AIJ: Developing Countries' Perspectives


The level of trust and confidence between the industrialized parties to the UN Framework Convention on Climate Change (i.e. the Annex-I states) and the other parties about their common but differentiated commitments may be a barrier towards formulation of Activities Implemented Jointly (AIJ) projects that could make a significant impact on global climate change.

A consultation among multiple stakeholders was thought to be highly desirable for free and frank exchange of perspectives from different regions of Africa, Latin America and Asia Pacific and sharing the lessons learnt so far from AIJ projects under execution globally. The New Delhi Conference, "AIJ: Developing Countries Perspectives", held 8-10th January 1997, provided the forum for this consultation.

In the first of two articles, Kalipada Chatterjee, Chief of the Global Environment Group at Development Alternatives, describes the outcome of the meeting in which over 200 delegates from 40 countries participated.

THE PROCESS which led to the New Delhi Conference was initiated by the Joint Implementation Network in The Netherlands as a follow-up to the Groningen international conference on "Joint Implementation" which was held in June 1994. Development Alternatives in New Delhi was selected for organizing the conference

The decision to establish a pilot phase for AIJ was taken at the Conference of the Parties in Berlin in the spring of 1995. The pilot phase was an experiment in partnership between Annex-I Parties and, on a voluntary basis, with non-Annex-I Parties. It was accepted that exercises such as AIJ would be supplementary and be treated as a subsidiary means of achieving the objectives of the UN Framework Convention on Climate Change (UNFCCC).

The relatively small number, currently around 30, of AIJ projects officially recognised by the UNFCCC since inception of the pilot phase in 1995 is a matter of concern. Many of them have yet to reach an operational phase. Given the short time horizon for evaluating the pilot phase, set by the Conference of the Parties at the year 2000, there may not be enough empirical information to provide the basis for a rational decision on how, or even whether, to move forward beyond the pilot phase.

An increasing number of potential AIJ projects are, however, being designed in different parts of the developing world and point towards growing optimism and interest in testing AIJ through partnerships on the ground.

There has been a realization in the international community that there is inadequate understanding of AIJ as an institution. To contribute towards the objectives of the UNFCCC, the New Delhi Conference set out:

  • to identify mechanisms to promote AIJ activities that are compatible with national development priorities in host countries;
  • to evolve methodologies for designing pilot phase AIJ projects;
  • to develop indicators for measuring local and global benefits of AIJ projects specifically from the perspective of the South; and,
  • to clarify the potential roles of the state, business, NGOs, academia, multilateral agencies and the media in the AIJ regime during the pilot phase and beyond.

In his welcome address, Dr Ashok Khosla, Chairperson of the Conference, said that AIJ remained a contentious issue in the UNFCCC process. The South needs to ensure that their socio-economic development priorities are served and safeguarded by the AIJ institution and that all the projects are country-driven in an AIJ regime. The role of the state, the private sector, NGOs and academic institutions in the pilot phase of AIJ should be clearly defined. There are concepts such as additionality, complementarity and cost-effectiveness which need to be clarified for better understanding among parties.

Dr Khosla continued by pointing out that the conference should be more specific and focused on developing design principles and methods for project management, monitoring, evaluation and a reporting framework. AIJ has strength and weakness inherent in the process. Whereas it clearly promotes energy efficiency, cost-effectiveness, private sector involvement and transfer of technologies to the South, the weaknesses are not clearly visible. This makes many countries sceptical about the intentions of the Annex-1 Parties in the AIJ regime and they prefer to take a cautious approach.

Out of 30 official AIJ projects, 15 are concentrated in a few countries of Latin America. This demonstrates the pro-active role of Latin America in the AIJ regime. The presentations from Chile, Brazil, Costa Rica, Honduras, Ecuador at the conference brought out the opportunities they identified in the pilot phase AIJ regime. Luiz Pinguelli Rosa of Brazil pointed out the need of developing countries to improve on per capita energy without increasing per capita greenhouse gas emissions by introducing renewables, while Annex-I countries should reduce per capita by increasing energy efficiency. AIJ opens up the possibility of South/North international cooperation initiatives in the transfer of state of the art technologies.

Discussing reasons why more nations were not involved in the AIJ pilot phase, R S Maya from Zimbabwe stated that Africa had not had full appreciation of the purpose of engaging in AIJ. He pointed out that there is a learning curve disparity caused by the skewed nature of AIJ projects among regional blocks and economic sectors that has made Africa's involvement in AIJ so far very limited or negligible. Maya suggested that key indicators for the performance of AIJ projects need to be identified such as the ability of the host country to establish a long-term cleaner production path.

A plenary discussion concluded that developing countries expect tangible benefits from AIJ during the pilot phase. Priority areas fall under three main categories, economic, institutional and environmental:

  • increased investment in priority sectors of the economy;
  • additional investment without adding to external debt;
  • transfer of clean and cost-effective technologies;
  • reduced imports of fossil fuels;
  • job creation from projects and industries;
  • improved access to power, fuel and fodder;
  • community based livelihoods supported by AIJ power and agroforestry projects;
  • capacity building at local, state and national level;reduced air pollution caused by outdated power generation technologies; and,
  • reduced water pollution and soil erosion caused by deforestation and unsustainable agriculture.

