The Kyoto Protocol’s JI mechanism is struggling, but the committee overseeing it is eager to promote it to emerging economies designing their own national carbon markets.
JI has lingered in the doldrums for years, as demand has evaporated and new supply is currently prohibited by the fact that AAUs, which JI credits are based on, have not yet been issued for the second Kyoto commitment period.
But while officials and investors have shifted their attention from the Kyoto mechanisms to the emergence of national carbon markets, the JI Supervisory Committee insists it has a role to play in designing the post-2020 emissions markets.
“The JISC nevertheless remains of the view that the approach embodied in JI should, and will be, relevant to the implementation of the new climate agreement to be adopted for the post-2020 period,” it concluded at its last meeting in Bonn, which ended Friday.
In a Paris deal, “an increasing number of Parties can be expected to take on quantified emission commitments that lend themselves to the type of international crediting made possible through JI”, the JISC said.
DOUBLE COUNTING
China, Mexico, South Africa and South Korea are some of the nations that have no specified emission caps in the UN context, but which are at various stages of designing national market mechanisms to cut emissions.
China will launch its national ETS next year, but officials are still grappling with how to avoid double counting in its sprawling domestic offset market, which is a concern to some potential investors in CCER projects.
Without clear rules, the emission reductions achieved at a CCER project might be counted towards the overall target of the province hosting the project, and again in the province where the buyer of the offsets is located.
Adapting a JI approach to emerging-economy carbon markets rather than a CDM approach might help solve such issues, and pave the way for integrating national markets into a global mechanism after 2020.
As national markets emerge and a deal in Paris may provide guidance for how they might co-exist, the JISC should “stress the value of the draft modalities and procedures for JI … as a blueprint for the operation of mechanisms under the new climate agreement”, the JISC said.
NEW LEADERSHIP
Meanwhile, the JISC elected Julia Justu Soto, the executive director of Peru’s National Environmental Fund, as its new chair, replacing Poland’s Piotr Dombrowicki.
Konrad Raeschke-Kessler, a senior scientific officer with the German Emissions Trading Authority, was elected new vice chair.
The committee agreed its main focus this year would be to provide guidance for the post-2020 period rather than working on short-term improvements of the JI.
“The JISC does not foresee that there will be a significant increase in JI activity in the short term,” it said.
By Stian Reklev – stian@carbon-pulse.com
