International Climate PolicyUNFCCC and Kyoto

The economics of climate change

Main SourcesUNFCCC (2003) Caring for climate a guide to the climate change convention and the Kyoto protocol Issued by the Climate Change Secretariat (UNFCCC) Bonn GermanyAldy JE S Barrett and R N Stavins(2003) Thirteen plus One A Comparison of Global Climate Policy Architectures NOTA DI LAVORO 642003Congressional Budget Office (2003) ldquoThe Economics of Climate Change A Primerrdquo

International CooperationProblem

ndash 1048708Causes of climate change are global international cooperation neededrArrndash 1048708Near-term concentrated costs long-term future benefitsndash 1048708Although agreeing on research and coordination of efforts hard to agree on

whether and how much to restrict greenhouse gases

Some reasonsndash 1048708Free-riding incentivesndash 1048708Conflicting interests (eg oil-exporting countries might oppose reductions)

bull 1048708Differing Responsibility 1048708five countries (USA China Russia Saudi-Arabia Canada) produce more than half of worldrsquos carbon

bull 1048708five countries (USA China Russia Japan India) consume account for more than 50 of carbon consumption

bull 1048708Industrialized countries have contributed the majority of historical emissionsbull 1048708Per-capita emissions in developing countries much smaller

International Policy Considerations

bull Different optionsndash Formal treaties (binding under international law) or

less rigorous nonbinding agreementsndash From modest commitments to share information to

agreements on restrictions of emissions and penalties

bull Underlying difficultyndash Design the agreement such that every party benefits

and has no incentive to drop out

International Cooperation on Climate Change

The timeline1988

bull United Nations General Assembly adopted resolution urging the lsquoprotection of global climate for present and future generationsrsquo

bull IPCC established by UNEP

1990 2ndWorld Climate Conference launches negotiations on convention on climate change

1992 UNFCCC opened for signature at Rio de Janeiro Earth Summit entered into force in 1994

From UNFCCC to Kyotobull UN Framework Convention (UNFCCC) hellip

Parties meet regularly (COP-Conference Of the Parties) to foster and monitor implementation and continue talks on how to address climate change (leading to Kyoto)

Negotiating blocksndash Association of Small Island States (AOSIS)

bull Threatened with submersion by global warming

ndash G77 + Chinabull Want developed countries to take the lead in reducing

ndash European Unionbull Willing to make early reductions

ndash US + Japan + Australia + New Zealandbull Higher fossil fuel dependencebull Reluctant to commit

ndash Russiabull Economic slowdown gives ldquosurplusrdquo

From UNFCCC to Kyoto

hellipto Kyotondash Berlin Mandate (COP1) initiated talks on

commitments for industrialized countriesndash Kyoto (COP3) protocol outlined legally binding

commitmentsndash COP4-COP7 How should details of the Kyoto

protocol be designed in order to make ratification possible (55 of the countries and emissions needed)

ndash 2001 USA withdraw from Kyoto protocolndash 2001 Remaining countries reach compromisendash Kyoto protocol enters into force February 16th 2005

UNFCCC

Objectiveldquoto achieve stabilization of atmospheric

concentrations of greenhouse gases at levels that would prevent dangerous anthropogenic (human- induced) interference with the climate systemhelliprdquo

not defined what levels might be ldquodangerousrdquo butndash ecosystems should be allowed to adapt naturallyndash food supply should not be threatenedndash economic development should be able to proceed in a

sustainable manner

UNFCCC

Distribute the burdensndash principles of ldquoequityrdquo and ldquocommon but differentiated responsibilitiesrdquo1048708

bull industrialized countries have historically contributed the most to the problem and have more resources to address it

bull developing countries are more vulnerable to its adverse effects while having a lower capacity to respond

ndash industrialized countries to take the lead 1048708bull by modifying their long-term emission trendsbull by providing financial and technological resources to help developing

countries

Deal with uncertaintyndash 1048708Precautionary principle

ldquowhere there are threats of serious or irreversible damage lack of full scientific certainty should not be used as a reason for postponing such measuresrdquo

UNFCCC

Non-Annex I partiesndash mostly developing countries

All parties to the conventionndash Greenhouse gas inventoryndash National communications on actions on climate policy

bull 1048708Mitigation measuresbull 1048708Provisions for developing countriesbull 1048708Preparations to adaptbull 1048708Research plans education and public awareness

UNFCCC

bull GEF ndash Global Environment Facilityndash 1048708Operates the financial mechanismsndash 1048708Channels money to developing countriesndash 1048708Was established 1991 (WorldBank UNEP UNDP)ndash 1048708Not only climate change but also biodiversity ozone layer

international watersndash 1048708COP provides policy guidance to GEF

bull IPCC ndash Intergovernmental Panel on Climate Changendash 1048708Source of informationndash 1048708Publishes comprehensive reports on the current state of

climate change research (scientific social economic) mitigation and adaptation

Involvement of developing countries

Vulnerability to the impacts of climate changendash Data collection and research into (and monitoring of) climate

change impactsndash Assessment of vulnerability and of adaptation optionsndash Capacity-buildingndash Improving early warning systems for rapid response to extreme

weather eventsndash Starting to implement adaptation measures where appropriate

Response measuresndash Promoting investment for economic diversificationndash Developing and transferring more climate-friendly technologiesndash Expanding the use of climate-friendly energy sources ndash Capacity-building

