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ACTIVITIES IMPLEMENTED JOINTLY (AIJ)

List of Programmes

Swiss AIJ Pilot Program

1997 Report of activities to the UNFCCC

The following report follows the uniform reporting format for national programs on activities implemented jointly under the pilot phase (Annex IV of document FCCC/SB SBSTA/1997/4).

1 Designated national authority for activities implemented jointly

1.A Please fill in if not already communicated or if changes have occurred:

2 Description of programme structure and features:

Switzerland announced at the Second Conference of the Parties to the UNFCCC in July 1996 its intention to participate in the pilot phase for activities implemented jointly. A Secretariat to manage the day-to-day operation of the Swiss AIJ Pilot Program (SWAPP) took up its work full-time in April 1997, and the Interministerial Committee for AIJ/JI that has decision-making responsibility for the SWAPP approved an official "Program Overview" for the SWAPP (objectives, activities, management structure) at its first meeting on 22 May 1997.

Objectives

Given the current status of the international AIJ pilot regime and taking into consideration national circumstances, needs and resources, the objectives of the Swiss AIJ Pilot Program are:

1. ultimately, to contribute to reducing greenhouse gas emissions and implementing the UNFCCC;
2. to assess the potential for and the cost-effectiveness of the AIJ/JI instrument within the framework of Swiss climate policy;
3. on the basis of AIJ investment projects, to contribute to the development of credible methodologies for determining and verifying emissions reductions achieved via AIJ projects;
4. to implement exemplary AIJ projects that clearly demonstrate real, additional environmental benefits, as well as local benefits to the host country (demonstration of "best practice" JI projects);
5. to promote the transfer of technologies to limit greenhouse gas emissions, with a view to encouraging private sector investment;
6. to devise, evaluate and implement potential incentive mechanisms to encourage private sector AIJ transactions.

Switzerland hopes to play a significant role in setting the standard for quality AIJ projects, by capitalizing on our technology and know-how resources and responding to the priorities of host country partners.

Activities

 The Swiss AIJ Pilot Program is designed to function on a flexible, "learning-by-doing" or "project-by-project" basis and will encompass a broad range of activities:

1. Government financing of AIJ projects

The Swiss government aims to provide financial support for the AIJ component of at least four investment projects during the pilot phase. In most cases, these projects will be identified through bi- and multi-lateral channels already in place for Swiss government cooperation with developing and central & eastern European countries. For this reason, an open "call for proposals" from the private sector is not envisioned.

2. Designing incentives for private sector investment  

One of the main objectives of the SWAPP is to encourage private sector investment in the AIJ component of greenhouse gas reduction projects (e.g., in the form of co-financing), even though the most obvious incentive - crediting - is explicitly denied during the pilot phase. Initiating a dialog with private actors to develop the necessary incentives is a priority for 1997.

3. Exploration of investment funds for AIJ/JI

The Swiss government is currently considering the possibility of contributing to dedicated international investment funds to finance AIJ projects and is seeking ways to support AIJ projects via financial intermediaries (e.g., bilateral, "green" venture capital funds).

4. Contribution to methodological progress

 In parallel with the implementation of AIJ investment projects under the Swiss Program and in cooperation with partner (host) countries, an effort will be made to find operational solutions to the various methodological challenges associated with the AIJ/JI instrument. Actions might include studies by consultants or NGOs, support for methodological workshops, reviews of experience with AIJ or case studies of existing projects ("simulation studies").

5. Capacity-building activities, networking and information

 The AIJ pilot phase, by nature, will be a learning experience for all participants, and capacity-building activities will be an integral component of the SWAPP. Domestically and in dialog with potential host countries, the targeted dissemination of information concerning the AIJ pilot phase, the JI instrument and the Swiss AIJ Pilot Program to the private sector and NGO communities is a high initial priority.

