Joint Implementation and double deduction of credits by the linkage with the EU ETS

Abstract

The EU has eventually met its GHG emission reductions target set under the Kyoto Protocol implementing its national binding reduction policies and 3 auxiliary mechanisms. At present, the JI projects are fewer than those of the CDM in number. Yet, given the fact that the JI is between the AnnexⅠgroup that consists of the OECD states and states with economies in transition and that non-EU european states are expected to become the state with economies in transition and join the EU, The JI is forecast to ratchet up, and so is the number of the research on it. Corresponding to the status quo, the paper, firstly, aims to analyze and spell out clearly the overall facts with respect to the JI. It encompasses its origin, mechanism of the functioning, legal ground and initial experiences. Subsequently, the latter section of the paper in part deals with the project cycle, the roles of the relevant primary bodies and the JI approval procedures depending on track. Secondly, the current status of the mechanism will be laid out along with some rationals to back it up. Thirdly, the paper takes aim at digging out the issue of double deduction, one of the most significant knotty issues triggered by the linkage between the JI and the EU ETS and coming up with the approachable solutions. The deduction of the ERUs from AAUs for the reductions of the relevant GHG emissions by investor state in JI runs the risk of the double deduction when the JI project is covered by the EU ETS as the equivalent amount of the ERUs from the reserve for JI from EUAs is to be deducted. The knotty issue makes for miscalculation and a misleading element in keeping the track of the inventory of the emissions and the sinks. The cancellation of the either of the credits, ERUs from AAUs or the ERUs from the reserve of the EUAs, can be a possible approach to work it out in some cases.