KYOTO PROTOCOL MECHANISMS

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KYOTO PROTOCOL MECHANISMS

• EURASIA ??
• Solicitors and Advocates

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What is the Kyoto Protocol?

• The Kyoto Protocol is an agreement made under the
  United Nations Framework Convention on Climate
  Change (UNFCCC). Countries that ratify this
  protocol commit to reduce their emissions of
  carbon dioxide and five other greenhouse gases,
  or engage in emissions trading if they maintain
  or increase emissions of these gases to a 5.37
  less than 1999.

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KYOTO PROTOCOL PARTIES

• ANNEX 1 Countries
• Developed countries

• Non- ANNEX 1 Countries
• Non Developed countries

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Flexibility Mechanisms

• The Kyoto Protocol defines 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 benefit
  for the atmosphere is the same, wherever the
  action is taken.
• Under this system, the amount to which an Annex I
  Party must reduce its emissions over the five
  year commitment period (assigned amount) is
  divided into units each equal to one ton of
  carbon dioxide equivalent.

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Kyoto mechanisms are

• CDM Clean Development Mechanism.- 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.
• JI Joint Implementation.- an Annex I Party 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.

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The clean development mechanism (CDM)

• Provides for Annex I Parties to implement project
  activities that reduce emissions in non-Annex I
  Parties, in return for certified emission
  reductions (CERs). 
• The CERs generated by such project activities can
  be used by Annex I Parties to help meet their
  emissions targets under the Kyoto Protocol. 
• Such project activities are to assist the
  developing country host Parties in achieving
  sustainable development and in contributing to
  the ultimate objective of the Convention.

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Emissions trading (or cap and trade)

• Is an administrative approach used to control
  pollution by providing economic incentives for
  achieving reductions in the emissions of
  pollutants.
• A central authority (usually a government agency)
  sets a limit or cap on the amount of a pollutant
  that can be emitted. Companies or other groups
  that emit the pollutant are given credits or
  allowances which represent the right to emit a
  specific amount. The total amount of credits
  cannot exceed the cap, limiting total emissions
  to that level.
• Companies that pollute beyond their allowances
  must buy credits from those who pollute less than
  their allowances.
• This transfer is referred to as a trade. In
  effect, the buyer is being fined for polluting,
  while the seller is being rewarded for having
  reduced emissions. The more firms that need to
  buy credits, the higher the price of credits
  becomes -- which makes reducing emissions
  cost-effective in comparison.

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How de process works in South America

• In any Annex 1 Country the cost of reducing one
  ton a year of Co2 is USD 200-500.
• Specialized brokers seek projects in Non Annex 1
  countries to reduce emissions. The whole process
  takes 8 to 16 months.

1. Presentation of the Project Idea Note or PIN in
   the Ministry of the Environment or the related
   governmental organism.
2. The organism will issue the Project Design
   Document or PDD.
3. Audit of the process to certify the amount of Co2
   that will be reduced.

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Continuation of the Process on the United Nations
Development Programme or UNDP

• After checking that the process will reduce the
  projected Co2 over the next 6 years the UNPD
  emits the certificates.
• The Certificates may be negotiated by the owner.
• The ownership depends on the sponsor of the
  program. There are 3 kinds of ownership.

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Ownership of Certificates

• The company assumes every costs and risks and
  freely negotiates the Certificates at USD 15-20
  Ton/year, depending of the market prices.
• The company pre sells the Certificates and
  receives partial help from the buyer (country or
  broker) at USD 7-9 /ton/year
• The company pre sells the whole package and
  receives the agreed price USD 4-5 /ton/year.

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FINAL WORDS

• Because the market is constantly changing it is
  similar to a stock market.
• In order to have an attractive project it's
  required a minimum of 10.000 ton CO2 annually.

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THANK YOU!

• Please feel free to contact for any further
  details!