In a few weeks the parties to the Framework Convention on Climate Change (FCCC) will meet in Kyoto, Japan to decide whether to adopt a protocol to the Convention requiring developed country (Annex I) parties to reduce their emissions of greenhouse gases. If adopted, the protocol will probably also contain “flexibility” measures—including emissions trading and possibly joint implementation (JI)—to reduce the cost of those reductions. JI would allow Annex I parties to finance activities in developing countries and countries with economies in transition to reduce greenhouse gas (GHG) emissions and enhance GHG “sinks” (such as forests) and receive credit from those reductions toward their commitments to reduce their own GHG emissions. While the notion of trading between Annex I parties is gaining acceptance, JI between Annex I and non-Annex I parties remains controversial. Currently, JI is in a pilot phase, during which countries may not receive credits for any emissions reductions they may achieve.
At the last negotiation of the climate change protocol, three environmental NGOs—the Center for International Environmental Law, Centro de Derecho Ambiental y de los Recursos Naturales and The Woods Hole Research Center—issued a call for independent evaluation of the JI pilot phase before parties agree to full JI with crediting. They pointed out that there has been no on-the-ground review of JI projects and that information about projects, provided mainly by the parties involved, is inconsistent and incomplete.
The three NGOs recommended a three-step process. First, an independent team drawn from NGOs, academia, government and business should carry out an evaluation. Second, the parties should decide, on the basis of that independent evaluation, whether to extend the pilot phase, terminate JI altogether, or move to full JI with crediting. Third, if they decide to move to full JI, the parties must develop a strong legal and institutional regime for JI before crediting begins.
The logic of evaluating the pilot phase before moving to full JI is unassailable. What, after all, is the point to having a pilot phase, if key decisions are made before data from the pilot phase has been assessed and the lessons of the pilot phase learned? Nevertheless, it appears that some parties may press for a decision at the Kyoto meeting to begin crediting. The Kyoto negotiating text already contains provisions both for JI amongst Annex I countries and, if the Conference of the Parties gives its approval, for JI between Annex I and non-Annex I countries.
But the negotiating text fails to provide legally binding guarantees that JI will achieve its climate objective or provide other critical environmental and socio-economic benefits. It may even prevent JI from evolving dynamically toward a more certain trading regime, such as the “cap-and-trade” system advocated by the United States for Annex I countries. As developing countries participating in JI build their capacity for implementing larger-scale emissions reduction programs, they may choose to move away from the problematic project-by-project approach towards a more integrated approach, as one country—Costa Rica—already has. The negotiating text, however, appears to lock in the project-by-project approach and, hence, may prevent countries from adopting more comprehensive strategies.
Independent evaluation, before the rules for JI are locked into place, must be undertaken precisely to avoid such unintended consequences. Recognizing that, despite these cautions, parties may push for a decision in Kyoto to proceed with JI, CIEL offers here a set of principles to guide that decision, regardless of when it is made. These principles are aimed at some of the key concerns developing countries and environmental NGOs have about JI, concerns which must be addressed if JI is to succeed both politically and environmentally.
Why JI?
JI proponents most often cite its potential for lowering the cost of reducing GHG emissions. This cost saving comes mainly from the ability of JI to capture low-cost abatement opportunities in developing countries and, to a lesser extent, in countries with economies in transition. Several factors contribute to the lower cost of abatement opportunities in developing countries. First, these countries have yet to install much of their energy and industrial infrastructure, whereas developed country infrastructure is already largely in place. Building factories and power plants efficiently in the first place is cheaper than converting or replacing them later. Second, many developing countries have forests that are in need of protection and degraded lands that could be reforested. Both these activities can provide climate and other environmental and socio-economic benefits at relatively low cost. JI also may be cheaper merely because labor costs are lower in many developing countries and countries with economies in transition.
Just as JI has the potential to lower the cost of achieving a fixed amount of GHG emissions abatement, it could increase the amount of abatement that can be achieved for a fixed cost. In current circumstances, money invested in developing countries will generally buy more GHG emissions reductions and sequestration than the same amount invested in developed countries. Thus, given existing political and financial constraints, JI could help developed countries achieve greater emissions reductions than would otherwise be possible.
