Distr.
GENERAL
FCCC/SBSTA/1997/12
30 September 1997
Original: ENGLISH
SUBSIDIARY BODY FOR SCIENTIFIC AND TECHNOLOGICAL ADVICE
Seventh session
Bonn, 20 - 29 October 1997
Item 8 of the provisional agenda
Paragraphs Page
I. INTRODUCTION 1 - 4 3
II. MAIN CONCLUSIONS 5 - 8 4
III. SYNTHESIS OF NATIONAL AIJ PROGRAMME REPORTS 9 - 11
6
IV. SYNTHESIS OF REPORTS ON AIJ 12 - 37 6
Description of Projects 14 - 25 7
B. Governmental acceptance, approval or endorsement 26
10
C. Compatibility with, and supportiveness of, national economic
development and socio-economic and environment priorities
and strategies 27 10
GE.97-
Paragraphs Page
D. Benefits derived from the AIJ project (D) 28 11
E. Calculation of the contribution of activities implemented
jointly projects that 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 (E) 29 - 33
11
F. Financing of activities implemented jointly (...) (F) 34 - 35
12
G. Contribution to capacity building, transfer of environmentally
sound technologies and know-how (...) (G) 36 13
H. Additional comments, if any, including any practical experience
gained or technical difficulties, effects, impacts or other
obstacles encountered 37 13
1. The Convention stipulates that efforts to address climate
change may be carried out cooperatively by interested Parties. By its
decision 5/CP.1, the Conference of the Parties (COP), at its first
session, decided to establish a pilot phase for activities
implemented jointly (AIJ) among Annex I Parties and, on a voluntary
basis, with non-Annex I Parties that so request.
2. Through the same decision the COP requested the Subsidiary Body for Scientific and Technological Advice (SBSTA) and the Subsidiary Body for Implementation (SBI) to prepare, with the assistance of the secretariat, a synthesis report for consideration by the COP
(decision 5/CP.1, para. 2(c)). On this basis, the COP shall, at its annual session, review the progress of the pilot phase with a view to taking appropriate decisions on its continuation
(decision 5/CP.1, para. 3(a)). "In so doing, the Conference of the
Parties shall take into consideration the need for a comprehensive
review of the pilot phase in order to take a conclusive decision on
the pilot phase and the progression beyond that, no later than the
end of the present decade" (decision 5/CP.1, para.
3(b)).
3. The present document contains a synthesis prepared by the
secretariat in response to the request by the COP and is intended to
support the SBSTA and the SBI in the preparation of their synthesis
report and recommendations to the COP. This synthesis is based on
reports by Parties on national programmes for AIJ under the pilot
phase as well as on specific AIJ.
4. In accordance with the criteria for reporting under the AIJ pilot phase, this synthesis reflects only those AIJ for which reports have been received, either jointly or separately, from all designated national authorities (DNA) of Parties participating in an activity as indicated in
annex IV of document FCCC/SBSTA/1996/8. For an activity to be
considered as an activity implemented jointly under the pilot phase,
it needs, at least, to be reported as being accepted, approved or
endorsed by all the DNAs involved. Table
1(1) contains the list of activities
implemented jointly. It is noted that the list differentiates, with
the help of the column entitled "Report submission", between reports
that have been submitted in time for consideration in this synthesis
(39 activities) and those which were submitted after the deadline (23
activities, identified by an "x" in the "1997 late" sub-column only).
Three AIJ of the 39 considered in this synthesis were only reported
as accepted, approved or endorsed. Of the 39 AIJ, 25 were reported in
accordance with the Uniform Reporting Format (URF) adopted by the
SBSTA at its fifth session in March 1997, and 11 AIJ, submitted prior
to that adoption, in accordance with the initial reporting framework.
The existence of two different formats, and the fact that Parties had
only a few weeks between March and the submission deadline of 30 June
1997 for preparing reports in accordance with the URF, account for a
certain lack of homogeneity in the scope and detail of reporting by
Parties.
5. The participation of Parties in AIJ programmes and activities,
which fully satisfy the criteria established by the COP, is slowly
expanding. Twelve Parties submitted reports on national programmes
for AIJ under the pilot phase in 1997, twice as many as in 1996. A
similar trend is discernible for AIJ. With stricter reporting
standards in effect, duly endorsed reports for consideration in the
synthesis report were submitted on 39 activities, involving 11
countries. Yet, even though this is a limited base for drawing
conclusions, a gradual expansion of activities which meet all AIJ and
reporting criteria is discernible.
