Frequently Asked Questions

The United Nations Framework Convention on Climate Change (UNFCCC) (available at: http://unfcc.int) was one of the key outcomes of the United Nations Conference on Environment and Development (UNCED), in Rio de Janeiro in 1992. It entered into force in March 1994 and has to date (December 2006) been ratified by 190 countries.

The objective of the Framework Convention was to stabilize greenhouse gas (GHG) concentrations in the atmosphere at levels that would prevent dangerous human interference with the climate system. To achieve this objective, all countries accept a general commitment to address climate change, adapt to its effects, and report their actions to implement the Convention.

The Convention divides countries into two groups: Annex I Parties, the industrialized countries who have historically contributed the most to climate change, and non-Annex I Parties, which include primarily the developing countries. The principles of equity and ‘common but differentiated responsibilities’ contained in the Convention require Annex I Parties to take the lead in reducing their greenhouse gas emissions.

The Parties to the Convention meet once a year at the Conference of Parties (COP) to discuss and negotiate measures against global climate change. To further the goals of the UNFCCC, the Kyoto Protocol was adopted at the third Conference of Parties (COP-3) held in Kyoto, Japan, in 1997. At this historic meeting, the Parties to the Convention negotiated a set of legally binding quantitative targets for 38 industrialized countries (including 11 emerging market economies). These targets, usually measured as a percentage change on 1990 levels, are to be achieved on average over the first five-year ‘commitment period’ of 2008−2012. The national emission targets range from -8% (e.g. for the 15 Member States of the European Union at that time) to +10% (Iceland), with the total reduction adding up to around -5%.

However, the Protocol did not become legally binding until 16 February 2005, after ratification by Russia surpassed the collective threshold level required for entry into force. All countries that have now both ratified the Kyoto Protocol and are listed in Annex B to the Protocol are therefore legally bound to limit their national emissions to the specified target levels, on average over the period 2008−2012. With ratification of the Protocol, the COP, meeting as the Meeting of the Parties (COP/MOP) to the Protocol, is now the supreme decision-making body for its implementation.

-Quoted from CD4CDM Project (www.cd4cdm.org) and EcoSecurities BV

The Kyoto Protocol recognizes six main greenhouse gases, each with different impact on the global climate. The common ‘currency’ of the Kyoto Protocol targets is one metric tonne of carbon dioxide equivalent (tCO2-e). A carbon credit is one metric tonne of carbon dioxide equivalent. The 6 tCO2-e green house gasses and their global warming potential can be seen in the graph below. The global warming potential value is a number which will be multiplied to the CO2 value.

Based on the principle that the effect on the global environment is the same regardless of where GHG emissions reductions are achieved, countries may meet their targets through a combination of domestic activities and use of the Kyoto Protocol ‘Flexibility Mechanisms,’ which are designed to allow Annex I countries to meet their targets in a cost-effective manner and to assist developing countries in particular to achieve sustainable development. There are three Kyoto Protocol Flexibility Mechanisms:

• Joint Implementation - JI (Article 6);
• Clean Development Mechanism - CDM (Article 12); and
• International Emissions Trading - IET (Article 17).

Both JI and CDM are ‘project-based’ mechanisms which involve developing and implementing projects that reduce GHG emissions, thereby generating carbon credits that can be sold on the carbon market. JI is a mechanism that allows the generation of credits (known as Emission Reduction Units or ERUs) from projects within Annex I countries, whereas the CDM allows the generation of credits known as Certified Emission Reductions (CERs) from projects within non-Annex I countries  (i.e. developing countries). Finally, International Emissions Trading allows trading directly between Annex I Parties in the units in which each country’s target is denominated, known as Assigned Amount Units (AAUs). All of these different units (ERUs, CERs and AAUs) are effectively permits allowing an Annex I Party to emit one tonne of carbon dioxide equivalent (1 tCO2-e).

-Quoted from CD4CDM Project (www.cd4cdm.org) and EcoSecurities BV

The types of projects that are eligible through the C12 - BanyanSeed mechanism are SSC projects. Small scale projects are defined as any project regarding

• renewable energy under 15 MW,
• energy efficiency improvement with a maximum output of 60 GW,
• as well as emission reduction under 60 kilo-tonnes of CO2.