Understanding Carbon Offsets

Joint Implementation

Joint Implementation worked similarly to CDM, with the exception that the host country was not a low and middle-income nation but another Annex I (developed) country. The tradable units from JI projects were called Emissions Reductions Units (ERUs).

Type of Standard and Context

Joint Implementation (JI), like the CDM, was a project-based mechanism under the Kyoto Protocol. It is limited to transactions between countries that have commitments to limit or reduce their national inventory GHG emissions under the Kyoto Protocol. The goal of the program was to increase market efficiency by allowing industrialized countries to invest in GHG abatement projects in another industrialized or EIT country.

Standard Authority and Administrative Bodies

JI distinguished between Track 1 and Track 2 projects. Track 1 projects were approved by their respective host countries. Projects that follow the Track 1 auditing procedure established by their respective host country governments were located in countries that meet all the eligibility requirements for participating in the JI program and were thus authorized. Track 2 projects must be approved by the Joint Implementation Supervisory Committee (JISC). Track 2 projects are located in countries that either do not fully comply with the eligibility requirements for participating in the JI program or meet the eligibility requirements, but have voluntarily chosen to use the Track 2 verification procedure under the JISC. ERUs were issued and transferred by the host country under both the Track 1 and Track 2 auditing procedures.

The JI track 2 program was supervised by the Joint Implementation Supervisory Committee (JISC). The JISC was supported by an expert panel for the accreditation of independent auditors (JI Accreditation Panel) and was ultimately accountable to the governing body of the Kyoto Protocol, which included representatives of all countries that ratified the treaty.

Within each industrialized and EIT country, there was a Designated Focal Point (DFP) that served as the nodal agency responsible for administering JI activities within its jurisdiction.

Regional Scope

The JI scheme was international in its scope, but only industrialized and EIT countries that ratified the Kyoto Protocol could host JI projects and issue the carbon credits (ERUs) generated from the projects.

Recognition of Other Standards/ Linkage with Other Trading Systems

As in the case of the CDM, although the avoided emissions or enhanced removals of other crediting programs cannot be used under the JI program, other compliance programs, such as the EU ETS, either recognize or accept JI ERUs under their programs.