Report: Carbon Credits Under Kyoto Protocol Actually Increased Emissions

At the end of November, governments will come together in Paris to hammer out agreements for a successor to the Kyoto Protocol. Under the KP, there are two greenhouse gas (GHG) emissions offsetting mechanisms: joint implementation (JI) and the Clean Development Mechanism (CDM).

JI allows countries with emissions-reduction commitments under the Kyoto Protocol to generate Emission Reduction Units (ERUs) from GHG reduction projects and transfer them to other countries. Almost 872 million ERUs had been issued under JI as of March 2015, about a third of all Kyoto offset credits. In a nutshell, JIs are carbon credits and include things like reforestation projects.

Perhaps government heads should read this recent report by the Stockholm Environment Institute (SEI), which found that the use of JI actually may have enabled GHG emissions to be about 600 million tons of carbon dioxide equivalent (tCO2e) more than if countries had met their emissions targets domestically.

Ukraine, Russia, Poland and Germany have the highest ERU issuances. Those four countries have 439 projects registered and over 800 million ERUs issued, which account for 94 percent of ERU issuances. The report found “environmental integrity concerns” for over 80 percent of ERUs in Russia and Ukraine. By contrast, environmental integrity in Poland was rated at 70 percent and 97 percent in Germany.

That is troubling because, as the report points out, the design of JI should prevent that from happening. The whole point of JI is to reduce emissions. Each country with an emissions target receives allowances called Assigned Amount Units (AAUs) that are equivalent to its total emissions budget for the commitment period. A host country has to cancel one AAU for every ERU it issues. So, if a JI project is either over-credited or not additional, the host country would have to make up the difference with more mitigation action.

So, what went wrong? Several countries had emissions targets during the first commitment period that were well above their business-as-usual emissions. That caused large AAU excesses. When that happens, host countries can use surplus AAUs to cover their ERUs, which allows them to not take additional mitigation action -- allowing over-credited or non-additional JI projects to cause higher global emissions.

What’s the fix?

What can be done to fix the JI mechanism? The report recommends several things, including:

• Project cycle procedures should ensure full transparency with all documentation publicly available. That is needed because lack of transparency is a big concern in some JI host countries where full documentation for the projects is not publicly available.


• Only internationally accepted methodologies should be eligible for use. The trouble is that many projects applied their own approaches for additionality demonstration and the calculation of emissions reductions. In many cases, they ended up using inappropriate approaches.

Hammering out a good climate change agreement is important, and that includes fixing the problems with JI. Hopefully, the powers that be will take note

Image credit: Reforestation via Flickr