Kyoto ProtocolCommitments1048708

ndash legally binding emissions targetsndash Minus 5 from 1990 levels in 2008-2012ndash Annex I parties have individual targets listed in Annex B

bull EU-15 Bulgaria Czech Republic Estonia Latvia Liechtenstein Lithuania Monaco Romania Slovakia Slovenia Switzerland -8

bull US -7bull Canada Hungary Japan Poland -6bull New Zealand Russian Federation Ukraine 0bull Norway +1bull Australia +8bull Iceland +10

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

International CooperationProblem

ndash 1048708Causes of climate change are global international cooperation neededrArrndash 1048708Near-term concentrated costs long-term future benefitsndash 1048708Although agreeing on research and coordination of efforts hard to agree on

whether and how much to restrict greenhouse gases

Some reasonsndash 1048708Free-riding incentivesndash 1048708Conflicting interests (eg oil-exporting countries might oppose reductions)

bull 1048708Differing Responsibility 1048708five countries (USA China Russia Saudi-Arabia Canada) produce more than half of worldrsquos carbon

bull 1048708five countries (USA China Russia Japan India) consume account for more than 50 of carbon consumption

bull 1048708Industrialized countries have contributed the majority of historical emissionsbull 1048708Per-capita emissions in developing countries much smaller

International Policy Considerations

bull Different optionsndash Formal treaties (binding under international law) or

less rigorous nonbinding agreementsndash From modest commitments to share information to

agreements on restrictions of emissions and penalties

bull Underlying difficultyndash Design the agreement such that every party benefits

and has no incentive to drop out

International Cooperation on Climate Change

The timeline1988

bull United Nations General Assembly adopted resolution urging the lsquoprotection of global climate for present and future generationsrsquo

bull IPCC established by UNEP

1990 2ndWorld Climate Conference launches negotiations on convention on climate change

1992 UNFCCC opened for signature at Rio de Janeiro Earth Summit entered into force in 1994

From UNFCCC to Kyotobull UN Framework Convention (UNFCCC) hellip

Parties meet regularly (COP-Conference Of the Parties) to foster and monitor implementation and continue talks on how to address climate change (leading to Kyoto)

Negotiating blocksndash Association of Small Island States (AOSIS)

bull Threatened with submersion by global warming

ndash G77 + Chinabull Want developed countries to take the lead in reducing

ndash European Unionbull Willing to make early reductions

ndash US + Japan + Australia + New Zealandbull Higher fossil fuel dependencebull Reluctant to commit

ndash Russiabull Economic slowdown gives ldquosurplusrdquo

From UNFCCC to Kyoto

hellipto Kyotondash Berlin Mandate (COP1) initiated talks on

commitments for industrialized countriesndash Kyoto (COP3) protocol outlined legally binding

commitmentsndash COP4-COP7 How should details of the Kyoto

protocol be designed in order to make ratification possible (55 of the countries and emissions needed)

ndash 2001 USA withdraw from Kyoto protocolndash 2001 Remaining countries reach compromisendash Kyoto protocol enters into force February 16th 2005

UNFCCC

Objectiveldquoto achieve stabilization of atmospheric

concentrations of greenhouse gases at levels that would prevent dangerous anthropogenic (human- induced) interference with the climate systemhelliprdquo

not defined what levels might be ldquodangerousrdquo butndash ecosystems should be allowed to adapt naturallyndash food supply should not be threatenedndash economic development should be able to proceed in a

sustainable manner

UNFCCC

Distribute the burdensndash principles of ldquoequityrdquo and ldquocommon but differentiated responsibilitiesrdquo1048708

bull industrialized countries have historically contributed the most to the problem and have more resources to address it

bull developing countries are more vulnerable to its adverse effects while having a lower capacity to respond

ndash industrialized countries to take the lead 1048708bull by modifying their long-term emission trendsbull by providing financial and technological resources to help developing

countries

Deal with uncertaintyndash 1048708Precautionary principle

ldquowhere there are threats of serious or irreversible damage lack of full scientific certainty should not be used as a reason for postponing such measuresrdquo

UNFCCC

Non-Annex I partiesndash mostly developing countries

All parties to the conventionndash Greenhouse gas inventoryndash National communications on actions on climate policy

bull 1048708Mitigation measuresbull 1048708Provisions for developing countriesbull 1048708Preparations to adaptbull 1048708Research plans education and public awareness

UNFCCC

bull GEF ndash Global Environment Facilityndash 1048708Operates the financial mechanismsndash 1048708Channels money to developing countriesndash 1048708Was established 1991 (WorldBank UNEP UNDP)ndash 1048708Not only climate change but also biodiversity ozone layer

international watersndash 1048708COP provides policy guidance to GEF

bull IPCC ndash Intergovernmental Panel on Climate Changendash 1048708Source of informationndash 1048708Publishes comprehensive reports on the current state of

climate change research (scientific social economic) mitigation and adaptation

Involvement of developing countries

Vulnerability to the impacts of climate changendash Data collection and research into (and monitoring of) climate

change impactsndash Assessment of vulnerability and of adaptation optionsndash Capacity-buildingndash Improving early warning systems for rapid response to extreme

weather eventsndash Starting to implement adaptation measures where appropriate

Response measuresndash Promoting investment for economic diversificationndash Developing and transferring more climate-friendly technologiesndash Expanding the use of climate-friendly energy sources ndash Capacity-building