Case studies from India, Chile, Sri Lanka and Zimbabwe on expectations and opportunities were discussed in the plenary session. It was concluded that AIJ could be effective in:

  • reducing greenhouse gas emissions;
  • reducing local air pollution;
  • increasing sinks;
  • reducing deforestation;
  • sustainable agriculture; and,
  • reduction of soil erosion.

Moreover, AIJ could provide effective opportunities for developing countries in the following areas:

  • the clean coal technology sector;
  • thermal power plants;
  • the transportation sector;
  • the renewable energy sector; and,
  • afforestation programmes.

One of the objectives of the New Delhi Conference was to contribute to the design principles and methodology of AIJ projects. The feasibility and design principles of AIJ projects in thermal and renewable energy, building and transport, forests, agriculture and land-use sectors were discussed in four parallel working groups and synthesized in a plenary session.

In the past, a number of developing countries have been recipients of funds for projects which were found to be unsustainable, mainly because the donors were engaged less in a capacity building exercise in the host country than in focusing on the financial aspects of the projects, thereby causing an imbalance. Some of the projects deployed technological solutions without understanding the socio-economic impacts of such interventions. Therefore, there is a need for carefully planned methodologies in designing AIJ projects. All AIJ projects must be scrutinized and approved by the government of the host country. The actual gains for the host country need to be laid down in clear terms. All technologies transferred under AIJ must be appropriate to local situations.

The involvement of the stakeholders must be ensured at all phases of a project—conceptualisation, design, implementation, monitoring, and continuance of the project beyond the project life. There should also be an even distribution of AIJs between the urban and rural areas.

The following principles need to be incorporated in designing a project. AIJ projects should be so designed that a substantial part of the benefit from implementing the project comes to the host country. The investor should ensure that sufficient local capabilities exist in the host country to meaningfully assess and execute an AIJ project. The donor community has to assist in enhancement of the capacity in the host country. The pilot phase is essentially a learning experience for the international community and a precursor to future policy framing.

It was concluded that the design methodology must address the following:

  • national development priorities;
  • environmental considerations;
  • greenhouse gas (GHG) emissions—baselines;
  • non-GHG considerations—project impacts;
  • financial and economic considerations;market analysis;
  • appropriateness and soundness of technology to be transferred;
  • socio-economic considerations;
  • development of institutional capacity to implement projects; and,
  • testing and adopting an AIJ monitoring methodology.

Some doubts were expressed regarding the supposed opportunities presented by AIJ during the meeting. For example, Sam Ferrer spoke on behalf of the Philippine Network on Climate Change and Climate Action Network Southeast Asia. He expressed strong reservations to the concept of AIJ, saying "the developing countries should not be subjected to mitigation measures unless, and until, Annex-1 countries make firm and concrete commitments regarding emissions reduction in their own territories". He continued that "these mechanisms [AIJ] provide Annex-1 countries with a bargaining chip for credits and a way to renege on their responsibilities in emissions reduction as stipulated in the UNFCCC. If we go by the objectives and orientation of this conference it is doubtful that AIJ can stand scrutiny in the light of the sustainable development principle."

Notwithstanding notes of dissension and genuine doubt such as this, an unequivocal expression of the need to honour the UNFCCC and the COP-1 decision on the pilot phase of AIJ prevailed during the conference.

The tendency to shy away by questioning the scientific findings and the provisions of the UNFCCC are signs of weakness in our effort to address the real issue. A great deal of soul searching may have to be done as to how the climate change agenda is going to be shaped in future. It has been said that the cost of taking action for mitigation of climate change five to ten years hence would be lower. In fact, the most significant risk for developing countries is the risk of not acting now. Waiting to act may prove to be very costly for the poor countries in the long run.

Increased population and unabated growth in consumerism are seen as further threats to global climate stability. On the one hand, developed countries need to reduce their emissions. On the other, developing countries should stop following the development path of the industrialized countries, making the similar mistake of "first pollute and then cure."

It was generally agreed that the host state had a dominant orchestrating role to play in the AIJ regime. The state has to play a watchdog role, simultaneously being a facilitator and decision-maker in the choice of new technologies and financial mechanisms. It is with the right interventions and state direction that the sustainable development needs of the country and the goal of emission reductions can be ensured and will coincide.

The North-South perspectives on AIJ that were brought out at this conference should lead towards a better understanding of the AIJ process among the multiple stakeholders such as governments, business and industry, academia and the civil society in general.

These perspectives should also facilitate the launching of national programmes of AIJ projects in the specific sectors of energy, construction, transportation, waste management and recycling of resources where such programmes have not yet taken off.

The positive nature of the outcome of the conference is a "shot in the AIJ arm" and will probably get reflected in the formulation of national strategies for the forthcoming Third Conference of the Parties (COP-3) scheduled to be held in Kyoto, Japan in December 1997.

In the next issue of Tiempo, the conclusions and recommendations of the New Delhi Conference will be reproduced in full.


Further information

Kalipada Chatterjee, Development Alternatives, B-32 Tara Crescent, Qutab Institutional Area, 110016 New Delhi, India. Fax: 91-11-6866031. Email: tara@sdalt.ernet.in.