6. Since many programmes and activities are at an early stage,
most Parties are still in the process of gaining experience. Their
reports are, therefore, necessarily limited in coverage. A detailed
consideration of the programmes and activities on which reports were
received allows, however, some preliminary conclusions. They are as
follows:
(a) The bulk of current AIJ is between Annex I Parties, with host countries being economies in transition (EIT). Only two non-Annex I Parties have AIJ programmes involving ten activities. Nine are in Latin America and the Caribbean and one is in Africa. The regional concentration is even more pronounced considering that, of a total of 39 activities, 18 involve the same two Annex I Parties (Estonia and Sweden) and that one country in the Latin American and Caribbean region (Costa Rica) hosts eight of the ten activities, including those in
non-Annex I Parties;
(b) The total amount of greenhouse gases (GHG) estimated to be
reduced or sequestered by 39 activities considered is distributed
over the various types of activities. Six forestry preservation and
afforestation activities account for 57 per cent of the abatement
impact and 34 per cent are attributable to one fugitive gas activity.
Twenty-nine activities related to energy account for 9 per cent of
the GHG abatement effect. Most AIJ under the pilot phase are
relatively small in terms of investment and their individual
contribution to GHG abatement is limited. A more significant effect
would, however, be achievable through the replication of such
projects;
(c) At this early stage of the pilot phase, most data on the costs
and the amount of GHG abated are only estimates and are, therefore,
not a suitable basis for analysis;
(d) The financing sources of AIJ are often described in detail. In
some cases, funding for reported AIJ does not seem to be secured. In
cases of multiple sources of funding, it appears important that
reports establish financial additionality with regard to the
financial obligations of Annex II Parties within the financial
mechanism, as well as current official development assistance
flows;
(e) Participating Parties use the pilot phase to gradually acquire
procedural and institutional experience while achieving mitigation
effects. Investor as well as host Parties have gained experience, for
example in the application of criteria in support of decision 5/CP.1,
and have developed additional criteria to reflect national
priorities. Host Parties which set up an AIJ unit appear to be
successful in attracting financial resources and in ensuring their
utilization in priority areas of national development. An increasing
number of Parties are designating national focal points for AIJ and
indicating interest in technical workshops, seminars and conferences
on AIJ;
(f) Parties, however, appear to be approaching the pilot phase
cautiously. Information on the AIJ mechanism is insufficiently
disseminated in developing as well as developed countries, and
incentives appear inadequate. This may explain the hesitation of the
private sector to invest in a significant manner.
7. The reports which have been considered for this synthesis
report show variations in structure and coverage. This variability in
reporting quality may be due to the relatively short time available
to Parties for preparing the reports in accordance with the URF
and/or the possible lack of guidance as to the level of detail
expected. The development of guidelines providing definitions of
terms, descriptor lists and specification of reporting requirements
could prove useful. The following specific problems were
encountered:
(a) Environmental, social/cultural and economic benefits are
generally not described in a detailed manner. Virtually no negative
impacts are reported. Some Parties, being aware of this limitation,
indicated that future reports would be more specific, and that
resources would be allocated to provide improved information;
and
(b) The basis for calculating costs and GHG mitigation effects is
often insufficiently explained. Further, definitions of the costs of
the AIJ component and other reporting items, such as the lifetime of
the activity and technical data, are not consistent. While the
essential methodological elements for calculating GHG reductions are
stated, the information supplied by Parties does not always allow
replication.
8. The information received reveals the need to further clarify the approaches to the methodological issues adopted by the SBSTA at its fifth session. These include:
(a) determination of environmental benefits; (b) modalities for
measurement, reporting and assessment; (c) endogenous
capacity-building; (d) transfer of environmentally-sound technologies
and know-how; (e) considerations of costs; (f) modalities for
mutually beneficial incentive structures for involved Parties,
acknowledging that there are no credits under the pilot phase; and
(h) institutional arrangements.
9. Parties are invited to submit information using the URF for national programmes on AIJ under the pilot phase, including contact information for the DNA for AIJ, descriptions of the programme structure and features as well as the process for obtaining approval including procedure and criteria, and a summary of activities. In order to compare main features of various national programmes, summarized information on key aspects is presented in tables 1 and 2. Detailed information contained in those programme reports, which were received in electronic format, is available on the UNFCCC world wide web site(2) and through the UNFCCC CD-ROM.