Kyoto ProtocolCommitments1048708

ndash legally binding emissions targetsndash Minus 5 from 1990 levels in 2008-2012ndash Annex I parties have individual targets listed in Annex B

bull EU-15 Bulgaria Czech Republic Estonia Latvia Liechtenstein Lithuania Monaco Romania Slovakia Slovenia Switzerland -8

bull US -7bull Canada Hungary Japan Poland -6bull New Zealand Russian Federation Ukraine 0bull Norway +1bull Australia +8bull Iceland +10

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

International Policy Considerations

bull Different optionsndash Formal treaties (binding under international law) or

less rigorous nonbinding agreementsndash From modest commitments to share information to

agreements on restrictions of emissions and penalties

bull Underlying difficultyndash Design the agreement such that every party benefits

and has no incentive to drop out

International Cooperation on Climate Change

The timeline1988

bull United Nations General Assembly adopted resolution urging the lsquoprotection of global climate for present and future generationsrsquo

bull IPCC established by UNEP

1990 2ndWorld Climate Conference launches negotiations on convention on climate change

1992 UNFCCC opened for signature at Rio de Janeiro Earth Summit entered into force in 1994

From UNFCCC to Kyotobull UN Framework Convention (UNFCCC) hellip

Parties meet regularly (COP-Conference Of the Parties) to foster and monitor implementation and continue talks on how to address climate change (leading to Kyoto)

Negotiating blocksndash Association of Small Island States (AOSIS)

bull Threatened with submersion by global warming

ndash G77 + Chinabull Want developed countries to take the lead in reducing

ndash European Unionbull Willing to make early reductions

ndash US + Japan + Australia + New Zealandbull Higher fossil fuel dependencebull Reluctant to commit

ndash Russiabull Economic slowdown gives ldquosurplusrdquo

From UNFCCC to Kyoto

hellipto Kyotondash Berlin Mandate (COP1) initiated talks on

commitments for industrialized countriesndash Kyoto (COP3) protocol outlined legally binding

commitmentsndash COP4-COP7 How should details of the Kyoto

protocol be designed in order to make ratification possible (55 of the countries and emissions needed)

ndash 2001 USA withdraw from Kyoto protocolndash 2001 Remaining countries reach compromisendash Kyoto protocol enters into force February 16th 2005

UNFCCC

Objectiveldquoto achieve stabilization of atmospheric

concentrations of greenhouse gases at levels that would prevent dangerous anthropogenic (human- induced) interference with the climate systemhelliprdquo

not defined what levels might be ldquodangerousrdquo butndash ecosystems should be allowed to adapt naturallyndash food supply should not be threatenedndash economic development should be able to proceed in a

sustainable manner

UNFCCC

Distribute the burdensndash principles of ldquoequityrdquo and ldquocommon but differentiated responsibilitiesrdquo1048708

bull industrialized countries have historically contributed the most to the problem and have more resources to address it

bull developing countries are more vulnerable to its adverse effects while having a lower capacity to respond

ndash industrialized countries to take the lead 1048708bull by modifying their long-term emission trendsbull by providing financial and technological resources to help developing

countries

Deal with uncertaintyndash 1048708Precautionary principle

ldquowhere there are threats of serious or irreversible damage lack of full scientific certainty should not be used as a reason for postponing such measuresrdquo

UNFCCC

Non-Annex I partiesndash mostly developing countries

All parties to the conventionndash Greenhouse gas inventoryndash National communications on actions on climate policy

bull 1048708Mitigation measuresbull 1048708Provisions for developing countriesbull 1048708Preparations to adaptbull 1048708Research plans education and public awareness

UNFCCC

bull GEF ndash Global Environment Facilityndash 1048708Operates the financial mechanismsndash 1048708Channels money to developing countriesndash 1048708Was established 1991 (WorldBank UNEP UNDP)ndash 1048708Not only climate change but also biodiversity ozone layer

international watersndash 1048708COP provides policy guidance to GEF

bull IPCC ndash Intergovernmental Panel on Climate Changendash 1048708Source of informationndash 1048708Publishes comprehensive reports on the current state of

climate change research (scientific social economic) mitigation and adaptation

Involvement of developing countries

Vulnerability to the impacts of climate changendash Data collection and research into (and monitoring of) climate

change impactsndash Assessment of vulnerability and of adaptation optionsndash Capacity-buildingndash Improving early warning systems for rapid response to extreme

weather eventsndash Starting to implement adaptation measures where appropriate

Response measuresndash Promoting investment for economic diversificationndash Developing and transferring more climate-friendly technologiesndash Expanding the use of climate-friendly energy sources ndash Capacity-building

Kyoto ProtocolCommitments1048708

ndash legally binding emissions targetsndash Minus 5 from 1990 levels in 2008-2012ndash Annex I parties have individual targets listed in Annex B

bull EU-15 Bulgaria Czech Republic Estonia Latvia Liechtenstein Lithuania Monaco Romania Slovakia Slovenia Switzerland -8

bull US -7bull Canada Hungary Japan Poland -6bull New Zealand Russian Federation Ukraine 0bull Norway +1bull Australia +8bull Iceland +10

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

International Cooperation on Climate Change

The timeline1988

bull United Nations General Assembly adopted resolution urging the lsquoprotection of global climate for present and future generationsrsquo

bull IPCC established by UNEP

1990 2ndWorld Climate Conference launches negotiations on convention on climate change

1992 UNFCCC opened for signature at Rio de Janeiro Earth Summit entered into force in 1994

From UNFCCC to Kyotobull UN Framework Convention (UNFCCC) hellip

Parties meet regularly (COP-Conference Of the Parties) to foster and monitor implementation and continue talks on how to address climate change (leading to Kyoto)

