1

Annex I Expert Group Workshop on

Joint Implementation and InternationalEmissions Trading under the Kyoto Protocol

Workshop report

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

INTERNATIONAL ENERGY AGENCY

PARIS, 19 NOVEMBER 1999

2

FOREWORD

The Annex I Expert Group on the UNFCCC aims to provide useful and timely input to the climate changenegotiations. As part of its work, it oversees the development of analytical papers and organises ofworkshops.

The Annex I Parties or countries referred to in this document refer to those listed in Annex I to theUNFCCC (as amended at the 3rd Conference of the Parties in December 1997): Australia, Austria, Belarus,Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, the European Community, Estonia,Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein,Lithuania, Luxembourg, Monaco, Netherlands, New Zealand, Norway, Poland, Portugal, Romania,Russian Federation, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom ofGreat Britain and Northern Ireland, and United States of America. Where this document refers to“countries” or “governments” it is also intended to include “regional economic organisations”, ifappropriate.

ACKNOWLEDGEMENTS

This workshop report was prepared by Stéphane Willems (OECD) with input from Jane Ellis (OECD),Richard Baron and Martina Bosi (IEA). The authors would like to thank the workshop’s Chair, facilitatorsand speakers for their input as well as Jan Corfee-Morlot (OECD) and Jonathan Pershing (IEA) for theircomments and suggestions. The authors are responsible for any errors or omissions in this report.

Special thanks are due to Aleksi Hokkanen as well as to Lyndia Levasseur and Carolyn Sturgeon for theirinput to organisation of the workshop.

Questions or comments should be sent to:

Stéphane WillemsAdministratorEnvironment DirectorateOrganisation for Economic Co-operation and Development2 rue André Pascal75016 Paris, FRANCETel: (33 1) 4524 9697Fax: (33 1) 4524 7876E-mail: stephane.willems@oecd.org

OECD and IEA information papers for the Annex I Expert Group on the UNFCCC can be downloadedfrom: http://www.oecd.org/env/cc

3

EXECUTIVE SUMMARY

The Annex I Expert Group Workshop on Joint Implementation and International Emissions Trading, heldon 13-14 September 1999, laid out some of the technical options surrounding the development ofinternational rules and guidelines for both Joint Implementation (JI) and International Emissions Trading(IET) under the Kyoto Protocol. The workshop addressed four groups of issues:

• participation of countries with economies in transition in JI and IET;• market power, trade and competitiveness;• monitoring, reporting and verification; and• eligibility, liability and responses to non-compliance.

In the panel session on Countries with economies in transition, participants recognised the particulardifficulties that these countries face in preparing for the implementation of the Kyoto mechanisms. Thedifficulties most frequently cited include uncertainty about future economic growth, changes in legal andinstitutional frameworks (often brought about by working to obtain EU membership) and lack ofinstitutional capacity. Yet the experience of many countries with JI-type projects during the pilot phase“activities implemented jointly” is recognised as a useful starting point.

In the session on trade and competitiveness issues, participants noted that there was little evidence that adominant player could exert market power in particular if legal entities participate in the market. On thelink between the Protocol and the World Trade Organization (WTO), legal experts thought that there was alow risk of the Kyoto Protocol being challenged as WTO-inconsistent, although there is no jurisprudenceon this issue. In particular, Assigned Amount Units (AAUs), which would be traded under the Protocol,may not be subject to WTO ruling, since they may be considered as neither a “product” nor a “service”.Specific compliance rules could therefore be established within the Kyoto Protocol if Parties wish toregulate the trade of AAUs. However, Parties will need to be sensitive to WTO and competitivenessconcerns when implementing domestic rules for the Kyoto mechanisms as well as domestic policies andmeasures.

In the session on monitoring, reporting and verification, participants noted the importance of complyingwith guidelines under the Protocol’s Article 5 (national inventory systems) and Article 7 (reporting) whenparticipating in the Kyoto mechanisms. However they disagreed whether additional rules for JointImplementation were needed, in particular to assess and/or verify the additionality of projects. Two broadoptions regarding national registries for tracking international transactions by Parties and entities were alsodiscussed. One option would require the development of minimum international rules for inter-linkingnational registries. The other option would not require international rules at the outset, as internationaltrading among entities and/or governments could be initiated through bilateral agreements between Parties.

In the session on eligibility, liability and responses to non-compliance, participants noted theinterdependence of liability rules with any decisions on the compliance regime under the Kyoto Protocol.They also noted the effect of different liability rules on the participation of legal entities. Last, the role ofdomestic compliance regimes (including national registries) was considered as key in preventing non-compliance through emissions trading.

4

1 INTRODUCTION

The objective of the Annex I Expert Group’s work on the Kyoto mechanisms is to contribute to developingan international implementation framework under the Kyoto Protocol. Analytical work is being carried outto improve understanding of - and develop practical options for - implementation requirements for theKyoto mechanisms.