Many cost effective GHG reduction and sequestration opportunities in developing countries may be lost if they are not captured quickly. Energy consumption is growing rapidly in developing countries, and will soon overtake consumption in the developed world. Tropical forests continue to shrink, and the pace of deforestation may be accelerating. At the same time, developing countries are not expected to adopt commitments to reduce their own emissions in the same time-frame as developed countries. In any event, they often lack the resources to fully implement such commitments. Thus, JI may be the only mechanism presently available for financing wide-scale improvements in energy efficiency and forest protection in these countries.
Another reason cited in support of JI is that it would engage the private sector in both developed and developing countries. By promoting joint ventures and other cooperative arrangements, JI could foster transfer of equipment and know-how and encourage the development and diffusion of more climate-friendly technologies. Given the recent shift in financial flows into developing countries from public to private sources, it is crucial to harness the power of private sector investment and to divert these flows into more climate-friendly channels.
Climate considerations aside, JI could provide significant environmental and socio-economic benefits to developing countries. Outmoded and inefficient fossil fuel technologies waste precious resources and are often the source of severe local pollution. Deforestation degrades vast tracts of land, damages watersheds, contributes to catastrophic flooding and can cause significant health problems (consider the massive forest fires still smoldering in Indonesia). By providing access to state-of-the-art energy technologies, JI could make developing country industries more competitive. By providing resources for forest protection and regeneration, JI could protect important natural resources and enhance economic opportunities in sustainably harvested forest products, pharmaceuticals and ecotourism.
So Why Is JI Controversial?
Despite these potential benefits, many developing countries and environmental NGOs justifiably object to JI. Developing countries object on several grounds. First, they argue that the wealthy countries of the North owe them an “ecological debt.”1 Since the early days of the Industrial Revolution, developed countries have benefited from technological advances with little concern for the South, all the while polluting the atmosphere and exploiting Southern natural resources through colonial and post-colonial trading systems. GHG emissions from developed countries caused the problem of global warming; accordingly, those countries are indebted to the South for the damage they inflicted. Under this reasoning, it would be inequitable for Northern interests to receive the benefit of carbon credits from JI projects they sponsor, because the Northerners’ JI investment should properly be seen as partial payment of the ecological debt they owe the South, and for which no return is due.
In recognition of this debt, and also of developing countries’ limited resources and the low priority of global warming on the list of many developing countries’ problems, Annex I countries committed under the terms of the FCCC to reduce their own domestic emissions and to assist non-Annex 1 countries to reduce theirs. This commitment was reaffirmed in the Berlin Mandate adopted by the first COP in 1995. In the view of many developing countries, Annex I countries should not receive credit for JI carbon reductions because cooperation (including technology transfer and financing for the full incremental costs of developing countries’ mitigation efforts) already forms part of their FCCC obligations. Permitting JI investors to receive credit for reductions made beyond their borders would allow industrialized countries to evade their responsibility to take the lead in correcting the GHG problem.
Many developing countries further fear that a JI regime would pressure them to establish emissions limitation targets, which would stunt their economic progress. JI may also threaten economic progress by constraining developing countries’ future choices about the use of scarce resources and by shifting policy focus towards areas targeted by JI projects and away from key development issues such as poverty alleviation and sustainable food production. For example, JI may displace agricultural use of valuable arable land in favor of long-term carbon-sequestering forestry projects. Further, forestry projects may increase Northern control of forestry policy in developing countries to the detriment of local communities and indigenous populations. Ultimately, many developing countries suspect that JI represents a form of neo-colonialism, a “trojan horse within which is packaged another industrialized country ploy to extend their exploitation of resources and cheap labor in the South.”2
Many developing countries also fear that they will not receive a fair price for their carbon offset opportunities. Past experience with commodities agreements has taught them that such arrangements often work to the advantage of the North—supply frequently outpaces demand, and developing countries often are unable to maintain prices at sustainable levels. They particularly fear that JI will provoke a bidding war, in which developing countries compete with each other to host the cheapest carbon offset projects, jettisoning in the process all non-carbon environmental and socio-economic benefits.