Negotiating blocksndash Association of Small Island States (AOSIS)

bull Threatened with submersion by global warming

ndash G77 + Chinabull Want developed countries to take the lead in reducing

ndash European Unionbull Willing to make early reductions

ndash US + Japan + Australia + New Zealandbull Higher fossil fuel dependencebull Reluctant to commit

ndash Russiabull Economic slowdown gives ldquosurplusrdquo

From UNFCCC to Kyoto

hellipto Kyotondash Berlin Mandate (COP1) initiated talks on

commitments for industrialized countriesndash Kyoto (COP3) protocol outlined legally binding

commitmentsndash COP4-COP7 How should details of the Kyoto

protocol be designed in order to make ratification possible (55 of the countries and emissions needed)

ndash 2001 USA withdraw from Kyoto protocolndash 2001 Remaining countries reach compromisendash Kyoto protocol enters into force February 16th 2005

UNFCCC

Objectiveldquoto achieve stabilization of atmospheric

concentrations of greenhouse gases at levels that would prevent dangerous anthropogenic (human- induced) interference with the climate systemhelliprdquo

not defined what levels might be ldquodangerousrdquo butndash ecosystems should be allowed to adapt naturallyndash food supply should not be threatenedndash economic development should be able to proceed in a

sustainable manner

UNFCCC

Distribute the burdensndash principles of ldquoequityrdquo and ldquocommon but differentiated responsibilitiesrdquo1048708

bull industrialized countries have historically contributed the most to the problem and have more resources to address it

bull developing countries are more vulnerable to its adverse effects while having a lower capacity to respond

ndash industrialized countries to take the lead 1048708bull by modifying their long-term emission trendsbull by providing financial and technological resources to help developing

countries

Deal with uncertaintyndash 1048708Precautionary principle

ldquowhere there are threats of serious or irreversible damage lack of full scientific certainty should not be used as a reason for postponing such measuresrdquo

UNFCCC

Non-Annex I partiesndash mostly developing countries

All parties to the conventionndash Greenhouse gas inventoryndash National communications on actions on climate policy

bull 1048708Mitigation measuresbull 1048708Provisions for developing countriesbull 1048708Preparations to adaptbull 1048708Research plans education and public awareness

UNFCCC

bull GEF ndash Global Environment Facilityndash 1048708Operates the financial mechanismsndash 1048708Channels money to developing countriesndash 1048708Was established 1991 (WorldBank UNEP UNDP)ndash 1048708Not only climate change but also biodiversity ozone layer

international watersndash 1048708COP provides policy guidance to GEF

bull IPCC ndash Intergovernmental Panel on Climate Changendash 1048708Source of informationndash 1048708Publishes comprehensive reports on the current state of

climate change research (scientific social economic) mitigation and adaptation

Involvement of developing countries

Vulnerability to the impacts of climate changendash Data collection and research into (and monitoring of) climate

change impactsndash Assessment of vulnerability and of adaptation optionsndash Capacity-buildingndash Improving early warning systems for rapid response to extreme

weather eventsndash Starting to implement adaptation measures where appropriate

Response measuresndash Promoting investment for economic diversificationndash Developing and transferring more climate-friendly technologiesndash Expanding the use of climate-friendly energy sources ndash Capacity-building

Kyoto ProtocolCommitments1048708

ndash legally binding emissions targetsndash Minus 5 from 1990 levels in 2008-2012ndash Annex I parties have individual targets listed in Annex B

bull EU-15 Bulgaria Czech Republic Estonia Latvia Liechtenstein Lithuania Monaco Romania Slovakia Slovenia Switzerland -8

bull US -7bull Canada Hungary Japan Poland -6bull New Zealand Russian Federation Ukraine 0bull Norway +1bull Australia +8bull Iceland +10

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

From UNFCCC to Kyotobull UN Framework Convention (UNFCCC) hellip

Parties meet regularly (COP-Conference Of the Parties) to foster and monitor implementation and continue talks on how to address climate change (leading to Kyoto)

Negotiating blocksndash Association of Small Island States (AOSIS)

bull Threatened with submersion by global warming

ndash G77 + Chinabull Want developed countries to take the lead in reducing

ndash European Unionbull Willing to make early reductions

ndash US + Japan + Australia + New Zealandbull Higher fossil fuel dependencebull Reluctant to commit

ndash Russiabull Economic slowdown gives ldquosurplusrdquo

From UNFCCC to Kyoto

hellipto Kyotondash Berlin Mandate (COP1) initiated talks on

commitments for industrialized countriesndash Kyoto (COP3) protocol outlined legally binding

commitmentsndash COP4-COP7 How should details of the Kyoto

protocol be designed in order to make ratification possible (55 of the countries and emissions needed)

ndash 2001 USA withdraw from Kyoto protocolndash 2001 Remaining countries reach compromisendash Kyoto protocol enters into force February 16th 2005

UNFCCC

Objectiveldquoto achieve stabilization of atmospheric

concentrations of greenhouse gases at levels that would prevent dangerous anthropogenic (human- induced) interference with the climate systemhelliprdquo

not defined what levels might be ldquodangerousrdquo butndash ecosystems should be allowed to adapt naturallyndash food supply should not be threatenedndash economic development should be able to proceed in a

sustainable manner

UNFCCC

Distribute the burdensndash principles of ldquoequityrdquo and ldquocommon but differentiated responsibilitiesrdquo1048708

bull industrialized countries have historically contributed the most to the problem and have more resources to address it

bull developing countries are more vulnerable to its adverse effects while having a lower capacity to respond

ndash industrialized countries to take the lead 1048708bull by modifying their long-term emission trendsbull by providing financial and technological resources to help developing

countries

Deal with uncertaintyndash 1048708Precautionary principle

ldquowhere there are threats of serious or irreversible damage lack of full scientific certainty should not be used as a reason for postponing such measuresrdquo

