A:
This is a very interesting question to which time only can answer! It also depends on continuity of the Kyoto Protocol beyond 2012 and the nature of participation (I mean participation by Australia, US, major developing countries, etc.) in that regime. The answer will therefore be hypothetical at this point. On one hand, I foresee the rapid development of emissions trading systems in the US, Australia and other countries which may create new demand for carbon credits.

On the other hand, if some industrialized developing countries (e.g., Republic of Korea) take up some binding commitments and decide to purchase CERs, new schemes may develop. There is also a possibility of development of regional emissions trading system within the Asia-Pacific, which again may create additional demand. I wish to restate that all these are just possibilities and purely hypothetical at this stage.

A:
As per current rules, there is no restriction on the number of CDM projects to be registered by the Executive Board. I do not foresee any such restriction to be imposed by EB in future. However, as any market-based system, if the supply of CERs is more than the demand, the price of CERs will decline. If that happens, the unilateral CDM projects are most likely to suffer.

A:
Our project "Asia-Pacific Consultations on the Future Climate Regime Beyond 2012" was initiated in June 2005. The aim of these consultations, including national dialogues, questionnaire surveys, interviews with key informants and literature surveys, was to ascertain the concerns, interests and priorities of various countries in relation to the future climate regime. The first round of consultations was done at national level in China, India, Indonesia, Japan, Republic of Korea, and Vietnam and at regional level.

Through these consultations we found out that stakeholders in many countries shared similar interests on issues such as: (a) the need for considering climate concerns in developmental context; (b) streamlining of the Clean Development Mechanism (CDM) by reducing its complexities and uncertainties; (c) enhanced focus on adaptation through building on existing funding mechanisms; (d) facilitation of the development, deployment and diffusion of climate-friendly technologies; and (e) further support for strengthening the capacity of negotiators, the private sector and financial institutions in the region.

However, differences were evident in issues such as: (a) ways to consider equity in the future climate regime; (b) form, time and kind of involvement of developing countries; (c) national preferences for climate-friendly technologies; and (d) approaches to, and funding for facilitating adaptation, especially regarding the need for a separate protocol and introduction of market-based mechanisms.

We plan to continue these consultations in 2006. The second round will be done at sub-regional level. We plan to hold consultations for the East Asian region in early June, South East Asia in early July and South Asia in early August. This year, our discussions would focus on specific issues such as Clean Development Mechanism, adaptation to climate change, technology development and transfer, sustainable economic development. We actively seek contributions from all interested parties to make these consultations a success. Our immediate goal is to develop a blueprint for future climate regime that adequately reflects concerns and priorities of the Asia-Pacific region, a region with great development potential with significant implications for the sustainability of our planet.

A:
This is an important question to which the answer is not always easy. We must remember that adaptation to climate change is not a surrender option to cope with climate change. It is a strategic decision and all strategic decisions require some risk-taking approach.

Although "climate proofing" of infrastructure development would obviously cost more initially, the benefits in the long term will be much greater. There are several instances where it was shown clearly that the accumulated costs from the "climate-proofed" infrastructure, including repairs and maintenance, would be lower. A recent study by the Asian Development Bank, for example, clearly showed that the internal rate of return from "climate-proofing" of a road infrastructure project in Federated States of Micronesia was about 11 per cent due to lower repair and maintenance costs. It is thus important to determine the long term benefits of "climate-proofing" and visually show them to policy makers, so that they can be convinced. The cost of inaction or costs in the absence of "climate-proofing" should also be shown so that policy makers can develop a long term thinking.

It must be noted that more than one strategy may be necessary to convince reluctant decision makers, depending on geographic context and socio-economic backgrounds.

A:
As you may be aware, J-VETS is only a new but modest initiative introduced by the Japanese Ministry of the Environment. The scheme, as I understand, is not mainly directed towards meeting the Kyoto targets. It is envisioned that the scheme would serve as a catalyst to further the understanding of domestic emissions trading, through which additional knowledge and experience can be gained for both the government and the participating companies. Currently 32 firms are participating in J-VETS. Therefore, our expectations on its impact should be modest at this stage.

A:
The United Nations Framework Convention on Climate Change (UNFCCC) makes clear that developing and industrialized countries have "common but differentiated" responsibilities to meet the Convention's goals. Unfortunately, the discussion has polarized in international negotiations with the developed countries focusing mainly on common responsibilities, while the developing countries focusing on differentiated responsibilities. While it is true that cumulative contribution of industrialized countries to the problem of climate change is enormous, it is important to bear in mind that all countries should do their part in order to meet this global challenge. We must also remember that developing country commitments need not be similar to those taken up by industrialised countries.

Clean Development Mechanism provides developing countries with opportunities to become active participants in international efforts to reduce GHG emissions. The various modalities for administering the CDM were discussed since 2000 and were finalized at the recent COP/MOP1 in Montreal. Criteria for determining baselines, additionality, etc. ensure effective enforcement and monitoring of the CDM projects.
More details on CDM can be obtained from: http://www.unfccc.int/cdm/
Also look at our publication CDM and JI in CHARTS available at: http://www.iges.or.jp/en/cdm/report01.html

Dr. Ancha, now energetically answering the queries.