Finally, developing countries are concerned that JI will not ensure transfer of appropriate technologies. This concern takes a number of forms. One is that, through JI, developed countries may continue provide them with obsolete and hence cheap (and sometimes harmful) technologies. Another is that JI may continue their reliance on the North for technology. Unless technology transfer is supported by education and training, by adequate financial resources for technical support, and by access to replacement parts and supplementary technology, such transfers threaten to create dependence rather than independence. Further, developing countries are concerned that they may become the testing ground for new climate change technologies which are unproven and ultimately unreliable.
Environmental groups echo some of these concerns about JI while voicing additional ones. On a philosophical level, many environmentalists disapprove of any scheme based upon marketable, tradable emissions permits on the ground that such schemes violate the “polluter pays” principle. Some argue that JI would weaken the impetus for energy reform in the industrialized countries because, by allowing GHG producers to meet their mitigation targets through inexpensive forestry projects abroad, JI would permit them to avoid the technology-forcing effects of domestic emissions caps.3 This, in turn, could increase the cost of curbing climate change in the future. By failing to develop new technologies now, industrialized countries may have to cut emissions faster and further in the future. A rapid response in the future could be more expensive than carefully planned measures undertaken today. Further, it may transfer more of the cost burden of curbing climate change to the South. Developing countries express concern that JI could allow industrialized countries to capture low-cost emission reductions in developing countries, (for example, cost effective afforestation projects) leaving developing countries with reduced opportunities and higher costs for future domestic abatement in the event they agree to binding emission targets.4
Environmental groups also object that JI would create a disincentive for developing countries to accept quantified emissions obligations under the FCCC. Quantified emission obligations could limit the extent to which developing countries can take advantage of JI. The greatest rate of emissions growth is occurring in developing countries such as China, Brazil, India, and Indonesia. Although Annex I countries bear a disproportionate responsibility for the buildup of atmospheric GHGs, the problem of global warming can not be solved unless developing countries eventually accept obligations to curtail emissions. However, environmental groups argue, if developing countries are allowed to sell GHG reduction credits to industrialized country investors through JI, they will have little incentive to agree to binding targets anytime in the foreseeable future.
Environmental groups are concerned that JI will introduce additional risk, as it expands requirements for monitoring and enforcement in countries where capacity is often limited. Forest projects are particularly risky, as they are subject to environmental threats such as fire, pest infestation and disease, and human pressures such as war, poverty and changes in government policy regarding the efficacy of JI forestry projects. Further, using forest projects to offset emissions from fossil fuels involves swapping carbon stored safely deep beneath the earth’s surface for carbon stored in a living, fragile layer above its surface.
Finally, these groups argue that proponents of JI have failed to show that it will be cost effective. First, they emphasize that there is little evidence to show that abatement opportunities in developing countries are actually cheaper than those in industrialized countries.5 Second, once the costs of thorough monitoring, verification and enforcement are considered, JI may prove uneconomic. Third, to demonstrate cost effectiveness, the cost of addressing climate change through alternative measures such as carbon taxes and trading must be evaluated and shown to be more expensive.6 This evaluation has not been done.
Problems with the JI Methodology
An equally important set of objections focus on the technical difficulty of assessing and ensuring the climate benefits resulting from JI. Quantifying these benefits requires an estimation of GHG emissions that would have occurred if a given JI project had not been undertaken (i.e., what would be the emissions “but for” the project?). JI opponents argue that accurately measuring, monitoring and verifying these benefits will be impossible. Part of the difficulty is due to the wide variance in methodologies used by project developers and country programs to compute such benefits. The methodological and technical challenges of JI projects include, among other things, guaranteeing financial and environmental additionality, determining baselines, monitoring and verifying reduced or sequestered emissions, guarding against leakage, and assuring durability of emissions offsets.