UNFCCC

Non-Annex I partiesndash mostly developing countries

All parties to the conventionndash Greenhouse gas inventoryndash National communications on actions on climate policy

bull 1048708Mitigation measuresbull 1048708Provisions for developing countriesbull 1048708Preparations to adaptbull 1048708Research plans education and public awareness

UNFCCC

bull GEF ndash Global Environment Facilityndash 1048708Operates the financial mechanismsndash 1048708Channels money to developing countriesndash 1048708Was established 1991 (WorldBank UNEP UNDP)ndash 1048708Not only climate change but also biodiversity ozone layer

international watersndash 1048708COP provides policy guidance to GEF

bull IPCC ndash Intergovernmental Panel on Climate Changendash 1048708Source of informationndash 1048708Publishes comprehensive reports on the current state of

climate change research (scientific social economic) mitigation and adaptation

Involvement of developing countries

Vulnerability to the impacts of climate changendash Data collection and research into (and monitoring of) climate

change impactsndash Assessment of vulnerability and of adaptation optionsndash Capacity-buildingndash Improving early warning systems for rapid response to extreme

weather eventsndash Starting to implement adaptation measures where appropriate

Response measuresndash Promoting investment for economic diversificationndash Developing and transferring more climate-friendly technologiesndash Expanding the use of climate-friendly energy sources ndash Capacity-building

Kyoto ProtocolCommitments1048708

ndash legally binding emissions targetsndash Minus 5 from 1990 levels in 2008-2012ndash Annex I parties have individual targets listed in Annex B

bull EU-15 Bulgaria Czech Republic Estonia Latvia Liechtenstein Lithuania Monaco Romania Slovakia Slovenia Switzerland -8

bull US -7bull Canada Hungary Japan Poland -6bull New Zealand Russian Federation Ukraine 0bull Norway +1bull Australia +8bull Iceland +10

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

From UNFCCC to Kyoto

hellipto Kyotondash Berlin Mandate (COP1) initiated talks on

commitments for industrialized countriesndash Kyoto (COP3) protocol outlined legally binding

commitmentsndash COP4-COP7 How should details of the Kyoto

protocol be designed in order to make ratification possible (55 of the countries and emissions needed)

ndash 2001 USA withdraw from Kyoto protocolndash 2001 Remaining countries reach compromisendash Kyoto protocol enters into force February 16th 2005

UNFCCC

Objectiveldquoto achieve stabilization of atmospheric

concentrations of greenhouse gases at levels that would prevent dangerous anthropogenic (human- induced) interference with the climate systemhelliprdquo

not defined what levels might be ldquodangerousrdquo butndash ecosystems should be allowed to adapt naturallyndash food supply should not be threatenedndash economic development should be able to proceed in a

sustainable manner

UNFCCC

Distribute the burdensndash principles of ldquoequityrdquo and ldquocommon but differentiated responsibilitiesrdquo1048708

bull industrialized countries have historically contributed the most to the problem and have more resources to address it

bull developing countries are more vulnerable to its adverse effects while having a lower capacity to respond

ndash industrialized countries to take the lead 1048708bull by modifying their long-term emission trendsbull by providing financial and technological resources to help developing

countries

Deal with uncertaintyndash 1048708Precautionary principle

ldquowhere there are threats of serious or irreversible damage lack of full scientific certainty should not be used as a reason for postponing such measuresrdquo

UNFCCC

Non-Annex I partiesndash mostly developing countries

All parties to the conventionndash Greenhouse gas inventoryndash National communications on actions on climate policy

bull 1048708Mitigation measuresbull 1048708Provisions for developing countriesbull 1048708Preparations to adaptbull 1048708Research plans education and public awareness

UNFCCC

bull GEF ndash Global Environment Facilityndash 1048708Operates the financial mechanismsndash 1048708Channels money to developing countriesndash 1048708Was established 1991 (WorldBank UNEP UNDP)ndash 1048708Not only climate change but also biodiversity ozone layer

international watersndash 1048708COP provides policy guidance to GEF

bull IPCC ndash Intergovernmental Panel on Climate Changendash 1048708Source of informationndash 1048708Publishes comprehensive reports on the current state of

climate change research (scientific social economic) mitigation and adaptation

Involvement of developing countries

Vulnerability to the impacts of climate changendash Data collection and research into (and monitoring of) climate

change impactsndash Assessment of vulnerability and of adaptation optionsndash Capacity-buildingndash Improving early warning systems for rapid response to extreme

weather eventsndash Starting to implement adaptation measures where appropriate

Response measuresndash Promoting investment for economic diversificationndash Developing and transferring more climate-friendly technologiesndash Expanding the use of climate-friendly energy sources ndash Capacity-building

Kyoto ProtocolCommitments1048708

ndash legally binding emissions targetsndash Minus 5 from 1990 levels in 2008-2012ndash Annex I parties have individual targets listed in Annex B

bull EU-15 Bulgaria Czech Republic Estonia Latvia Liechtenstein Lithuania Monaco Romania Slovakia Slovenia Switzerland -8

bull US -7bull Canada Hungary Japan Poland -6bull New Zealand Russian Federation Ukraine 0bull Norway +1bull Australia +8bull Iceland +10