A:
In my opinion, the US would not ratify the Kyoto Protocol anytime soon. The US administration is mainly interested in relying on development of climate-friendly technologies rather than committing to a global mandatory cap-and-trade regime such as the one stipulated in the Kyoto Protocol. In the State of Union address, President Bush announced the Advanced Energy Initiative, which leads to a 22-percent increase in clean-energy research at the Department of Energy to push for breakthroughs in areas such as zero-emission coal-fired plants, revolutionary solar and wind technologies, and clean, safe nuclear energy. As you may be aware, the US is involved in another new initiative (AP6) along with Australia, China, India, Japan and Republic of Korea, which is also focused on climate-friendly technologies.
I do not see any linkage between the US focus on technologies and its lack of willingness to participate in the Kyoto Protocol. Both economic and political interests seem to impede the active participation of the US in the Kyoto Protocol.
It is also important to recognize that several efforts to mitigate GHG emissions are going on at State level. On June 1, 2005, California Governor issued Executive Order S-3-05 which calls for a reduction in GHG emissions to 2000 levels by 2010 and to 1990 levels by 2020, with a further reduction to 80% below 1990 levels by 2050. A recent report by Center for Clean Air Policy (CCAP) showed that carbon reductions sufficient to meet those targets can be achieved at no net cost to consumers and likely at a benefit in both 2010 and 2020.

A:
With the support from the Ministry of the Environment, Japan, IGES has been implementing a project called "Integrated Capacity Strengthening for the Clean Development Mechanism (CDM)/Joint Implementation (JI)" since October 2003. Through this project, we have been assisting policy makers and other stakeholders in several countries including Cambodia, China, India, Indonesia, the Philippines, Thailand, and Russia.
In view of our limited manpower and financial constraints, it is not possible to conduct national training programmes in each country. However, we invite people from various countries including LDCs on a sub-regional basis and organize capacity building workshops appropriate to their needs. For instance, we organized introductory seminars on CDM in Nepal by inviting various participants from Bangladesh, Bhutan, Nepal, India, Pakistan, Sri Lanka and Thailand. Like wise, we held a workshop for countries in the Pacific region, where representatives from 14 Pacific island countries participated to examine the potential and barriers for implementation of CDM.

Insofar as proactive micro-adaptation (PMA) is concerned, we have not been involved in capacity development initiatives yet. However, our team has been engaged in various initiatives related to PMA in Bangladesh for some time.
For example, our team has collected policy-relevant information on community-level adaptation initiatives in drought, flood and salinity-prone areas of Bangladesh through participatory rural appraisals, focus group discussions and interviews with policy makers and local people. We wish to expand such studies to other LDCs in the region in due course depending on availability of resources. We are also planning to collaborate with PMA-related initiatives in the region launched by other international organizations. We are always looking forward to collaborate with any interested organization on such initiatives.

A:
I would like to clarify that issuance of CERs for CDM projects would continue until the end of the first commitment period of the Kyoto Protocol (2012), and that all such credits can be used for meeting the emission reduction targets by Annex 1 countries. In terms of registration of projects by the CDM Executive Board, however, there are two main differences.
For CDM projects hoping to derive CERs from activities initiated between 1 January 2000 and 18 November 2004 (the so-called “prompt-start” projects), the recent Montreal conference (COP11 and COP/MOP1) decided to extend the registration deadline from 31 December 2005 to 31 December 2006.
The rest of the projects can be registered at any time and the crediting period is initially up to the end of 2012. If there is an agreement on continuity of the CDM after 2012, the crediting period too may be extended beyond 2012. You are right in noting that crediting period for most of the projects is 10 years but there are some projects with a crediting period of 21 years (7years + 7years x 2 times renewal).

A:
Firstly I recommend you to read the following resources available on the web.
(a) Research paper: Overall Issues for Accounting for the Emissions Reductions of JI Projects by Katie Begg, Stuart Parkinson, Tim Jackson, Poul-Erik Morthorst, and Peter Bailey, which is available on the web at: http://www.gispri.or.jp/symp/pdf/Dr.%20Begg-paper.PDF
(b) Power Point presentation made available by the UNFCCC: Greenhouse Gas Emission Trading: The Linkages between Domestic Systems: http://www.iea.org/textbase/work/2001/ghg/PINNA.PDF
You may also find an additional paper entitled "An international registration and tracking system for greenhouse gas emissions trading" useful to understand the accounting details of all flexibility mechanisms. It is available at: http://www.hm-treasury.gov.uk/media/077/16/Michaelowa2c20Koch20(2001b).pdf

For general clarification on JI projects, I provide below an extract from the UNFCCC Web site.
http://unfccc.int/Kyoto_mechanisms/ji/items/1674.php
--- Projects starting from the year 2000 that meet JI requirements may be listed as JI projects. However, ERUs may only be issued in relation to periods from 2008 onwards.
There are two possible procedures for carrying out a JI project. The first procedure (often called "track one") may be applied when the Annex I Party hosting the project fully meets all the eligibility requirements to participate in JI. In this situation, the host Party may apply its own national rules and procedures to the selection of JI projects and the estimation of emission reductions from them. The host Party may also issue ERUs (through converting existing AAUs or RMUs) and transfer them to project participants.
The second procedure ("track two") must be applied if the host Party does not meet all eligibility requirements. In such cases, the project and the quantity of ERUs it generates must be verified under rules and procedures supervised by the Article 6 Supervisory Committee. This Committee is to be elected by COP/MOP 1. Track two allows JI projects to begin operation before the host Party meets all eligibility requirements. However, before it may issue and transfer ERUs, the host Party must meet at least those eligibility requirements relating to the calculation of its assigned amount and the establishment of its national registry.