Ecological Economics 32 2000 255 – 267
ANALYSIS
Activities implemented jointly: another look at the facts
Reimund Schwarze
,1 Center for En6ironmental Science and Policy, Stanford Uni6ersity, Stanford CA
94305
, USA Received 28 December 1998; accepted 20 July 1999
Abstract
The first Conference of the Parties to the United Nations Framework Convention on Climate Change in Berlin established a pilot phase of so-called Activities Implemented Jointly AIJ. This pilot phase started in 1995 and was
to end in 1999. It was prolonged at the fourth Conference of the Parties in Buenos Aires 1998 for a yet undetermined period after 2000. This paper is an empirical study of AIJ experience in the first five years 1995 – 1999 based on 96
AIJ from the UNFCCC’s web site as of April 30, 1999, and a separate study on seven AIJ projects of Japan. The main results of this study are: 1 AIJ investment shows a pattern of regional-specificity with rather divergent regional
investment portfolios in the United States, Japan and Europe. This pattern can be traced back to differences in the national AIJ programs of investors and hosts, on the one hand, and to specific ways of minimizing transaction cost
on the other, e.g. by attaching AIJ to established institutional links of development co-operation or by ‘trading in the neighbourhood’; and 2 AIJs are overwhelmingly no regret-measures with almost zero or negative cost. Transaction
costs of reporting have been minimized by applying simple and straightforward methods of baseline determination. The exception to this is the verification procedure where expensive external verification prevails. © 2000 Elsevier Science
B.V. All rights reserved.
Keywords
:
International policy on climate change; Joint implementation; Activities implemented jointly; Empirical analysis www.elsevier.comlocateecolecon
1. Introduction
The first Conference of the Parties CoP1 to the United Nations Framework Convention on
Climate Change UNFCCC in Berlin 1995 es- tablished a program of so-called Activities Imple-
mented Jointly
AIJ. Under
this program,
greenhouse gas
reduction and
sequestration projects can be carried out through partnerships
between an investor from a developed country and a host from a developing country or a coun-
try with an economy in transition.
2
The purpose of this program is to enhance the transfer of
Tel.: + 1-650-723-2300.
1
I am indebted to Achim Czerny for his excellent research assistance and to Rieko Matsuura for providing me with
comprehensive information on the AIJ of Japan. Helpful comments and suggestions on an earlier version of this paper
came from John-O Niles and Peter Zapfel as well as two anonymous referees of this journal. Financial support for this
study from the Thyssen-Foundation is gratefully acknowl- edged.
2
Countries with economies in transition EIT are central and eastern European countries and states of the former
Soviet Union that are in a transition to a market economy. 0921-800900 - see front matter © 2000 Elsevier Science B.V. All rights reserved.
PII: S 0 9 2 1 - 8 0 0 9 9 9 0 0 0 9 5 - 6
technology and know-how on global warming protection from developed to developing coun-
tries and to gather experience on the opportunities and obstacles for the joint implementation of
policies and measures to avert climate change. The AIJ experience will help to elaborate the
design of project-based mechanisms outlined in Article 6 and Article 12 of the Kyoto Protocol
KP, which are respectively known as Joint Im- plementation JI and the Clean Development
Mechanism CDM.
The Subsidiary Body for Scientific and Techno- logical Advice SBSTA of the UNFCCC was
asked to review the experience of AIJ and, with the assistance of the UNFCCC Climate Secretar-
iat in Bonn, to prepare a synthesis report on AIJ to the Conference of the Parties on a regular
basis. At the time of writing of this article the second report has been published UNFCCC,
1998. This report as well as the first report UN- FCCC, 1997a takes a descriptive and predomi-
nantly institutional look at the facts. It addresses mainly questions of reporting, assessment meth-
ods and procedures. This led me to do an inde- pendent study, which takes a more analytical
approach. In this study, I identify some additional information, e.g. on GHG mitigation cost. And I
correct some false general beliefs on AIJ, e.g. the belief in a lack of private participation. As an-
other new result, I discover a pattern of regional- specific
investment portfolios,
which differ
significantly between the US, Japan and European countries. These investment patterns can be traced
back to differences in the national programs on AIJ of investor and host countries UNFCCC,
1997b. These national programs set out the ob- jectives and criteria for government approval of
AIJ projects.
3
Another influence comes from the established national links of trade and general
development aid. Other issues discussed in this paper are the baseline issue and transaction cost.
2. The data
