Basics and objectives
In addition to CDM
and Emissions Trading
, the Joint Implementation process provides industrialised countries with a further tool for keeping their granted emission limit.
The JI modalities allow Annex-B countries
, as well as businesses and institutions within these countries to invest in foreign climate protection measures and earn emission credits in return. The investing country and the host country must be registered as Annex 1 or Annex B countries. JI projects may not only include technical emission abatement, e.g. upgrading a power plant with a more efficient turbine, but also contain investments in so-called carbon sinks (forests sequestering carbon).
Thus, potential investors are in the position to avoid emissions at the location currently offering the best conditions. However, the generation of least costly ERUs
in a foreign country must not replace national emission reductions for reaching the domestic target, but are intended to offer a supplement abatement opportunity (see supplementarity).
Abatement measures under JI entail ERUs (Emission Reduction Units).
The investing country and host country must both approve the project. In order to calculate the actual reductions a baseline is implemented, pointing out the assumed emissions without that particular measure.
Initial situation:
- Investing country exceeds emission allowance by a certain amount.
- The host country is in line with emission allowance and has good opportunities for further recuctions.
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