Financial additionality refers to the need for funds for JI pilot projects to be “new and additional” to the financial obligations of Annex II Parties (mainly OECD countries) within the framework of the financial mechanism of the FCCC as well as to current official development assistance flows. Although future JI funding is expected to come primarily from the private sector, some countries (e.g., the Netherlands and Switzerland) are currently using government funds to finance projects.7 While such government involvement may be essential to initiate projects during the pilot phase (and possibly even beyond), it may conflict with the requirement that JI funding “be additional” to pre-existing international development assistance. The possibility that some JI projects may be linked to, or be components of, projects financed by the World Bank, the Global Environment Facility, or other international financial institutions, makes determining financial additionality more difficult.
Environmental or emissions additionality currently requires JI pilot projects to bring about real, measurable and long-term environmental benefits related to the mitigation of climate change that would not have occurred in the absence of such activities. This requirement is essential if JI is to become an acceptable tool for controlling global warming, yet its execution has turned out to be extremely complicated (some would say impossible, since it can never be known with certainty what would have happened had the project not been implemented). First, an emissions baseline must be selected, against which any carbon benefits obtained by mitigation efforts may be measured. For project baselines, as opposed to sectoral or national baselines, the project developer must determine a “reference case,” which is the amount of GHG emissions that would be produced or sequestered on the project site in the absence of the JI project. This requires identifying all of the carbon sources and sinks located on the project site. The reference case will be “static” if it includes only existing sources and sinks, or it could be “dynamic,” taking into account subsequent changes in the local economy, population, or environment. The project developer then computes a “project case” that measures the emissions effects of the project for the same time period as the reference case and from which net project GHG benefits can be derived.
Leakage presents a further JI challenge. Leakage is the phenomenon by which reducing or sequestering emissions in a specific place results in the pollution-causing activity simply occurring somewhere else.8 Theoretically, leakage may be controlled on the local and national level if the host country has a comprehensive sector-wide or nation-wide GHG mitigation plan and the political will and capacity to enforce it. Even so, the country may not be able unilaterally to control international leakage if, for example, companies faced with increased environmental restrictions simply move their operations to other countries where rules are more lax.
Project duration is a key element of full carbon accounting. Net GHG offsets must be calculated not only for the short term, but must be monitored, verified, and guaranteed for the life of the project. Therefore, provisions must be made to ensure against loss due to project failure. This is particularly important in forestry projects, where credits produced by carbon sequestration will likely be used to offset fossil fuel emissions. Those emissions are believed to retain their radiative forcing qualities in the atmosphere for 100 years or more.9 Forest projects thus must be sufficiently durable to account for the long atmospheric residency of the CO2 emissions they offset, and must anticipate and account for possible loss of trees from insect infestation, disease, fire, or accident (here it may be important to distinguish between natural and anthropogenic causes).
Monitoring and Verification, preferably by third parties, is another essential element of JI accounting. JI presents a moral hazard that, intentionally or not, project sponsors and hosts will exaggerate the carbon emissions of the baseline case as well as the mitigation or reduction achieved by the project case. Both parties benefit from overstating the number of carbon credits obtained from the project. Rigorous monitoring and verification is needed to counteract this moral hazard and to ensure that reported carbon mitigation represents genuine reductions. Monitoring entails measuring and calculating the carbon benefits obtained by the project. Currently, it is usually done by the project developer rather than an independent, third party. Due to the wide range of potential JI project types, no monitoring methodologies have yet been developed that can be universally employed. Carbon benefits claimed by the developer must subsequently be verified by a qualified third party—which itself should be certified or licensed by a reputable entity. Verified project results are then reported to the project host and home countries, to be integrated into their GHG tracking records and in turn reported to the FCCC via their respective submissions to the SBSTA. Monitoring and verification may thus add significant cost to JI projects. Some NGOs argue that the costs of monitoring and verification will outweigh the other benefits of JI. Other NGOs add that even if JI project results can be monitored and verified, it will be impossible to police potentially thousands of deals, and to provide enforcement of those which do not comply with agreed requirements.
The Chairman’s Consolidated Negotiating Text
The proposed language on JI in the Chairman’s Consolidated Negotiating Text-the negotiating text of the Kyoto Protocol-demonstrates the danger of allowing JI projects to generate credits before the pilot phase is evaluated. Article 6 of the text calls for the development of methodologies for calculating project baselines and actual emissions, for monitoring the reduction reported, and for the verification and auditing of credits. After more than three years of experience with JI, however, there is still no agreement on such methodologies. Additionality remains a highly controversial concept, as do the methods for establishing baselines and assessing leakage. Article 6 does nothing to resolve these difficult technical problems.
