Global reduction of greenhouse gases

In contrast to emissions trading between countries, JI and CDM deal with tangible projects which reduce greenhouse gas emissions in various installations and operations. This might happen for example by means of energy efficiency measures or by the replacement of fossil fuels with bio fuels. These are called project-based mechanisms. In addition to reduced emissions, these project-based mechanisms can also contribute to sustainable development, (according to the criteria of the host country), important technology transfer, and capacity building in the recipient countries. It is anticipated that these measures will facilitate the modernisation of and increase the efficiency of the industry and energy sectors in the host countries.

The CDM and JI contribute to the global effort to tackle rising greenhouse gas emissions by cost-efficient measures in countries where reductions in emissions can be achieved in a less expensive way. Going forward, the mechanisms can thus help the countries of the world agree on more far-reaching commitments than would otherwise have been the case.

The Clean Development Mechanism, CDM, provides developing countries with the chance to develop in a way that takes the climate change into account. Countries committed to the Kyoto Protocol can be credited with “Certified Emission Reductions” (CERs) by purchasing emission reductions from emission reducing projects in countries without a commitment. CERs are emissions allowances which are issued in exchange for real and verifiable emissions reductions. Projects within the framework of the CDM not only aim to reduce greenhouse gases, but also to contribute to sustainable development in the country where the measure is made. The host country should confirm that the project is contributing to sustainable development before the project may be approved and registered as a CDM project by the CDM Executive Board.

Joint Implementation, JI, allows a country or a company with commitments under the Kyoto Protocol to bring in “Emission Reduction Units” (ERUs) by supporting projects in another country with commitments under the Protocol. The host country’s “Assigned Amount Units” (AAUs) are converted into ERUs corresponding to the emission reductions from JI projects implemented in that country. For every ERU awarded, one of the host country’s AAUs is cancelled out.
Joint Implementation can take place in two ways, JI track 1 or JI track 2. Under JI track 1 project approval, supervision and transfer of ERU’s take place in accordance with agreements between two or more countries. Projects within the framework of JI track 2 take place under the supervision of the JI Supervisory Committee.