Joint implementation, eligibility and the Compliance Committee

Andrew Howard, Reporting Data and AnalysisCam Carruthers, Legal Affairs

Bonn, October 2007

Overview

Part I: JI eligibility

• Eligibility requirements

• Implications for JI transactions

• Registry implementation status

Part II: Compliance

• Eligibility and Compliance

• Compliance Procedure

• Compliance and Kyoto Accounting

Part I: JI eligibility

Crediting JI projects

• Host Annex B Party converts (“issues”) existing units in itsnational registry into ERUs based on JI projects

• Registries transfer ERUs to investing project participants

• ERUs may be sold to others under emissions trading

• International Transaction log validates registry issuance and transfers

• Issuance and transfer only possible

- if Parties are eligible (also the acquiring Party)

- if Parties registries are operational with the ITL

AAU

RMU

ERU

ERU

for emission-reducing projects

for projects in LULUCF activities

JI eligibility

a. Party to the Kyoto Protocol

b. Assigned amount calculated

c. National system in place for estimating emissions/removals

d. National registry in place for tracking assigned amount

e. Submission of most recent required emissions inventory

f. Accurate accounting of assigned amount and submission of information

Eligibility requirements under track 1

a. Party to the Kyoto Protocol

b. Assigned amount calculated

d. National registry in place for tracking assigned amount

JI track 2 eligibility

JI issuance and transfer

No eligibility needed to participate in JI projects

eligibility only relates to ERU issuance, transfer and acquisition

Can issue, transfer and acquire ERUs

Party may verify projects and reductions by its own procedures

Track 1 (full eligibility)

No eligibility Cannot issue or transfer ERUs

Track 2 Can issue and transfer ERUs

only after JISC verification of the project and reductions

Eligibility progress

Parties demonstrate fulfilment of eligibility through their Initial Reports

• All Initial Reports submitted, most review team visits completed

• 8 Initial Report Reviews published on www.unfccc.int

Status of Parties’ registry implementation

• 20 EU registries now ITL-connected (out of 24 currently on the CITL)

• 7 non-EU registries now ITL-connected (out of 11 registries)

• Most remaining work is to finalize registry documentation

Most registries ready to start live operations with the ITL

• Go-live activities originally planned for mid-November

• EU registries must wait to go-live together with the CITL

• Now checking which non-EU registries wish to start in Nov (without EU)

Part II: Compliance

Eligibility and compliance

• Initial eligibility: 16 months after Party submits its Initial Report

- unless the enforcement branch earlier decides otherwise

- Enforcement Branch takes note of IRRs received

- Secretariat will keep lists of eligible and suspended Parties

• Further information on the UNFCCC website

- Report on the second meeting of the enforcement branchhttp://unfccc.int/parties_and_observers/notifications/items/3153.php

- Information note of September of 20 September http://unfccc.int/kyoto_protocol/compliance/enforcement_branch/items/3785.php

Compliance procedure

Steps/key elements

1. Allocation, preliminary examination

2. Hearings, comments from Parties concerned

3. Expert Advice, information from NGOs/IGOs

4. Preliminary and final decisions

Timing and other key considerations

• Expedited Procedure – 16 weeks (or less + 1/allocation)

• Possible referral to facilitative branch

• Enforcement branch decision by double majority

• Flexibility for EITs

2006 2008 20092007 2012 2013 20142011 20152010

Initial Reports

Voluntary Annual Reporting ‘True-up period’ Report

Mandatory Annual Reporting

Article 8 Review Process

Compliance Committee

3.1 ComplianceAssessmentCompliance timelines

12

Fa

cilit

ative

Bra

nch

En

forc

em

en

tB

ran

ch

Allocation Preliminary examination

Initial

Status

Annual

True-up

Periodic

ERT reviewreports

AParty

Preliminary examination

Suspension of eligibility, Art.3.1, 5.1, 5.2, 7.1, 7.2

Final Decision

FinalDecision

COP/MOP

Appeal to COP/MOP

Emissions inventory

adjustments

Emissions inventory

Assigned amount

corrections

Assigned amount

Additional accounting info

Decision to apply adjustments or corrections

Adjustments and

corrections

Appeal to COP/MOP against the decision taken by the EB relating to Art. 3.1

Annual Report

Re

qu

est

the

EB

to

re

insta

te

elig

ibili

ty

thro

ug

h t

he E

RT

Annual Report

Submissions

Preliminary findings or Decision

not to proceed

Final Decision

Secretariat’sC&A

database

Appeal to COP/MOP

&Facilitation

Expedited

Preliminary examination

Lists of Parties meeting eligibility requirements and

Parties suspended

Facilitation

Financial Mechanism

Request EB directly to reinstate eligibility

Qs of implementation about itself or another Party

The Party concerned is notified of all decisions via the secretariat

Compliance CommitteeFunctions

Co

mp

liance

Co

mm

itte

e P

len

ary

Bure

au

Reports indicating Qs of imp

Other review reports

ERT report or submission by a Party with respect to another Party

Submission by a Party with respect to itself

Reinstatement of eligibility Reinstate eligibility or apply

further procedures

Compliance system

Thank you!

Eligibility and compliance

Key CMP decision text

‘A Party . . .with a commitment inscribed in Annex B shall be considered … [t]o meet the eligibility requirements… after 16 months have elapsed since the submission of its [initial] report …or, at an earlier date, if the enforcement branch of the Compliance Committee has decided that it is not proceeding with any questions of implementation relating to these requirements indicated in reports of the ERTs under Article 8 of the Kyoto Protocol, and has transmitted this information to the secretariat.’

– Decisions 3/CMP.1, annex, paragraph 32; 9/CMP.1, annex, paragraph 22; and, 11/CMP.1, annex, paragraph 3