Nor does Article 6 give any assurance that JI projects will take advantage of opportunities, particularly in the forest sector, to provide important environmental and socio-economic co-benefits. Because JI could have enormous impact on the world’s forests, it must respect and promote all the values associated with forests. It must ensure that JI forest projects provide adequate habitat for biodiversity, that they protect soils, stream and wetlands, and that they provide long-term, sustainable economic opportunities for local communities. Because Article 6 merely requires JI projects to avoid adverse environmental and social effects, many opportunities to provide important and cost-effective collateral benefits may be lost. Moreover, the Article 6 monitoring and reporting requirements appear to apply only to climate impacts; they make no mention of other environmental and socioeconomic impacts.
Article 6 requires that projects be assessed on an individual project basis, which seems to preclude expansion of the “system boundary” to include off-site impacts in project evaluation. The requirement that baselines and additionality be determined on a project basis could prevent a host country’s program from evolving dynamically toward a more comprehensive regime, broader in scope and providing increasing levels of stringency and certainty. Approaches like the one already being tested in Costa Rica, which involve moving away from a project-by-project approach and toward sectoral or national baselines could help eliminate the uncertainty of project baselines and the danger of leakage. However, it is not clear that the Costa Rica JI program—arguably the world’s most advanced—is compatible with the language of Article 6.
Despite the potential offered by JI as a tool to address climate change, significant questions remain unanswered. The controversy surrounding JI, as voiced by concerned developing countries and environmental NGOs, and the unresolved methodological problems involved in the implementation, monitoring and enforcement of JI suggest that serious consideration must be given before deciding to proceed to full JI. Any decision about the future of JI must be guided by the following principles.
Twelve Principles to Guide Joint Implementation
1. Independent evaluation must precede a decision to move to full JI with crediting. Not enough is yet known about the potential benefits and pitfalls of JI to justify negotiating the end of the pilot phase and the beginning of full JI with crediting. Rather, the parties should turn their attention to improving the pilot phase and to ensuring that its lessons are learned by immediately commencing independent evaluation. Commencing evaluation now would provide a stream of information allowing mid-course corrections of the pilot phase and enabling project developers to design better pilot projects in the future. The logic of independent evaluation is unassailable. Without it, policy makers will be making critical decisions impacting climate change, development, and future North-South relationships based on incomplete and inaccurate data.
2. A comprehensive legal framework for JI must be in place before crediting begins. Establishing the “ground rules” within which JI must operate is an indispensable prerequisite to moving from the JI pilot phase to full JI with crediting. In the event the parties, based on independent evaluation or otherwise, decide to proceed to full JI, they must first put in place a legal and institutional framework at both the national and international level. While it is unclear yet whether there are sufficient benefits to justify proceeding to full JI, it is clear that proceeding cannot itself be justified without legal and institutional safeguards. The economic flexibility that JI can provide must be counterbalanced by rigorous criteria to ensure that, in addition to providing durable reductions in atmospheric GHG concentrations, JI adequately protects the environment, promotes the welfare of local communities, and complements the development objectives of host governments.
3. Cost effectiveness resulting from JI must produce net climate change benefits. JI should be viewed not only as a mechanism to reduce the cost of meeting a given emissions reduction target, but as a mechanism to achieve greater emissions reductions with a given level of investment. While it is legitimate for developed countries to seek ways of lowering the cost of reducing their emissions, it is vital that the efficiency gains from JI not only reduce costs but that they also be used to provide net climate change benefits by further reducing the amount of GHGs emitted, or by increasing the amount of GHGs sequestered. A simple way to guarantee such benefits would be to discount every credit by a fixed amount. Such a discount would also help allay concerns that JI will introduce added risk to domestic emissions reduction programs. However, discounting should not substitute for guarantees of real risk reduction through monitoring, verification and enforcement.
