Operationalization and Priority of Joint Implementation Projects

Abstract

The inclusion of joint implementation (JI) in the United Nations Framework Convention on Climate Change as a climate policy instrument is deemed a breakthrough for international cooperation on climate actions. It may provide a good opportunity for cooperation between industrialized and developing countries. Through an analysis of the economic effects of carbon emission limits for China, this paper provides the economic rationale for the industrialized countries to invest in JI projects in developing countries like China, where the costs of abating greenhouse gas emissions are lower than trying to achieve an equivalent abatement within their own territories. Moreover, the paper addresses some operational issues of JI, consensus regarding which is a precondition for the wide implementation of JI. Furthermore, the paper discusses the potential areas for JI projects that may be in China's interest. This discussion underlines that taking due consideration of local objectives and local conditions in designing JI projects will enhance their possibility of success.

Keywords: Joint implementation, Carbon tax, China

JEL Classification: Q28, Q25, Q48, Q43