To contribute to this work, the Annex I Expert Group held a workshop in Paris, France, on 13-14September, 1999. This workshop focused on Joint Implementation and International Emissions Trading.Both mechanisms provide an opportunity for Annex I Parties to trade among themselves portions of theirassigned amounts, as defined by the Kyoto Protocol. The workshop aimed to:

− explore linkages, common issues and differences between Joint Implementation and InternationalEmissions Trading.

− promote a clearer understanding of specific technical issues that underpin the implementation of thesemechanisms, including issues related to: market and trade; monitoring, reporting and verification; andeligibility, liability and responses to non-compliance; and to

− place a special emphasis on the challenges faced by the Annex I countries with economies in transitionin implementing the Kyoto mechanisms.

The workshop started with a panel session on the participation of countries with economies in transition inJI and IET, in order to increase understanding of the specific circumstances of these countries. Thissession was followed by three working group sessions:

− Working group 1 on market and trade issues outlined issues related to market power as well ascompetitiveness, including the link between the Protocol and the World Trade Organisation;

− Working group 2 on monitoring, reporting and verification discussed minimum requirements needed atthe international level for monitoring, reporting and verification as they pertain to JI and EIT; and

− Working group 3 on eligibility, liability and responses to non-compliance focused mainly on adiscussion of liability issues raised by International Emissions Trading.

There were approximately 140 participants in the workshop, including 100 delegates from Annex I countrygovernments and approximately 40 experts from business and industry, environmental non-governmentorganisations, research institutes and other intergovernmental organisations.

5

2 PARTICIPATION OF COUNTRIES WITH ECONOMIES IN TRANSITION

Facilitator: Serena Adler (Ministry of Waters, Forests & Environmental Protection, Romania)

Rapporteur: Jane Ellis (OECD)

2.1 Questions and presentations

This panel session was asked to address the following questions:

− What are the relative advantages and disadvantages between JI and IET for countries with economiesin transition?

− What are the main institutional needs (and capabilities) to prepare a project e.g. to collect data, tomonitor national emissions and/or project emissions, enforcement etc.?

− What is necessary in countries with economies in transition to meet these needs? Are there examples ofprogress in this area?

− What is the size and nature of the market in countries with economies in transition (market potentialand project opportunities)?

Four discussants introduced the main issues:

Lubomir Nondek (DHV, Czech republic) focused his presentation on the different strategies needed tosuccessfully implement JI and IET. He highlighted the potentially heavy human resource needs for hostcountries to participate in JI (e.g. administrative processes, technical experts). He also identified thechallenges posed by participation in IET, such as uncertain GHG projections, a need for an accurateemissions inventory and the lack of a mechanism to allocate emission rights/revenues. He also outlined theparticular difficulties that these issues posed to economies in transition, which are already undergoingsignificant, and sometimes unpredictable, changes in economic growth, legal framework andenvironmental performance.

Ingrida Apene (Ministry of Environmental Protection & Regional Development, Latvia) outlined Latvia’sopinions on JI and IET, and Latvia’s proposed national institutional arrangements to supervise thesemechanisms. She emphasised Latvia’s positive experience with "activities implemented jointly" (AIJ), butalso pointed out the difficulties faced in financing the institutions needed to oversee AIJ activities and incalculating and monitoring emission reductions from AIJ/JI projects. She also identified the need forsimplicity in any IET system to be set up, and outlined the institutional, legal, financial, technical andcapacity-building barriers to IET.

6

Vladimir Berdin (Russian State Committee on Environmental Protection) indicated the Russiangovernment’s favourable attitude to both IET and JI. He presented steps that the Russian government isundertaking to improve its greenhouse gas emissions inventory and projections. He also outlined changesin Russian legislation and institutions that are planned or initiated in order to facilitate participation in IETand JI. He emphasised that co-operation within a country (i.e. between different stakeholders and differentlevels of governments) was critical to implement the Kyoto mechanisms successfully.

Anne Arquit-Niederberger (Swiss AIJ Pilot Program, State Secretariat for Economic Affairs) gave anoverview of the characteristics of JI and IET and their potential advantages and disadvantages from theperspective of economies in transition. She based her views on results of the studies being undertaken bypotential host countries under the Swiss-World Bank Collaborative Initiative on National AIJ/JI/CDMStrategy Studies. For example, while the costs of individual transactions might be higher for JI than IET(due to e.g. the project-by-project approval requirements), IET requires sophisticated national inventorysystems, which can be very expensive for governments in transition countries to put in place. She alsopointed out that by definition, JI results in increased transfer of climate-friendly technologies with foreigninvestment, while the fate of revenues from trading depends on domestic policy. She identified needs forcapacity-building, including efficient institutions, information/awareness on climate change issues within acountry, and environmental expertise in different areas (e.g. in the private sector). In addition, sheindicated estimates of the potential AAU demand of Annex I countries and of AAU "supply" in fourtransition countries.

2.2 Discussion

Countries with economies in transition are not a homogeneous group. The different situation of eachcountry regarding the rate of economic and emissions growth, difficulty of achieving the Kyoto target,institutional capacity, etc., may lead individual governments to follow different paths for implementingthese mechanisms.

