Background Information

Legal Basis

The Clean Development Mechanism (CDM) and Joint Implementation (JI) serve to promote bilateral cooperation. Such cooperation takes place not at state but at project level and involves private bodies (particularly businesses). This is why CDM and JI are often subsumed under the term ‘project-based mechanisms’. The idea is for project developers to register projects with the competent authorities. Their projects must either reduce emissions or capture carbon from the atmosphere and store it in biomass (sink projects). Examples of emission reduction projects include the construction of wind farms, more energy-efficient district heating systems and the installation of biomass-fuelled power stations. Sink projects comprise afforestation and reforestation activities. Once a project has completed a pre-determined project cycle, the project developer receives emission reduction certificates in the amount of the emissions saved or of the carbon captured and stored. CDM and JI were created in 1997 as an integral component of the Kyoto Protocol. The idea of joint implementation for climate change projects had, however, already been set out in the UN Framework Convention on Climate Change in 1992. Following the Convention’s official entry into force, the first Conference of the Parties (COP) agreed to launch a pilot phase for Activities Implemented Jointly (AIJ) (Decision 5/CP.1). The aim was to gather and pass on experience and knowledge in dealing with the new mechanism. This led to over 150 AIJ projects of differing types and scales, albeit unevenly distributed geographically. AIJ projects could not, however, be used to generate emission reduction certificates and have since lost their significance.

Joint Implementation

Joint Implementation is enshrined in Article 6 of the Kyoto Protocol. JI is only open to countries listed in Annex B of the Protocol, in other words to those industrialised nations belonging to the OECD and in Eastern Europe. In international law, JI projects are usually described as Article 6 projects. Legally binding decisions on JI implementation have been in place since the end of 2005. The Conference of the Parties to the Climate Change Convention (COP) had actually developed a set of Guidelines for the Implementation of Article 6 of the Kyoto Protocol (Decision 16/CP.7) at COP 7 in Marrakech back in 2001. However, what are known as the Marrakech Accords were really only a draft proposal to be submitted for approval at the Conference of the Parties serving as a Meeting of the Parties to the Kyoto Protocol (COP/MOP). JI implementation was only able to really get underway in 2005, once the Kyoto Protocol had entered into force and the COP/MOP decision was formally adopted. This happened at the first meeting of the COP/MOP in Montreal in December 2005 ( Decision 9/CMP.1).
The decision provides for two separate JI tracks: Track 1, in which project implementation is largely left to the participating states, and Track 2, which is monitored by the JI Supervisory Committee (JISC) called into being at COP/MOP 1 ( Decision 10/CMP.1). Over the course of 2006, the JISC developed yet more guidelines along with the forms and documents needed to implement JI Track 2 projects. The project approval process was officially launched on 26 October 2006. The JISC’s decisions were adopted at COP/MOP 2 in Nairobi ( Decision/CMP.2, Implementation of Article 6 of the Kyoto Protocol).
Details about projects implemented under JI Track 1 and Track 2 can be found under Conducting JI Projects.

The Clean Development Mechanism

The CDM is based on Article 12 of the Kyoto Protocol. Article 12.2 sets out two equally weighted objectives: to assist investor countries in achieving compliance with their Kyoto Protocol commitments and to assist host countries in their efforts to achieve sustainable development. CDM host countries are those countries not listed in Annex B of the Kyoto Protocol – the countries generally described as developing countries. The investor countries are the world’s industrialised nations.
The modalities and implementation procedure for CDM projects are set out in the Marrakech Accords. These are designed to ensure that a real contribution is made towards achieving sustainable development in the host countries and to combating climate change. In contrast to the rules on Joint Implementation, those for the CDM provisionally entered into force in 2001 by way of a COP decision made in Marrakech (known as the ‘prompt start’). In the following years, the COP adopted additional guidelines for CDM implementation along with modalities and procedures specifically applicable to afforestation and reforestation projects. Following the Kyoto Protocol’s entry into force, the COP/MOP adopted all the COP’s provisional decisions regarding the CDM and issued further guidelines ( Decisions 3-8/CMP.1). The CDM Executive Board (EB) is responsible for drawing up detailed rules and guidelines and for monitoring CDM projects.

More Information

The Project Cycle