4. In addition to climate change benefits, JI must provide significant environmental and socio-economic co-benefits. This is particularly important for JI forest projects, where the potential environmental and socio-economic impacts occur on a spectrum running from very beneficial to very harmful. Certification of sustainable silvicultural practices, forest management and local community development would help ensure that forest projects yield co-benefits. These projects have an unavoidable element of climate risk attached. In effect they allow carbon to move from underground to above ground storage in biota, where it potentially can be released to the atmosphere. The risk can be justified only if forest projects provide more habitat for biodiversity, protect soils, streams and watersheds, and provide long-term, sustainable socio-economic benefits for local communities.
5. Annex I commitments must be met substantially through domestic policies and measures – the role of JI must be limited. Permitting Annex I countries to achieve only a minor portion of required emissions reductions through JI will alleviate developing country concern that the North will thrust the burden of its obligation upon the South. It will also address NGO concern that JI could take pressure off industrialized countries to research, develop and disseminate new energy technologies. The Chairman’s text recognizes this principle, but requires only that domestic policies and measures should provide the main means of meeting domestic commitments. This must be strengthened to ensure domestic measures form the primary source of GHG emission reductions.
6. Annex I commitments must be met substantially through emissions reduction – the role of JI sequestration projects must be limited. For many of the same reasons that Annex I countries should have limits placed on the amount of their GHG commitment that may be met through JI, they should also have limits placed on the opportunity to offset their emissions through sequestration, whether accomplished domestically through emissions trading or through JI. Forest projects introduce elements of quantitative and temporal uncertainty that can never be completely eliminated. More importantly, over-reliance on forest projects will reduce the imperative for research, development and dissemination of alternative energy technologies. Forest protection and regeneration can play an important role in protecting the climate, but to address the challenge of climate change developed countries must ultimately reduce their excessive consumption of fossil fuels.
7. JI must be flexible, dynamic and must promote full participation in the Kyoto Agreement. JI can be an inducement to countries to participate more fully in the protocol over time. Host countries would begin to participate by undertaking individual JI projects, as well as by doing other things required by the FCCC, including developing and implementing emissions reduction activities under Article 4.1 and gathering and reporting emissions data under Article 12. A logical second step, which should be encouraged and perhaps even required after parties have gained some experience with JI, is to adopt national or sectoral baselines, a step already taken by Costa Rica. A national baseline would address methodological problems, such as leakage and additionality, by eliminating the need to develop individual project baselines and accounting for all national activities within the sector. It would also give national governments more control over transactions, and would reduce transaction costs and prevent intra-national competition that could drive down the price of carbon to the disadvantage of the host country. The requirement in the Chairman’s Text that baselines and additionality be determined on a project basis must be clarified to ensure that it does not prevent a host country’s program from evolving toward a more comprehensive regime.
8. Estimates of global warming benefits resulting from a JI activity must be conservative. Determining emissions benefits will require estimation of baselines, assessment of leakage and quantification of emissions reduced or sequestered by JI activities. A dearth of data, limited technical capacity and lack of experience with JI guarantee that these calculations will contain a significant margin of error. Crediting should always be based on the most conservative estimate of emissions benefits achieved by each project, to ensure that credits generated by the project do not exceed the actual emissions benefit.
9. JI must account for the temporal as well as the quantitative component of GHG emissions. Emissions benefits must fully account for both the quantity of GHGs being offset and their residency time in the atmosphere. CO2 resides in the atmosphere for a century or more. Forest projects, which offset emissions by fixing carbon in biota, can be designed to store carbon for such long periods of time (some protected areas are planned to store carbon in perpetuity), but frequently commitments are made for much shorter periods. Even where commitments are sufficient, legal instruments must ensure that these commitments are met.
10. JI must promote capacity building in the host country. Before JI will be acceptable to developing countries, they must be satisfied of its ability to contribute to long-term, sustainable, locally driven economic development. Enhancing the institutional and technical capacity of host countries is an essential component of JI for a number of reasons. First, for JI to be effective, it must promote the development of institutional capacity to allow national regulators to evaluate the merits of proposed JI projects and the suitability of the technology they offer, to enable them to choose between alternative technologies, and to set standards and undertake ongoing review and evaluation of JI projects to ensure they meet the goals of the FCCC and complement domestic policy objectives. Second, endogenous technological capacity must be developed through training and education to allow the planning, assessment and systematic observation of JI projects. For example, forestry projects must be monitored and managed to ensure that carbon sequestration is durable and co-benefits are provided. Information from these projects could be used to improve future projects. Finally, institutional and technical capacity should be developed in all sectors-public, private and government-to ensure that all groups are able to play a role in combatting and adjusting to the effects of climate change.
