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5. International ERC Trading?
(References 6,9,10,11)
Both JI and CDM projects involve a host country and an investing country
(or an investing company within a country). Typically a host country or
entity within the host country will design a project to reduce greenhouse
gas emissions. The project will be reviewed under the rules of the UNFCC
and validated as a legitimate greenhouse gas reduction project. The host
country or entity will then seek out investors to fund the project. In
return for their funding, investors obtain the rights to some or all of
the resulting emission reduction credits.
As the project proceeds the accounting for emission
reductions will be audited by UNFCC certified companies so that the
emission reductions can be certified as
credits. It is very important that there is a willing host country both to
allow projects to proceed and to allow emission reduction credits from the
project to be claimed by the investor. The UNFCC maintains a list of those
willing countries. The UNFCC has developed offices to manage the
validation and accreditation
process for both JI and CDM projects.
Agricultural development projects in developing countries
could play an important role as CDM projects. The UNFCC recognizes the
potential for enteric methane
reduction in cattle and related species, as well as improved manure
management to reduce greenhouse gas emissions. Additionally they recognize
the potential
to enhance carbon sinks on agricultural land through land conservation
practices. The Kyoto Protocol specifically recognizes and will allow
agricultural emission reduction projects within the CDM process, but will
not allow agricultural sink projects during the first commitment period
(2008-2012).
Within the Kyoto Protocol there is not provision for
emission reduction trading with countries who are not signatories. Thus
the USA appears ineligible for international emission reduction credit
trading. Nevertheless the US has established their own domestic credit
trading system which may go beyond greenhouse gas emission reduction
credits to include other air, land or water
pollutant credits in the future. In addition the USA is currently
negotiating bilateral agreements with several developing countries whereby
the US would invest in projects in those countries in return for
environmental credits. |