10. Of the nine Parties which submitted AIJ programme reports for
this document, six did so for the first time (Costa Rica, Japan,
Mexico, Poland, Sweden and Switzerland) while three Parties provided
updates of the programme reports submitted in 1996 (Germany, Norway
and the United States of America). Those Parties for which no updates
were received are marked with an asterisk (Australia, Canada and the
Netherlands).
11. All twelve Parties report to have developed criteria which
emphasize certain aspects of the pilot phase. Eleven Parties state
that emission reductions, and, in that context, baseline
calculations, must be verifiable. Four Parties require that proposals
contain verification and/or monitoring plans. The periodic
reassessment of the emission reductions and their estimates, as well
as the sustainability of emission reductions, are criteria for six
Parties, respectively. Eight Parties require the explicit analysis of
environmental impacts. Social impacts are specifically taken into
consideration by five Parties. Three Parties mention the need for
training components to be included in AIJ. One host Party indicates
that while AIJ comprising exclusively technical assistance, education
or training activities are valuable forms of foreign aid, they may
not qualify as joint implementation activities. Concerning their
special focus during the pilot phase, two Parties point to emission
reduction activities and one Party to small, quickly implementable
activities. One host Party focuses on new financial mechanisms to
direct AIJ.
12. The synthesis covers 39 AIJ for which reports were submitted prior to the deadline of
30 June 1997. Regarding three activities, only the approval,
acceptance or endorsement by all the designated national authorities
involved has been reported. Eleven reports were submitted prior to
the adoption of the URF.
13. The reports are summarized in accordance with the structure of
the URF. The headings hereafter reflect the respective URF heading
followed by the URF section number in brackets.
14. Table 1 contains the list of activities implemented jointly.
Each activity listed has been reported as accepted, approved or
endorsed by the relevant DNAs involved. This list shows the AIJ
considered in this synthesis as well as those activities for which
information, in accordance with the reporting criteria, has been
submitted after the deadline.
15. The number of reported participants per activity range from two to six. The participants involved in the activities included academic institutions, private sector enterprises,
non-governmental organizations, governmental agencies, the World Bank (WB) and the
Global Environment Facility (GEF). The functions within the AIJ
described for the host country participants included: acting as a
government contact for activity implementation, ownership of the
facility at the activity site, local investor and developer, agencies
that are responsible for reporting on and implementing AIJ, emissions
testing, and activity evaluation. The functions of the investor
country participants focussed primarily on financial and technical
roles. The specific functions listed for the investor country
participants included: management and administration of the AIJ,
financing of the monitoring costs, scientific monitoring, project
management/transfer of know-how, and technical support. However, no
detailed standard information regarding the role and activities of
the participants is available.
16. The following details are to be reported in this section: (a) a general description of the activity; (b) a classification of activities by type; (c) an identification of the location;
(d) an expected starting and ending date as well as the lifetime of the activity, if different;
(e) the present stage of the activity; and (f) technical
data.
17. In accordance with the sectors identified by the IPCC,
activities can be classified as follows: 10 in energy efficiency, 17
in renewable energy, 2 in fuel switching (1 in the transport sector,
and 1 in the energy sector), 4 in forest preservation restoration, or
reforestation, 2 activities on emissions/sequestration from
afforestation and 1 in fugitive gas capture were reported. To date
none of the following types have been reported on: industrial
processes, solvents, agriculture, waste disposal or bunker
fuels.
18. Figure 1 below shows the total number of activities of a specific type related with the share of GHGs reduced or sequestered, expressed in CO2 equivalent. It is noted that 3 activities did not provide data used for this comparison (one in each of the following types: energy efficiency, fugitive gas and forest preservation restoration, or reforestation); 6 forestry preservation and afforestation activities account for 57 per cent of the GHG abatement impact, while 34 per cent is attributable to one fugitive gas activity; 17 renewable energy activities account for 2 per cent of the GHG abatement effect; 2 fuel switching activities account for
3 per cent and 10 energy efficiency activities account for 4 per
cent of the total GHG abatement effect. It may be noted that two
Parties have cooperated in a significant number of activities showing
a pattern of replication: six activities in energy efficiency (mainly
improvement of municipal/district heating systems) and 12 activities
in renewable energy (conversion to bio-fuel boilers).
19. The geographical distribution of the activities is still not very balanced. Activities are being carried out, or have been proposed, in several non-Annex II countries and regions, including Burkina Faso, Costa Rica, the Czech Republic, Hungary, Latvia, Mexico, Poland, Romania and the Russian Federation. Of the 39 activities reported, 28 were in economies in transition (EIT), one was in Africa (AFR), and ten in Latin America and the Caribbean (LAC). Another way of looking at the geographical distribution is by type of activity. It appears that activities in the areas of energy efficiency, renewable energy, fuel switching and fugitive gases are mainly implemented in EIT countries while forestry-related activities are mainly implemented in LAC countries (see Figure 2 below).