Program management

An Interministerial AIJ/JI Committee (IC-AIJ/JI) carries decision-making responsibility for the SWAPP. In particular, the IC-AIJ/JI must approve AIJ projects and all reports to the UNFCCC concerning the SWAPP. The IC-AIJ/JI includes representatives from the Swiss Agency for Development and Cooperation; the Federal Office of Environment, Forests and Landscape (the lead agency for climate policy in Switzerland); the Federal Office of Energy and the Federal Office for Foreign Economic Affairs, which chairs the body.

A small secretariat coordinates the day-to-day operations of the Swiss AIJ Pilot Program and serves as the contact point for all information regarding the SWAPP. The secretariat is also responsible for developing any guidelines and procedures required within the framework of the SWAPP, for assisting with the preparation of AIJ projects and for tracking their implementation.

3 Process for obtaining approval

3.A Brief description of procedure:

As we do not envision general solicitation of project proposals from private sector developers, decisions on project approval will be taken on a case-by-case basis by the IC-AIJ/JI. Transparent procedures for project approval, monitoring, reporting and verification will evolve during the pilot phase. The project selection criteria described below - along with the "uniform reporting format" adopted by the SBSTA in March 1997 - will serve as a basis for decisions on Swiss activities within the AIJ pilot phase.

3.B List all criteria for national acceptance of an activity implemented jointly:

Criteria that support decision 5/CP.1:

The SWAPP has adopted the same basic criteria approved by the Conference of the Parties to the UNFCCC in April 1995 for projects during the international AIJ pilot phase, namely:

1. AIJ should be compatible with and supportive of national environment and development priorities and strategies and contribute to cost-effectiveness in achieving global benefits;
2. All AIJ under the pilot phase require prior acceptance, approval or endorsement by Governments of Parties participating in these activities;
3. AIJ should 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;
4. the financing of activities implemented jointly ahall be additional to the financial obligations of Parties included in Annex II to the Convention within the framework of the financial mechanism as well as to current official development assistance (ODA).

Other criteria for national acceptance of AIJ:

Given the objectives of the SWAPP and taking into account time and resource constraints during the pilot phase, the SWAPP will concentrate on AIJ investment projects that:

1. limit emissions caused by energy production and end-use (e.g., fuel-switching to low- or no-carbon fuels, renewable energies, enhanced energy-efficiency);
2. can be easily monitored und verified (e.g., focus on projects that result in significant CO₂ reductions; no sink enhancement projects);
3. have demonstration character in the sense that (i) the estimated emission reductions are credible & robust and (ii) the project has the potential to be replicated;
4. are "no regret" (multiple benefits) and relatively cost-effective.

During the pilot phase, Switzerland will strive to find credible and user-friendly approaches to operationalizing these criteria, taking advantage of the previous and ongoing analytical work performed by other programs, institutions and individuals.

4 Summary of activities

4.A Summary of AIJ projects reported under annex I:

a) For example using IPCC classification: energy efficiency; renewable energy; fuel switching; forest preservation, restoration or reforestation; afforestation; fugitive gas capture; industrial processes; solvents; agriculture; waste disposal or bunker fuels.

b) Select the appropriate option: mutually agreed / in progress / completed

4.B Non-project activities:

The Swiss AIJ Pilot Program has just become operational; thus Switzerland is in the process of identifying AIJ projects. Concrete discussions are underway with Romania for the installation of combined heat and power plants in several Romanian cities, but neither the Swiss nor the Romanian governments have formally approved the project as an AIJ yet. Several other potential projects in eastern Europe and in developing countries are currently under evaluation.

A Memorandum of Understanding with the World Bank - which commits Switzerland to participating in a consultative group to explore the feasibility of establishing a carbon offset investment fund and to discuss the design, operational conditions and modalities of such a fund - was signed by the Swiss government on 24 June 1997.

In addition, the SWAPP is in the process of developing a Home Page and establishing a network of Swiss experts on AIJ/JI. By the end of 1997, it will also initiate a number of activities to address methodological issues and is planning AIJ-related capacity-building activities in host countries.