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

UNFCCC

Objectiveldquoto achieve stabilization of atmospheric

concentrations of greenhouse gases at levels that would prevent dangerous anthropogenic (human- induced) interference with the climate systemhelliprdquo

not defined what levels might be ldquodangerousrdquo butndash ecosystems should be allowed to adapt naturallyndash food supply should not be threatenedndash economic development should be able to proceed in a

sustainable manner

UNFCCC

Distribute the burdensndash principles of ldquoequityrdquo and ldquocommon but differentiated responsibilitiesrdquo1048708

bull industrialized countries have historically contributed the most to the problem and have more resources to address it

bull developing countries are more vulnerable to its adverse effects while having a lower capacity to respond

ndash industrialized countries to take the lead 1048708bull by modifying their long-term emission trendsbull by providing financial and technological resources to help developing

countries

Deal with uncertaintyndash 1048708Precautionary principle

ldquowhere there are threats of serious or irreversible damage lack of full scientific certainty should not be used as a reason for postponing such measuresrdquo

UNFCCC

Non-Annex I partiesndash mostly developing countries

All parties to the conventionndash Greenhouse gas inventoryndash National communications on actions on climate policy

bull 1048708Mitigation measuresbull 1048708Provisions for developing countriesbull 1048708Preparations to adaptbull 1048708Research plans education and public awareness

UNFCCC

bull GEF ndash Global Environment Facilityndash 1048708Operates the financial mechanismsndash 1048708Channels money to developing countriesndash 1048708Was established 1991 (WorldBank UNEP UNDP)ndash 1048708Not only climate change but also biodiversity ozone layer

international watersndash 1048708COP provides policy guidance to GEF

bull IPCC ndash Intergovernmental Panel on Climate Changendash 1048708Source of informationndash 1048708Publishes comprehensive reports on the current state of

climate change research (scientific social economic) mitigation and adaptation

Involvement of developing countries

Vulnerability to the impacts of climate changendash Data collection and research into (and monitoring of) climate

change impactsndash Assessment of vulnerability and of adaptation optionsndash Capacity-buildingndash Improving early warning systems for rapid response to extreme

weather eventsndash Starting to implement adaptation measures where appropriate

Response measuresndash Promoting investment for economic diversificationndash Developing and transferring more climate-friendly technologiesndash Expanding the use of climate-friendly energy sources ndash Capacity-building

Kyoto ProtocolCommitments1048708

ndash legally binding emissions targetsndash Minus 5 from 1990 levels in 2008-2012ndash Annex I parties have individual targets listed in Annex B

bull EU-15 Bulgaria Czech Republic Estonia Latvia Liechtenstein Lithuania Monaco Romania Slovakia Slovenia Switzerland -8

bull US -7bull Canada Hungary Japan Poland -6bull New Zealand Russian Federation Ukraine 0bull Norway +1bull Australia +8bull Iceland +10

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

UNFCCC

Distribute the burdensndash principles of ldquoequityrdquo and ldquocommon but differentiated responsibilitiesrdquo1048708

bull industrialized countries have historically contributed the most to the problem and have more resources to address it

bull developing countries are more vulnerable to its adverse effects while having a lower capacity to respond

ndash industrialized countries to take the lead 1048708bull by modifying their long-term emission trendsbull by providing financial and technological resources to help developing

countries

Deal with uncertaintyndash 1048708Precautionary principle

ldquowhere there are threats of serious or irreversible damage lack of full scientific certainty should not be used as a reason for postponing such measuresrdquo

UNFCCC

Non-Annex I partiesndash mostly developing countries

All parties to the conventionndash Greenhouse gas inventoryndash National communications on actions on climate policy

bull 1048708Mitigation measuresbull 1048708Provisions for developing countriesbull 1048708Preparations to adaptbull 1048708Research plans education and public awareness

UNFCCC

bull GEF ndash Global Environment Facilityndash 1048708Operates the financial mechanismsndash 1048708Channels money to developing countriesndash 1048708Was established 1991 (WorldBank UNEP UNDP)ndash 1048708Not only climate change but also biodiversity ozone layer

international watersndash 1048708COP provides policy guidance to GEF

bull IPCC ndash Intergovernmental Panel on Climate Changendash 1048708Source of informationndash 1048708Publishes comprehensive reports on the current state of

climate change research (scientific social economic) mitigation and adaptation

Involvement of developing countries

Vulnerability to the impacts of climate changendash Data collection and research into (and monitoring of) climate

change impactsndash Assessment of vulnerability and of adaptation optionsndash Capacity-buildingndash Improving early warning systems for rapid response to extreme

weather eventsndash Starting to implement adaptation measures where appropriate

Response measuresndash Promoting investment for economic diversificationndash Developing and transferring more climate-friendly technologiesndash Expanding the use of climate-friendly energy sources ndash Capacity-building

Kyoto ProtocolCommitments1048708

ndash legally binding emissions targetsndash Minus 5 from 1990 levels in 2008-2012ndash Annex I parties have individual targets listed in Annex B

bull EU-15 Bulgaria Czech Republic Estonia Latvia Liechtenstein Lithuania Monaco Romania Slovakia Slovenia Switzerland -8

bull US -7bull Canada Hungary Japan Poland -6bull New Zealand Russian Federation Ukraine 0bull Norway +1bull Australia +8bull Iceland +10

