AIJ: Developing Countries' Perspectives
In the last issue of Tiempo Kalipada Chatterjee of Development Alternatives reported on the conference "AIJ: Developing Countries' Perspectives" which was held in New Delhi, India, between January the 8th and 10th 1997. With 200 participants from over 40 countries, the conference was perceived as an important forum for broadcasting the views and experiences of developing countries regarding the issue of activities implemented jointly (AIJ).
The conference statement included a comprehensive set of conclusions and recommendations. Following on from the report in Issue 23, we present here the full text of the conclusions and recommendations. A list of current AIJ projects is available.
1. More attention should be paid to equity and fairness in the development of activities implemented jointly, and to the various ways to make these concepts operational.
The terms and conditions under which AIJ projects are negotiated and agreed upon need to ensure that the sharing of economic benefits among the partners takes place in a manner that is fair and just.
2. Annex 1 countries must take significant steps to fulfil their present commitments to reduce greenhouse gas emissions and to further strengthen these commitments.
Domestic emissions reduction in Annex 1 countries must remain the primary and most important mechanism for meeting the objectives of the UN Framework Convention on Climate Change (UNFCCC). Annex 1 governments have a major responsibility in establishing policies and mechanisms to achieve net global reductions in emissions of greenhouse gases.
3. Annex 1 countries should introduce domestic incentives and encourage their private sector to participate in AIJ projects for the duration of the pilot phase.
AIJ will only be successful if private investment takes the leading role in project financing. Incentives, in all AIJ project areas, will be necessary to attract more industry partners into the current pilot phase. This is important because under present arrangements AIJ is likely to entail extra costs without providing add to the investor. Information about the scope and magnitude of these incentives should also be disseminated widely in host countries to increase their bargaining strength in negotiations on individual projects.
4. Far more AIJ projects are needed during the pilot phase, in many different sectors and countries, to provide the basis for discussions on the post-pilot phase regime.
In the next three years, many more AIJ projects, preferably initiated by host countries, should be given high priority for implementation in order to deepen our understanding of the exact nature of project costs and benefits and the modalities for sharing these.
The lack of a national baseline should in no way preclude developing project baselines.
5. Developing countries should establish policy frameworks that give them a proactive edge in establishing national AIJ programs and developing project proposals.
More developing countries need to evolve a strategic vision for how AIJ fits into their development priorities. This vision and the national AIJ programs that follow from it are essential to coordinate the activities of different government actors, prioritize sectors and technologies for AIJ projects, establish mechanisms to encourage the development of new projects and build capacity to support the implementation and evaluation of AIJ projects.
Support from Annex 1 countries for building national level capacity in developing countries is critical, whether it is funded through AIJ programmes, development assistance or other mechanisms. Developing country governments, non-governmental organizations and businesses must be encouraged to submit proposals to donors for support to such national level initiatives.
6. Improved project design and development, which incorporates best professional judgement, is necessary to clarify the benefits of AIJ projects to both partners.
Proper implementation of Decision 5/CP.1 will require that projects should be developed through active dialogue between state, private and other non-governmental actors in host and investor countries to ensure that local development priorities are matched with investors' efforts to achieve cost-effective reduction of greenhouse gas emissions. This process must clarify the full range of benefits and costs for all the partners involved, and how these will be distributed.
Each individual project must be accompanied by the most transparent and comprehensive analysis possible of its economic, environmental and social impacts — both positive and negative — in the host country.
Investors have the responsibility to ensure that sufficient local capacity is in place to implement AIJ projects before moving forward. The costs of local capacity building should be built into project costs at the design stage.
Practical, concise, and comprehensive methodologies for AIJ project design, implementation and measurement are urgently needed, as are clear definitions of AIJ concepts such as financial and environmental additionality, project baseline, and cost-effectiveness.
Given the imperatives of sustainable development, the best technologies and expertize for AIJ projects may not necessarily be available from industrialized countries. Collaboration between developing countries on project design should be facilitated and supported by the donor community.
7. Independent review, verification and assessment of AIJ projects should be carried out by mutually agreed third parties certified under the UNFCCC.
Recognizing that many issues in AIJ project design and measurement are primarily technical, a system of expert judgement under the auspices of the UNFCCC, and building on existing UNFCCC bodies, should be created to facilitate project development and implementation. Such expert groups could assist with assessing mitigation benefits, quantifying economic and social impacts in host countries, judging the effectiveness of capacity building, assessing leakage, and setting project baselines.
Since AIJ will be a largely private system of international cooperation operating within government guidelines, and recognizing the incentives for host and investor parties to exaggerate emissions reductions, third party verification of the project parameters is critical for the credibility of the AIJ regime. These third parties should be selected from a list of those certified under a relevant protocol or decision of the UNFCCC and agreed to by both partners.
Independent evaluation of existing AIJ projects should begin as soon as possible during the pilot phase.
8. An international AIJ information clearing-house should be created.
An easily accessible database of detailed and comprehensive information on AIJ projects and proposals would greatly enhance the learning process, speed up project development and implementation, and increase transparency of the AIJ system.
9. Future international meetings on AIJ should focus more on capacity building elements and specific unresolved issues, and make the maximum use of communication technology to minimize the climate change impacts of the meetings themselves.
Conferences and symposia can stimulate valuable dialogue between potential host and investor countries and inspire cooperation in addressing local and global issues of sustainable development. Future meetings that address global environmental issues, such as the UNEP Governing Council, the Commission for Sustainable Development and Rio + 5, should address specific issues regarding AIJ which remain unresolved, including:
- definitions of baseline, additionality, and cost-effectiveness;
- agreement on methodologies for calculating climate change mitigation benefits as well as the economic, social, and environmental impacts on host countries;
- monitoring and verification procedures; and,
- means to strengthen capacity to deal with AIJ at a national and local level in host countries.
Wherever possible these discussions should make maximum use of e-mail and electronic conferences to minimize the need for travel.
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.