20. Concerning the stage reached by the activities, reports showed
a variety of divergent interpretations of descriptors provided for in
the URF thus demonstrating that a more differentiated and better
defined list may be needed. Out of 25 activities, 2 were reported
mutually agreed, 4 were in progress, and 19 were completed. For the
remaining, either no information was available, or reports had been
submitted prior to the adoption of the URF.
21. Concerning starting date, ending date and lifetime of the activities, it is to be noted that clearer guidance is required with regard to the definition of the respective information items. The length of time between starting and ending date differs in most cases from the lifetime of the activity. The lifetime of the activities ranged from below 5 to 25 years, with 5 activities in the below 5 year range, 20 activities in the 6-10 year range, 2 activities in the 11-15 year range,
3 activities in the 16-20 year range, and 6 activities with a
lifetime of more than 20 years.
22. The information on the technical data showed a lack of guidance with regard to the expected kind of information and its level of detail. Information provided as technical data included: (a) carbon equivalent calculations regarding the forest to be preserved; (b) policy issues in the conversion from coal to gas; (c) calculations of improved efficiency goals for the activity;
(d) data on the energy production; and (e) emissions of energy plants and vehicles such as buses.
23. All activity reports provided information regarding the determination of cost for the activity. The URF requests information under an item worded, "AIJ component in US$". Some activity reports provided information on this item on an annual basis. It seems that this item requires a clearer definition or should be reformulated for clarity. Only a few of the reports described the method of their calculations and the data support for the calculations was not consistently provided.
24. Some activity reports described the roles/activities of host
country organizations in mutually agreed assessment procedures. Most
activities reported local and/or national organizations as
responsible for the majority of the scheduled data collection for the
activities.
25. With regard to measurement, responsibilities were assigned to
national and municipal institutions of the host country and, in some
cases, to private organizations of the host country. Assessments were
commonly carried out by national public and private organizations of
the host country, yet, in one case, by a private company of the
investor country. The responsibility to report on AIJ to the DNA was
assigned, in some cases, to a private company of the investor
country, and in other cases, to private or public organizations in
the host country, sometimes with initial support from the investor
country organizations. In one case the investor Party provided
scientific support to those involved in measurement, reporting and
assessment in the host countries.
26. At the moment of finalization of this document, a total of 62
AIJ activities have been reported to the secretariat. That is, all
activities have received endorsement by the designated national
authorities for activities implemented jointly. For 59 activities,
reports have been submitted jointly, that is, one Party submitted the
report with the concurrence of the other designated national
authority involved in the activity. No separate reports have been
submitted for the same AIJ by involved DNAs. Three activities have
been reported as approved, accepted or endorsed, but no report has
been submitted, and are considered in the present synthesis, where
appropriate.
economic development and socio-economic and
environment priorities and strategies
(C)
27. In this section, Parties are invited to report, to the extent
possible, whether AIJ are compatible with, and supportive of,
national economic development and socio-economic and environment
priorities and strategies. The answers are of various types, and
again vary in detail. Some Parties state that the activity is in
accordance with, or in support of, a specific national policy. Other
Parties describe the national characteristics in a specific sector
and how the activities support sector-specific policies at the local
or national level. Another group describes the national policy and
relevant selection criteria for activities that are in support of
such a policy. Some examples of policies or strategies mentioned are
sustainable development goals in the areas of forestry and land-use,
energy policies, transport policies, and trade balance issues in
traditional and non-traditional goods.
28. Qualitative and quantitative information was provided
regarding environmental, social/cultural and economic benefits.
