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
This study is based on AIJ projects that have been reported to the UNFCCC by designated
national authorities DNA and presented by the UNFCCC on its web-site as of April 30, 1999.
4
The source for the AIJ of Japan is a detailed report of the New Energy and Industrial Technol-
ogy Development Organization NEDO on seven mutually agreed AIJ projects NEDO, 1998.
Combined, this study consists of 103 activity re- ports on 143 projects
5
from 36 countries 27 host and 9 investor countries with a total of approxi-
mately 170 million tons Mt of emissions reduced at a total cost of approximately US 640 million.
6
Except for the Japanese projects, the data were taken as found in the standardized reporting for-
mats URF or USIJI-URD. No adjustments were made to this data even though there are
numerous deficits in the current DNA reports, e.g. great differences in the quality and the meth-
ods of reporting see Ellis, 1999. The ‘take it as you find it’ approach of this study can be justified
on two grounds. Firstly, any adjustments of the original data would have implied arbitrary report-
ing requirements and methods beyond the ones established by the Berlin Mandate. Secondly, the
results presented in this paper proved to be robust in two sampling experiments, one in which I
omitted 25 projects in the planning stage see below footnote 7, and another based on a smaller
sample of 96 projects Schwarze, 1998.
4
www.unfccc.defcccccinfoaij act and www.unfccc.defccc ccinfoaijact98.
5
Several UNFCCC-reports are on more than one project, e.g. the AIJ between Norway and Poland norpolOla, see App.
1 is on 21 projects of coal-to-gas boiler conversion. To make this information compatible with other more disaggregated
reports, e.g. on boiler conversion between Sweden and Estonia estsweOl-estswel6, see App. 1, I have changed the UNFCCC-
definition of projects ‘activities’ in this study to ‘projects as declared in the DNA-reports’. Resulting from this new defini-
tion of projects, my set of data contains 143 projects as compared to 96 projects considered by the UNFCCC.
6
A full list of the projects considered and their general characteristics is given in Appendix 1.
3
Government approval is a legal prerequisite for AIJ under the Berlin Mandate Decision 5CP.1. AIJ must be backed by
a mutual agreement between the host and the investor country known as ‘letter of intent’.
Fig. 1. Activity starting date.
the UNFCCC in Buenos Aires opened the door to prolong the pilot phase beyond 1999 for a yet
undetermined period Decision 6CP.4. Given this schedule, one might expect that AIJ would be
mainly pursued during the five-year period 1995 – 1999. As Fig. 1 reveals, a great number of projects
do not conform to this expectation. Looking at the project starting date, we find that 29 projects
were initiated before the program was introduced in 1995, and 16 projects have not been imple-
mented by now which implies that they will start on a date later than 1999. Only 98 projects or
69 were taken up during the AIJ period of the Berlin Mandate.
7
This picture becomes even more pronounced if we look at the project ending date. Here we find
that virtually all projects have a lifetime exceeding 1999. In fact, the average duration of projects is
31 years. Thus, the true effects of AIJ are largely realized outside the stipulated AIJ program pe-
riod. This evidence suggests that AIJ projects have been undertaken to a great extent indepen-
dent of the AIJ program and largely with the expectation that the pilot phase would be pro-
longed beyond 2000 or transferred into a program with crediting.
8
3
.
2
. Regional distribution of AIJ The 1998-report on AIJ by the UNFCCC UN-
FCCC, 1998 points out that ‘the geographical distribution of activities... shows a marked imbal-
ance’. This analysis confirms this view see Fig. 2:
3. The results
