Understanding Carbon Offsets

Joint Implementation

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

Type of Standard and Context

Joint Implementation (JI), like the CDM, is a project-based mechanism under the Kyoto Protocol. It is limited to transactions between countries that have commitments to limit or reduce their GHG emissions under the Protocol. The goal of the program is 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 distinguishes between Track 1 and Track 2 projects. Track 1 projects are approved by their respective host countries. Projects that follow the Track 1 verification procedure established by their respective host country governments are located in countries that meet all the eligibility requirements for participating in the JI program and are thus authorized to verify projects. 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 are issued and transferred by the host country under both the Track 1 and Track 2 verification procedures.

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

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

Regional Scope

The JI scheme is international in its scope, but only industrialized and EIT countries that have ratified the Kyoto Protocol can host JI projects and issue the emission reduction units generated from the projects.

Recognition of Other Standards/ Linkage with Other Trading Systems

As in the case of the CDM, although the emission reductions of other schemes cannot be used under the JI program, other compliance programs, such as the EU ETS, either recognize and accept JI emission reductions under their programs.