Nearly all Parties stated benefits in each category, often with
quantitative data for environmental benefits for GHG reduction and
naming other reductions including SO2, NxO and
particles. Some Parties included other environmental benefits, such
as fostering biodiversity, improving water quality and reducing
erosion of hydrological resources. The majority of the reports
indicated social/cultural benefits, including active involvement of
local communities, increased public awareness, maintenance of natural
heritage and historical sites, as well as cleaner air. The economic
benefits were stated in terms of savings on energy, improved working
environment and economic opportunities through the introduction of
new technologies. A few Parties included the development of local
production capacity through the involvement and/or establishment of
local enterprises.
that 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
(E)
29. The description of the project baseline (baseline) was, in
most cases, brief. Some Parties reported baselines that assumed no
change in the level of activity, for example, assuming a static,
energy/heat consumption over the lifetime of the activity. Other
Parties reported a continuation in present trends, for example,
assuming declining carbon stocks or unsustainable energy consumption
patterns. Assumptions, in some cases, imply that there would be no
technological advance or energy efficiency improvements in the
absence of the AIJ activity over its lifetime or duration. In one
case, the activity was analysed with four possible alternative
scenarios for a baseline, depending on the market penetration of a
more efficient product. In that case, the future GHG emissions
reductions were computed with an "average scenario". The alternatives
were not described in detail in the submission received.
30. The description of the scenario and the methodologies applied
to calculate the emissions avoided or sequestered were brief. In some
cases, secondary effects of implementing an activity were indicated.
For example, if in a cogeneration scheme renewables were to replace
oil or coal, gas would still be needed for generating the heat
component.
31. Due to the early stage of the pilot phase, only a few of the
reports provided data for the actual emissions reduced. Only two of
the reports provided the projected emission reductions table with
yearly calculations for the lifetime of the activity, while the rest
of the reports offered yearly data only for the first two years and
the last year. The calculations of projected and actual emissions
reductions focused primarily on CO2. One activity included
calculations of emissions reductions for CH4 and
N2O, and another activity calculated the emissions
reductions of CO, THC (total hydrocarbons), NOx, and
particle matter (PM).
32. A smaller number of the activity reports provided sufficiently
detailed data to allow for the calculations to be easily reproduced.
However, most of the calculations for emissions reductions were not
described in adequate detail to allow for their
replication.
33. Some of the aspects related to the identification of the
baseline and the activity scenario such as system boundary and
leakage were, in most cases, not sufficiently addressed.
34. The involvement of private investment is still relatively low.
In several cases, public funds, especially those established in
addition to present official development assistance and contributions
to the financial mechanism of the Convention, are made available to
activities. One Party uses its fund mainly as a revolving fund. It
finances the technical assistance and capacity building activities
aspects in the form of grants, and the remaining elements, through
loans to the host country entities at a preferential rate. The dues
by the host are reinserted in the fund when paid.
35. Some activities involved funding by the GEF. The reasoning for acceptance by host and investor Party are that the AIJ component of the project is an add-on to a project which was to be implemented anyhow. The aim of the additional finance is to enhance the impact of a specific project. For example, the additional funds are used to install more gas boilers (in replacement of existing coal-fired boilers) than envisaged by the GEF project alone. Another example is the use of those funds to enable the host Party to subsidize the purchase of a larger number of
high-efficiency light-bulbs than envisaged in the GEF project,
thereby enhancing the chances of success of a demand-side management
project.
G. Contribution to capacity building, transfer of environmentally sound
technologies and know-how (...) (G)
36. Generally all reports mentioned that the activity, in one form
or the other, contributed to capacity building, transfer of
environmentally sound technologies and know-how. The list, hereafter,
provides examples of such contributions:
(a) The sale of a non-traditional good, in this specific case,
certified tons of carbon reduced or sequestered, by the host country,
is combined with raising awareness and understanding, at the
community and individual level, of how to integrate so-called
externalities in the economic reasoning, and thereby create a supply
market for a non-traditional good;
(b) Favourable loan conditions for the host country provide for
favourable conditions for the transfer of energy technologies. In
combination with, among other measures, training and stimulation of
network building between participants in different activity sites,
these kinds of activities aim at stimulating and enhancing the
replication conditions for the respective technology;
(c) Mainly locally available technology is applied in the
activity, thereby strengthening the in-country transfer of know-how
to that technology. The same activity includes training by local
experts of national energy officers at the community
level;
(d) Transfer of a new technology, including training, to local
producers enabling them to produce and maintain the new
product;
(e) Transfer mobile emission and fuel consumption monitoring hardware and
know-how to a national energy provider with the aim to optimize
the national power production; and
(f) Enhance national and local capacities in the area of
sustainable forest management, carbonization and cooking stoves
technologies as well as PV systems.
technical difficulties, effects, impacts or other
obstacles encountered (H)
37. Most of the additional comments are activity-specific, ranging
from technical difficulties, such as the choice of electrical
voltage, or co-ordination of suppliers and water supply quality, to
the threat to activity implementation for lack of additional funding.
In addition, training and capacity-building to maintain, service and
manage technologies were considered important.