Project-based mechanisms

Project-based mechanisms, such as the Clean Development Mechanism (CDM) and Joint Implementation (JI) make it possible to reduce greenhouse gas emissions in other countries by means of projects, thereby offsetting our own emissions and fulfilling part of the Kyoto goal. In order for the reduction projects to have an effect on the climate on balance, they have to achieve real, measurable and long-term benefits and take place in addition to private or governmental carbon offset measures, which would in any case have to be taken (additionality).

Clean Development Mechanism (CDM) and Joint Implementation (JI)

The Clean Development Mechanism (CDM) allows industrialised countries or private institutions to invest in carbon offset projects in developing and emerging countries that don’t have their own emission reduction targets. In return, they receive tradable certificates (the so-called Certified Emission Reductions, CERs). This mechanism should at the same time make a contribution towards sustainable development of the host countries, particularly through the transfer of environmentally friendly technologies. The industrialised countries can appropriate CERs to achieve their reduction targets in accordance with the Kyoto Protocol. Since this effectively increases the available emissions allowances, additionality must be subject to strict requirements. CDM projects can also be used for the voluntary offset of CO2 emissions. Read more about the exact procedure of a CDM project!

In contrast to the CDM, Joint Implementation Projects (JI) are carried out in industrialised countries or emerging countries that likewise have reduction targets (Annex B countries). The project host country issues the certificates and must deduct these from its domestic emissions. Since this merely constitutes a transfer from one country to another, the total emissions allowed remains the same (zero sum game). The "JI host country" is usually an East-European country and exhibits fewer costs towards emissions reduction than the country that is making the investment. Certificates resulting from JI projects are called Emission Reduction Units (ERUs).

The Supervisory Committee, which has been active since February 2006, monitors the JI projects in accordance with these procedural rules. Certain countries may validate their own JI projects themselves as long as they meet certain standards. In general, the criteria for JI projects lean strongly towards the CDM criteria. Joint Implementation should also result in the transfer of modern technology into the host countries.

Considering the rapid growth and exponentially growing energy consumption in many developing and emerging countries, the flexible mechanisms of the Kyoto Protocol are future-oriented and, above all, quickly realisable instruments for encouraging clean development and a sustainable energy system. On the other hand, the CDM projects in particular are coming under heavy international attack. This might be because some of these projects do not sufficiently meet sustainable and social criteria, or possibly because the additionality was partially not present, or in general because it is feared that they will weaken the pressure on and the incentives for emerging countries to independently determine binding reduction targets. The uncertainties regarding the future climate regime are also reflected in the flexible mechanisms. However, it is assumed that this will at least continue in the EU. Appropriate reforms are being widely discussed at present.

myclimate thus campaigns nationally and internationally so that:

• additional quality standards are implemented, prescribing investment in high quality projects (such as the WWF instituted (Gold Standard). These projects must comply strictly with the requirements of additionality and meet sustainability criteria.
• these carbon offset projects are carried out in the poorest countries (Least Developed Countries) and that additional incentive schemes are defined for projects in the emerging countries.
• the flexible mechanisms (incl. the global Emissions Trading System) are rapidly developed internationally (sectoral and programmatic approaches).

myclimate guarantees that at least 80 percent of donations are channelled directly into carbon offset projects. The donations are implemented in carbon offset projects no later than within two years, i.e. only once it has been proven that the project is yielding a sustainable, additional CO2 reduction.

Further Information

Federal Office for the Environment (FOEN)