The mechanisms in the current negotiations:

Clean development mechanism

The first meeting of the Parties to the Kyoto Protocol (CMP 1) adopted the  modalities and procedures for a clean development mechanism (CDM). Pursuant to that decision, the first review of the modalities and procedures for the clean development mechanism, was to be carried out by CMP 9.

CMP 9 requested the UNFCCC secretariat, drawing on the discussions that took place at the thirty ninth session of the Subsidiary Body of Implementation (SBI 39), and that were reflected in a note by the co-chairs, to prepare a technical paper on issues relating to possible changes to the modalities and procedures for the CDM, including their implications, for consideration at SBI 40 (see decision 4/CMP.9, paragraph 1).

At SBI 40, Parties made progress in their consideration as captured in the second note by the co-chairs, but could not come to conclusions on this agenda item. Parties will consider this matter at SBI 41.

Background documents listed above:
Modalities and procedures for a clean development mechanism (CDM) (decision 3/CMP.1)
Technical paper on issues relating to possible changes to the modalities and procedures for the CDM (FCCC/TP/2014/1)
Second note by the co-chairs

Joint implementation

Review of the joint implementation guidelines

CMP 1 adopted the guidelines for the implementation of Article 6 of the Kyoto Protocol (joint implementation (JI)).

In accordance with decision 6/CMP.8, SBI 39 (Nov. 2013) initiated the review of these guidelines and agreed to continue its consideration of this matter at SBI 40 (June 2014).

At SBI 40, Parties decided to continue their consideration of this matter at SBI 41 (Dec. 2014) on the basis of the draft decision text proposed by the co-chairs of the informal consultations on this agenda item and contained in the annex to document FCCC/SBI/2014/L.11.

SBI 41 agreed to continue considering this matter at SBI 42 (June 2015), on the basis of the draft decision text and its appendix proposed by the co-facilitators of the informal consultations on this agenda sub-item and contained in the annex to document FCCC/SBI/2014/L.34.

CMP 10, through its decision 5/CMP.10, requested the following work related to the review of the JI guidelines for consideration at SBI 42:

1. The secretariat was mandated to prepare a technical paper on the opportunities for cost savings and efficiencies for JI, learning from the experiences of the CDM, while recognizing the respective mandates of the two mechanisms;

2. Parties were invited to submit examples of voluntary technical approaches, designed by host Parties for their JI projects, that could assist the host Parties in achieving their quantified emission limitation or reduction commitments under the Kyoto Protocol. The secretariat was asked to prepare a synthesis report of these submissions;

3. The Joint Implementation Supervisory Committee (JISC) was requested to submit elaborated recommendations on the review of the JI guidelines.

Modalities for expediting the continued issuance, transfer and acquisition of joint implementation emission reduction units

Under the current guidance, an Annex I Party with commitments inscribed in Annex B to the Kyoto Protocol may issue, transfer and acquire emission reduction units (ERUs) under JI only after its assigned amount has been calculated and recorded, and its assigned amount units and removal units have been issued.

At CMP 8 (Dec. 2012), Parties requested the SBI through decision 1/CMP.8, to consider modalities for expediting the continued issuance, transfer and acquisition of ERUs valid for the second commitment period.

SBI 39 initiated its consideration of this matter and agreed to continue discussions at SBI 40.

At SBI 40, Parties decided to continue their work at SBI 41 on the basis of the draft decision text proposed by the co-chairs of the informal consultations on this agenda item and contained in the annex to document FCCC/SBI/2014/L.9. 

To further inform this consideration at SBI 41, Parties requested the secretariat to prepare a technical paper on any technical implications for the processes and systems under the Kyoto Protocol, including but not limited to reporting and review requirements under the Kyoto Protocol and the functions of the international transaction log, arising from the proposed modalities referred to in the draft decision text. In addition, the technical paper shall also contain information on budgetary implications, the current status of ratification or provisional application of the Doha Amendment and the status of the JI projects." The technical paper is available here.

SBI 41 agreed to continue discussing this matter at SBI 42 as referred to in the document
FCCC/SBI/2014/L.33.

Synergy relating to accreditation under the mechanisms of the Kyoto Protocol

CMP 9 requested the Joint Implementation Supervisory Committee (JISC) to submit elaborated recommendations on the JI accreditation system aligned with that of the CDM, taking into consideration decision 6/CMP.8, paragraph 15(b), for consideration by SBI 40.

SBI 40 considered the synergy relating to accreditation under the mechanisms established under Articles 6 (JI) and 12 (CDM) of the Kyoto Protocol, taking note of the recommendation from the JISC, and recommended a draft decision on this matter for consideration and adoption at CMP 10.

Countries with commitments under the Kyoto Protocol to limit or reduce greenhouse gas emissions must meet their targets primarily through national measures. As an additional means of meeting these targets, the Kyoto Protocol introduced three market-based mechanisms, thereby creating what is now known as the “carbon market.”  

The Kyoto mechanisms are:

• Emissions Trading
• The Clean Development Mechanism (CDM)
• Joint Implementation (JI)

The Kyoto mechanisms:

• Stimulate sustainable development through technology transfer and investment
•  Help countries with Kyoto commitments to meet their targets by reducing emissions or removing carbon from the atmosphere in other countries in a cost-effective way
• Encourage the private sector and developing countries to contribute to emission reduction efforts

JI and CDM are the two project-based mechanisms which feed the carbon market. JI enables industrialized countries to carry out joint implementation projects with other developed countries, while the CDM involves investment in sustainable development projects that reduce emissions in developing countries.

The carbon market is a key tool for reducing emissions worldwide. It was worth 30 billion USD in 2006 and is growing.

Annex I Parties must provide information in their national communications under the Protocol to demonstrate that their use of the mechanisms is “supplemental to domestic action” to achieve their targets. This information is assessed by the facilitative branch of the Compliance Committee

To participate in the mechanisms, Annex I Parties must meet, among others, the following eligibility requirements:

• They must have ratified the Kyoto Protocol.
• They must have calculated their assigned amount in terms of tonnes of CO2-equivalent emissions.
• They must have in place a national system for estimating emissions and removals of greenhouse gases within their territory.
• They must have in place a national registry to record and track the creation and movement of ERUs, CERs, AAUs and RMUs and must annually report such information to the secretariat.
• They must annually report information on emissions and removals to the secretariat.

Detailed eligibility requirements can be found under the respective decisions agreed by the CMP, as follows:

• ET eligibility requirements are reflected in in the Modalities, rules and guidelines for emissions trading under Article 17 of the Kyoto Protocol ( decision 11/CMP.1);
• CDM eligibility requirements are reflected in section F in the modalities and procedures ( decision 3/CMP.1);
• JI eligibility requirements are reflected in section D in the Guidelines for implementation of Article 6 of the Kyoto Protocol ( decision 9/CMP.1);

Businesses, non-governmental organizations and other legal entities may participate in the three mechanisms under the authority and responsibility of governments.