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

UNFCCC

Non-Annex I partiesndash mostly developing countries

All parties to the conventionndash Greenhouse gas inventoryndash National communications on actions on climate policy

bull 1048708Mitigation measuresbull 1048708Provisions for developing countriesbull 1048708Preparations to adaptbull 1048708Research plans education and public awareness

UNFCCC

bull GEF ndash Global Environment Facilityndash 1048708Operates the financial mechanismsndash 1048708Channels money to developing countriesndash 1048708Was established 1991 (WorldBank UNEP UNDP)ndash 1048708Not only climate change but also biodiversity ozone layer

international watersndash 1048708COP provides policy guidance to GEF

bull IPCC ndash Intergovernmental Panel on Climate Changendash 1048708Source of informationndash 1048708Publishes comprehensive reports on the current state of

climate change research (scientific social economic) mitigation and adaptation

Involvement of developing countries

Vulnerability to the impacts of climate changendash Data collection and research into (and monitoring of) climate

change impactsndash Assessment of vulnerability and of adaptation optionsndash Capacity-buildingndash Improving early warning systems for rapid response to extreme

weather eventsndash Starting to implement adaptation measures where appropriate

Response measuresndash Promoting investment for economic diversificationndash Developing and transferring more climate-friendly technologiesndash Expanding the use of climate-friendly energy sources ndash Capacity-building

Kyoto ProtocolCommitments1048708

ndash legally binding emissions targetsndash Minus 5 from 1990 levels in 2008-2012ndash Annex I parties have individual targets listed in Annex B

bull EU-15 Bulgaria Czech Republic Estonia Latvia Liechtenstein Lithuania Monaco Romania Slovakia Slovenia Switzerland -8

bull US -7bull Canada Hungary Japan Poland -6bull New Zealand Russian Federation Ukraine 0bull Norway +1bull Australia +8bull Iceland +10

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

UNFCCC

bull GEF ndash Global Environment Facilityndash 1048708Operates the financial mechanismsndash 1048708Channels money to developing countriesndash 1048708Was established 1991 (WorldBank UNEP UNDP)ndash 1048708Not only climate change but also biodiversity ozone layer

international watersndash 1048708COP provides policy guidance to GEF

bull IPCC ndash Intergovernmental Panel on Climate Changendash 1048708Source of informationndash 1048708Publishes comprehensive reports on the current state of

climate change research (scientific social economic) mitigation and adaptation

Involvement of developing countries

Vulnerability to the impacts of climate changendash Data collection and research into (and monitoring of) climate

change impactsndash Assessment of vulnerability and of adaptation optionsndash Capacity-buildingndash Improving early warning systems for rapid response to extreme

weather eventsndash Starting to implement adaptation measures where appropriate

Response measuresndash Promoting investment for economic diversificationndash Developing and transferring more climate-friendly technologiesndash Expanding the use of climate-friendly energy sources ndash Capacity-building

Kyoto ProtocolCommitments1048708

ndash legally binding emissions targetsndash Minus 5 from 1990 levels in 2008-2012ndash Annex I parties have individual targets listed in Annex B

bull EU-15 Bulgaria Czech Republic Estonia Latvia Liechtenstein Lithuania Monaco Romania Slovakia Slovenia Switzerland -8

bull US -7bull Canada Hungary Japan Poland -6bull New Zealand Russian Federation Ukraine 0bull Norway +1bull Australia +8bull Iceland +10

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Involvement of developing countries

Vulnerability to the impacts of climate changendash Data collection and research into (and monitoring of) climate

change impactsndash Assessment of vulnerability and of adaptation optionsndash Capacity-buildingndash Improving early warning systems for rapid response to extreme

weather eventsndash Starting to implement adaptation measures where appropriate

Response measuresndash Promoting investment for economic diversificationndash Developing and transferring more climate-friendly technologiesndash Expanding the use of climate-friendly energy sources ndash Capacity-building

Kyoto ProtocolCommitments1048708

ndash legally binding emissions targetsndash Minus 5 from 1990 levels in 2008-2012ndash Annex I parties have individual targets listed in Annex B

bull EU-15 Bulgaria Czech Republic Estonia Latvia Liechtenstein Lithuania Monaco Romania Slovakia Slovenia Switzerland -8

bull US -7bull Canada Hungary Japan Poland -6bull New Zealand Russian Federation Ukraine 0bull Norway +1bull Australia +8bull Iceland +10

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Kyoto ProtocolCommitments1048708

ndash legally binding emissions targetsndash Minus 5 from 1990 levels in 2008-2012ndash Annex I parties have individual targets listed in Annex B

bull EU-15 Bulgaria Czech Republic Estonia Latvia Liechtenstein Lithuania Monaco Romania Slovakia Slovenia Switzerland -8

bull US -7bull Canada Hungary Japan Poland -6bull New Zealand Russian Federation Ukraine 0bull Norway +1bull Australia +8bull Iceland +10

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Implementation mechanismsEmissions trading (Article 17)1048708

ndash industrialized countries are allowed to buysell excess emissions credits among themselves

Joint implementation (Article 6)1048708ndash industrialized countries can cooperatively implement projects to reduce

greenhouse gas emissionsndash investor from one country receives emissions credits equal to the amount of

emission reduction as a result of the projectndash recipient country would receive new technology

