Cleantech Update

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...

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 ...

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 d...

The Clean Development Mechanism (CDM) is an arrangement under the Kyoto Protocol allowing industrialised countries with a greenhouse gas reduction commitment (called Annex B countries) invest in projects that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries. A crucial feature of an approved CDM carbon project is that it has established that the planned reductions would not occur without the additional incentive provided by emission reductions credits, a concept known as "additionality". The CDM allows net global greenhouse gas emissions to be reduced at a much lower global cost by financing emissions reduction projects in developing countries where costs are lower than in industrialized countries. However, in recent years, criticism against the mechanism has increased. The CDM is supervised by the CDM Executive Board (CDM EB) and is under the guidance of the Conference of the Parties (COP/MOP) of the U...

The Kyoto Protocol’s joint implementation (JI) mechanism has accredited its first third party verifier, TÜV SÜD Industrie Service GmbH , whose job is to determine the acceptability of emission reduction projects and verify emission reductions achieved. Under JI, greenhouse gas emission reduction projects in countries with an emission reduction or limitation commitment under the Kyoto Protocol can generate saleable emission reduction units (ERUs), each equivalent to one tonne of carbon dioxide. Countries can purchase and surrender ERUs to meet a part of their commitment under the Protocol. To date, 170 projects in 12 countries have been submitted for public comment, the first step in the vetting process before projects undergo “determination” by an accredited entity underso-called JI Track 2. These 170 projects are expected to achieve around 300 million tonnes of emission reductions by the end of the first commitment period of the Kyoto Protocol in 2012. The mechanism is supervised by t...