The Kyoto Protocol broke new ground by defining three innovative “flexibility mechanisms” to lower
the overall costs of achieving its emissions targets. These mechanisms enable Parties to access cost-effective
opportunities to reduce emissions, or to remove carbon from the atmosphere, in other countries. While the cost
of limiting emissions varies considerably from region to region, the effect for the atmosphere of limiting
emissions is the same, irrespective of where the action is taken.
Much of the negotiations on the mechanisms has been concerned with ensuring their integrity. There was concern
that the mechanisms do not confer a “right to emit” on Annex I Parties or lead to exchanges of
fictitious credits which would undermine the Protocol’s environmental goals. The negotiators of the
Protocol and the Marrakesh Accords therefore sought to design a system that fulfilled the cost-effectiveness
promise of the mechanisms, while addressing concerns about environmental integrity and equity.
All three mechanisms under the Kyoto Protocol are based on the Protocol’s system for the accounting of
targets. Under this system, the amount to which an Annex I Party (with a commitment inscribed in Annex B of the
Kyoto Protocol) must reduce its emissions over the five year commitment period (known as its “assigned
amount”) is divided into units each equal to one tonne of carbon dioxide equivalent. These assigned
amount units (AAUs), and other units defined by the Protocol, contribute the basis for the Kyoto mechanisms by
providing for a Party to gain credit from action taken in other Parties that may be counted towards it own
emissions target.
The three Kyoto mechanisms are:
- The clean development mechanism (CDM) defined in Article 12 provides
for Annex I Parties to implement projects that reduce emissions in non-Annex I Parties, or absorb carbon
through afforestation or reforestation activities, in return for certified emission reductions (CERs, tCERs
and lCERs) and assist the host Parties in achieving sustainable development and contributing to the ultimate
objective of the Convention. The CDM is
supervised by the CDM Executive Board.
- The basic principles of the mechanism commonly referred to as “Joint
Implementation (JI)” are defined in Article 6 of the Kyoto Protocol. Under JI, an Annex I Party
(with a commitment inscribed in Annex B of the Kyoto Protocol) may implement an emission-reducing project or
a project that enhances removals by sinks in the territory of another Annex I Party (with a commitment
inscribed in Annex B of the Kyoto Protocol) and count the resulting emission reduction units (ERUs) towards
meeting its own Kyoto target.
-
Emissions trading, as set out
in Article 17, provides for Annex I Parties to acquire units from other Annex I Parties. These units may be
in the form of AAUs, removal units (RMUs), ERUs, CERs, tCERs and lCERs.
The AAUs, RMUs, ERUs, CERs, tCERs and lCERs are the accounting units of the “assigned amount” of
each Annex I Party referred to in the provisions of Article 3 of the Protocol. Each unit is equal to one
metric tonne of emissions (in CO2-equivalent terms). AAUs are issued on the basis of the assigned amount
pursuant to Article 3.7 and 3.8 while RMUs are issued on the basis of land use, land-use change and forestry
(LULUCF) activities (often referred to as
“sinks”) under Articles 3.3 and 3.4. In accordance with Article 3.10 and 3.11, the issuance of
ERUs results in the cancellation of either AAUs or RMUs, in order that no overall impact on a Party’s
assigned amount is felt. Finally, CERs are the additions to assigned amount referred to in Article 3.12. More
information may be found on the assigned amount accounting
page.
At COP 7 (Marrakesh, October/November 2001), as part of the Marrakesh Accords, Parties completed a package of
decisions on the mechanisms and recommended it to CMP 1 for adoption. These decisions are largely based on
agreement reached on many difficult political issues at COP 6 part II (Bonn, July 2001) in the form of the
Bonn Agreements on the Implementation of the Buenos Aires Plan of Action.
Since COP 7, further decisions have been taken in relation to the Kyoto mechanisms and much work has been
undertaken to implement them. For further information, see the web pages on the individual mechanisms and on
registry systems.
At its first session, the CMP (CMP 1) adopted the ‘Marrakech Accords’ as well as all draft
decisions recommended by the COP.
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