Clean development mechanisms (Article 12)1048708ndash Goal to promote sustainable development in developing countriesndash Allows industrialized countries to earn emissions credits from their investments in

emission-reducing projects in developing countriesndash Requires verification that the greenhouse gas emissions reductions are real

measurable and additional to what would have occurred in the absence of project

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Implementation mechanismsbull Accounting of greenhouse gas emissions in national registries bull Different names for emissions1048708

ndash Based on their commitment parties receive assigned amount units (AAUs)

ndash Joint implementation projects result in emission reduction units (ERUs)

ndash CDM projects generate certified emission reductions (CERs)ndash removal units (RMUs) are generated through sink activities in the

LULUCF sectorbull Effective emissions tradingbull parties may exchange AAUs CERs and ERUs as well as RMUsbull each of these units equates to one ton of carbon dioxide equivalent

(calculated using the Global Warming Potential index)

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Some thoughts on the costs of the protocol

Why did the US withdraw from the Kyoto negotiationsndash Dispute between EU and US on the use of flexibility mechanismsndash Substantial costs for US predictedndash No obligations for developing countriesndash ByrdHagel resolution in Senate (1997) 1048708

bull ldquothe United States should not be a signatory to any protocol to or other agreement regarding the United Nations Framework Convention on Climate Change of 1992 at negotiations in Kyoto in December 1997 or thereafter which would

bull (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period or

bull (B) would result in serious harm to the economy of the United Statesrdquo

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Some thoughts on the costs of the protocol

bull After withdrawal of US new negotiations in BonnMarrakesh lead to agreement on use of flexibility mechanisms

bull Implementation issues even more liberal than originally advocated by US ndash Substantial reduction in costsndash Substantially less effective in reducing

emissionsbull Entry into force 2005

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Marrakesh ndash agreement on final issues

Transferability and bankability of creditsndash Emission credits from sinks projects under Art 33 (forestry

management) and Art 34 (agriculture) will be labelled as removal units (RMUs) Those RMUs cannot be used for banking into the 2nd commitment period but swapping between RMUs and AAUsCERsERUs is allowed

ndash Assigned amount units (AAUs) RMUs andor credits from JI (ERUs) and CDM (CERs) can be used for complying with the Kyoto emission reduction target

ndash Transfers of AAUs ERUs CERs and RMUs between Annex I Parties is unrestricted

ndash AAUs may be carried over without restrictions into the 2nd commitment period ERUs and CERs can each be banked only up to a limit of 25 of the initial assigned amount

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Marrakesh ndash agreement on final issues

bull Compliance Rules for penalty and enforcementbull Minimizing Adverse Effects New funding sourcesbull Postponed Review of Commitmentsbull New Funds

ndash Climate Change Fund1048708bull ldquocomplementary tordquo GEF Climate Change fundingbull Adaptation Technology Transfer Econ Diversificationbull Sectors energy transport industry agriculture forestry waste

management

ndash Least-Developed Countries Fund1048708bull Adaptation

bull Additional GEF multilateral bilateral fundingbull For capacity building in LDCs and EITs

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

CDM

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

CDM

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

CDM

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Project Cycle

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Baselines

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Baseline approachesbull New baseline methodologies use one of the three approaches

ndash Existing actual or historical emissions as applicable ndash Emissions from a technology that represents an economically attractive

course of action taking into account barriers to investmentndash Average emission of similar projects activities undertaken in the

previous 5 years in similar circumstances and whose performance is among the top 20 of their category

bull The baseline scenariondash ldquoCovers emissions from all gases sectors sources in within project

boundary (Marrakech Accord Annex A)rdquondash On-site emissions -reductions that arise immediately from the project

activity itselfndash Off-site emissions -reductions occur upstream or downstream of the

projectndash Leakage

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Verification

bull Periodic independent review of the monitored project emissions during the implementation period

bull Third party review by designated OE (different than Validation OE)

bull Includes a review ofndash Datandash Proceduresndash Interviewsndash Identify concernsndash Confirm GHG reductions in monitoring process

bull regular reports to CDM Executive Board = guaranteed accredited emissions reduction

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

Certification

bull Certification report issued by OEbull The report will

bull Specify ownership of GHG reductionsbull Note no further analysis is requiredbull State the quality of GHG reductions

bull Report submitted to CDM Executive Board by OE

bull Board then reviews report and issues CERs equal to verified amount of GHG reductions

bull Transfers liability to the certifier

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

The road aheadhellipbull Pros of Kyoto

ndash Market-based approachndash Flexibilityndash Focus on those responsible for problemndash Monitoring and reporting establishedndash First step

bull Cons of Kyotondash US China India face no commitmentsndash Russia has hot airndash Potential of emissions leakagendash Potential of withdrawalndash Only 5 years 2008-2012

bull Currentndash UNFCCC dialogue continuesndash G8+5 (Brazil China India Mexico South Africa) talks on climate and energy

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31

• International Climate Policy UNFCCC and Kyoto
• International Cooperation
• International Policy Considerations
• International Cooperation on Climate Change
• From UNFCCC to Kyoto
• Slide 6
• UNFCCC
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• UNFCCC
• Involvement of developing countries
• Kyoto Protocol
• Implementation mechanisms
• Slide 16
• Slide 17
• Some thoughts on the costs of the protocol
• Slide 19
• Marrakesh ndash agreement on final issues
• Slide 21
• CDM
• Slide 23
• Slide 24
• Project Cycle
• Baselines
• Baseline approaches
• Verification
• Certification
• The road aheadhellip
• Slide 31