recognizable under the investing nation's cap, on terms acceptable to both nations.

There are strong environmental, economic, and development reasons to favor voluntary JI. Globally, developing nation emissions will soon reach or exceed those from industrialized nations. Business-as-usual increases in developing nations over the next 10-20 years will make it nearly impossible to limit warming to sustainable levels, even if industrialized nations adopt tough caps. It's environmentally essential that the Kyoto agreement invite the immediate voluntary participation of developing nations and their eventual adoption of caps.

JI's benefits also appear at the project level. Where, for example, reducing emissions from an efficient power plant in an industrialized nation would cost substantially more than achieving the same emissions reductions by modernizing an inefficient power plant in a developing nation, the investment should flow to the developing nation. That nation will benefit from improved technology and cleaner local air, while the industrialized nation will reduce emissions at lower cost. Similarly, JI can provide financing to protect areas of high biodiversity that also sequester CO2, or to re-forest degraded lands.

To address concerns about the quality of JI reductions, JI host nations should develop national legislation for certification of independent, third-party project auditors, and utilize generally accepted accounting principles for determining emissions reductions. All JI project determinations should be publicly available, and consideration should be given to the use of an Independent Panel that could review challenges to JI projects brought by Parties and NGOs.

Ideally, perhaps all nations should adopt caps together. In practice, developing nations may not have caps during critical years for infrastructure growth. JI can enable emissions reductions that otherwise will go unrealized during this critical period. JI investments in basic infrastructure can reduce emissions well beyond the near term. JI can also shift the technologic norm for recipients to one that is more, rather less, favorable to the environment. And, because JI spurs firms to innovate, and compete on an equal footing to offer emissions reduction technologies and services worldwide, JI provides an essential base of political support for caps to be adopted first in industrialized nations. Bill Hare and Annie Petsonk have agreed to respond to each other and to interesting questions and comments from our readers. Let us know what you think via e-mail and we'll post the results in about a months time.

 

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