11. JI must promote the transfer of appropriate technology. JI must promote the transfer of technology that provides maximum climate change benefits while complementing the social, economic and technical settings of host countries. Equitable access to clean, efficient technologies will help developing countries to follow a cleaner path to economic development than the one charted by the North. Before technology is “appropriate” it may need to be further developed, adapted and modified to suit the context where it will be used. Technology which is on the one hand obsolete, or on the other, experimental, will rarely be appropriate. Technology transfer should be supported by ongoing technical assistance, education and training, and by adequate financial resources. And it should complement other development objectives. For example, whereas JI investors may prefer to transfer technology for large scale energy projects which reap economies of scale, such large-scale projects may not always be consistent with the best policy for sustainable development. Developing countries could prefer to promote small scale, medium technology, decentralized generation facilities as part of JI.
12. JI must be conducted with a high degree of transparency and public participation. Transparency and public participation must form an integral part of any JI regime. The parties to the FCCC have already committed themselves to promoting the full, open and prompt exchange of information related to climate change and the economic and social consequences of response strategies, and to promoting public awareness and NGO involvement.10 These commitments should be extended to ensure that stakeholders in JI —including indigenous people, environmental and business NGOs and local governments—have the ability to participate in policy formation, and in the design, implementation and monitoring of JI projects. Full public access to information about JI projects allows independent verification by local communities and environmental groups that individual JI projects provide environmental and socio-economic co-benefits and otherwise further the goals of the FCCC.
ENDNOTES
1. See EDUARDO SANHUEZA ET AL., INSTITUTO DE ECOLOGIA POLITICA, JOINT IMPLEMENTATION: CONDITIONS FOR A FAIR MECHANISM 6 (Santiago, Chile, 1994).
2. See Onno Kuik & Joyeeta Gupta, Joint Implementation: Political and Practical Aspects with Special Reference to Africa 2 .
3. See Richard N. Mott, World Wildlife Fund, Joint Implementation and Carbon Offsets 3 (undated).
4. See Sierra Club, Risky Business: Why Joint Implementation is the Wrong Approach to Global Warming Policy (undated).
5. See L. D. Danny Harvey and Elizabeth J. Bush, Joint Implementation: An Effective Strategy for Combating Global Warming?, 39 Environment Vol. 8 at p41.
6. See Climate Network Europe, European NGO Position on Joint Implementation (undated).
7. See, e.g., Anne Arquit Niederberger, “Swiss AIJ Pilot Program,” JOINT IMPLEMENTATION Q. (Foundation JIN, Groningen, Neth.) July 1997, at 2; “Netherlands’ JI Registration and Certification Procedure Approved,” JOINT IMPLEMENTATION Q. (Catrinus J. Jepma, ed., Foundation JIN, Groningen, Neth.) July 1997, at 3. The United States Department of Energy has also recently begun a “Small Grants Program” that offers financial assistance for the development of USIJI project proposals. See “USIJI Announces Small Grants to Support Project Development,” INT’L PARTNERSHIPS REP., July 1997, at 2.
8. For example, leakage could occur when an area obtaining JI status becomes protected from deforestation and loggers respond by instead clear-cutting a neighboring forest, with the result that no genuine, net carbon benefits accrue despite the production of carbon offsets from the project.
9. See D. Schimel et al., Radiative Forcing of Climate Change, in INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE, CLIMATE CHANGE 1995: THE SCIENCE OF CLIMATE CHANGE 65, 76 (J. T. Houghton et al. eds., 1995). 10. Article 4(h) and 4(i). UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE, JUNE 12, 1992, S. TREATY DOC. No. 38, 102d Cong., 2d Sess. (1992)