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The concept of additionality addresses the question of whether the project would have happened anyway, even in the absence of revenue from carbon credits.
- Only carbon credits from projects that are "additional to" the business-as-usual scenario represent a net environmental benefit.
Carbon projects that yield strong financial returns:
- even in the absence of revenue from carbon credits;
- or that are compelled by regulations;
- or that represent common practice in an industry
are usually not considered additional, although a full determination of additionality requires specialist review.
- It is generally agreed that voluntary carbon offset projects must also prove additionality in order to ensure the legitimacy of the environmental stewardship claims resulting from the retirement of the carbon credit (offset).
According the World Resources Institute/World Business Council for Sustainable Development (WRI/WBCSD) : "GHG emission trading programs operate by capping the emissions of a fixed number of individual facilities or sources.
Under these programs, tradable 'offset credits' are issued for project-based GHG reductions that occur at sources not covered by the program.
- Each offset credit allows facilities whose emissions are capped to emit more, in direct proportion to the GHG reductions represented by the credit.
- The idea is to achieve a zero net increase in GHG emissions, because each ton of increased emissions is 'offset' by project-based GHG reductions.
The difficulty is that many projects that reduce GHG emissions (relative to historical levels) would happen regardless of the existence of a GHG program and without any concern for climate change mitigation.
- If a project 'would have happened anyway,' then issuing offset credits for its GHG reductions will actually allow a positive net increase in GHG emissions, undermining the emissions target of the GHG program.
Additionality is thus critical to the success and integrity of GHG programs that recognize project-based GHG reductions."
The Rest @ Wikipedia
Joint implementation (JI) is one of three flexibility mechanisms set forth in the Kyoto Protocol to help countries with binding greenhouse gas emissions targets (so-called Annex I countries) meet their obligations. JI is set forth in Article 6 of the Kyoto Protocol.[1]
Under Article 6, any Annex I country can invest in emission reduction projects (referred to as "Joint Implementation Projects") in any other Annex I country as an alternative to reducing emissions domestically. In this way countries can lower the costs of complying with their Kyoto targets by investing in greenhouse gas reductions in an Annex I country where reductions are cheaper, and then applying the credit for those reductions towards their commitment goal.
A JI project might involve, for example, replacing a coal-fired power plant with a more efficient combined heat and power plant. Most JI projects are expected to take place in so-called "economies in transition," noted in Annex B of the Kyoto Protocol.[2] Currently Russia and Ukraine are slated to host the greatest number of JI projects.[3]
Unlike the case of the Clean Development Mechanism, the JI has caused less concern of spurious emission reductions, as the JI, unlike the CDM, takes place in countries which have an emission reduction requirement.
The process of receiving credit for JI projects is somewhat complex.
- Emission reductions are awarded credits called Emission Reduction Units (ERUs), where one ERU represents an emission reduction equaling one tonne of CO2 equivalent.
- The ERUs come from the host country's pool of assigned emissions credits, known as Assigned Amount Units, or AAUs.
- Each Annex I party has a predetermined amount of AAUs, calculated on the basis of its 1990 greenhouse gas emission levels.
- By requiring JI credits to come from a host country's pool of AAUs, the Kyoto Protocol ensures that the total amount of emissions credits among Annex I parties does not change for the duration of the Kyoto Protocol's first commitment period.
A carbon project refers to a business initiative that receives funding because of the cut the emission of greenhouse gases (GHGs) that will result.
To prove that the project will result in real, permanent, verifiable reductions in Greenhouse Gases, proof must be provided in the form of a
- project design document and activity reports validated by an approved third party in the case of Clean Development Mechanism (CDM) or Joint Implementation (JI) projects.
Carbon projects are developed for reasons of voluntary environmental stewardship, as well as legal compliance under a Greenhouse Gas Cap & Trade program.
Voluntary carbon (GHG) reducers may wish to monetize reductions in their carbon footprint by trading the reductions in exchange for monetary compensation.
The transfer of environmental stewardship rights would then allow another entity to make an environmental stewardship claim.
There are several developing voluntary reduction standards that projects can use as guides for development.
Carbon projects have become increasingly important since the advent of emissions trading under Phase I of the Kyoto Protocol in 2005.
They may be used if the project has been validated by a Clean Development Mechanism (CDM) Designated Operational Entity (DOE) according the United Nations Framework Convention on Climate Change.
The resulting emissions reductions may become Certified Emissions Reductions (CERs) when a DOE has produced a verification report which has been submitted to the CDM Executive Board.
There may be new project methodology validated by the CDM EB for post phase II Kyoto trading.
Labels: E-Education, N- Kyoto Protocol
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