On the issue of whether priorities should be set between JI and IET, one participant from an investingcountry noted that they had had difficulties implementing AIJ projects, and suggested that it would beeasier for investors if potential host countries decided to prioritise either JI or IET. However, otherparticipants felt that there was sufficient time for countries to start both. Another participant noted thatalthough the transaction costs for IET were lower than for JI projects, there was a fixed cost associatedwith setting up an IET system and that this should be taken into account.

Participants from several countries with economies in transition noted the lack of institutional andadministrative capacity to deal with the demands of implementing the Kyoto mechanisms. Regarding JI,lack of a focal point and country priorities for types of AIJ/JI projects were noted as barriers to projectidentification and implementation. Moreover, many participants outlined the difficulties in establishingemission baselines for AIJ/JI projects, in particular in uncertain economic environments, and someparticipants outlined that their country lacked capacity needed to calculate and verify such baselines.

This difficulty may be compounded by the fact that environmental performance in those countries planningto accede to the EU is likely to change significantly from current performance. This should occur as suchcountries strengthen environmental legislation and performance to prepare for EU membership (e.g. byimplementing the Integrated Pollution Prevention and Control Directive).

On next steps planned or required to implement the mechanisms, there was interest in differentperspectives on how governments’ plan to devolve parts of assigned amounts. Initial results from a studyundertaken by UNEP suggested for instance that upstream regulation (e.g. on coal production) may not bea practical option.

7

Participants noted the need for strategic thinking by governments of countries with economies in transitionin order to implement the Kyoto mechanisms. The uncertain economic climate in which many countriesare operating, and consequently uncertain emissions projections make it difficult to predict what themarket potential for JI/IET will be in many countries with economies in transition. For example,although it may seem clear for most countries with emissions targets whether they will be net buyers orsellers, it is by no means clear cut for all countries with economies in transition.

Thus, by the first commitment period, countries with economies in transition could be buyers or sellers inan IET system, hosts or investors in JI projects, as well as potentially being investors in CDM projects.However, it was noted that erring on the side of compliance could be beneficial for countries witheconomies in transition, given that any unused parts of assigned amount could be banked for subsequentcommitment periods. One participant suggested that demand for credits or parts of assigned amounts fromeconomies in transition could actually be smaller than supply. This could result from the significantpotential for low-cost mitigation measures existing in economies in transition, and from the risksassociated with buying parts of assigned amount (depending on the rules pertaining to the Kyotomechanisms that will be set up).

One Slovakian participant outlined the situation in her country. Her government would like to introduce anemission ceiling for CO2 in addition to that of other pollutants. The government does not anticipate wideIET in the first commitment period, and assumes that if IET were to take place, it would be amonggovernments, rather than entities. Nevertheless, in such a case, revenue from government trading would begiven to entities that had reduced their emissions, in order to provide incentives to other entities to dolikewise. This raised the question as to whether or not rules governing how to spend IET receipts shouldbe set up internationally, or whether national governments should decide.

Discussion also outlined an alternative method for encouraging a move to a lower emission pathway.Some countries could initiate forward trading for a part of their projected surplus ("hot air"), and use therevenue from this forward trading for specific environment-friendly investments. Some participants thusfelt that forward trading could reduce the risk of non-compliance for some Parties, and could also help toovercome financial barriers by providing start-up capital for mitigation investments. Moreover, at least inthe view of some, not being able to participate in forward trading was seen to result in significant foregonerevenue for their country.

8

3 MARKET AND TRADE ISSUES

Facilitator: Andrej Kranjc (Slovenia)Rapporteur: Martina Bosi (IEA)

3.1 Questions and presentations

The working group addressed the following questions:− Can a “seller” country with a large market share influence the price of a unit? Is cartel behaviour

possible?

− What trade practices can help limit market power?

− What is to be traded internationally? What is the traded item in the Kyoto Protocol, and which WTOAgreement covers trade in that item? What are the underlying legal principles, property rights andlegal status of a unit of trade (parts of assigned amount, emission reduction units or certified emissionreductions)?

− To what extent might the Kyoto Protocol mechanisms raise trade-rule compatibility issues? Are therespecific trade issues to be addressed in designing these mechanisms?

− Do different approaches to national allocation of AAUs raise competitiveness issues?

The first two discussants addressed the questions of market efficiency and market power. The last twospeakers addressed trade and competitiveness issues and the link between the Protocol and the WTO.

Peter Bohm (Stockholm University, Sweden) noted the suitability of GHG emissions as a "perfect"commodity for trading. He also argued that greater market efficiency would be achieved with tradingcarried out on an emissions exchange, through greater information transparency and lower transactioncosts, than under bilateral trading. It is well known that the higher the number of participants (e.g. ifprivate entities are allowed to participate in emissions trading), the lower the risks of inefficient trading andthus market power. However, even in the event that there is a dominant buyer or seller, there areincentives on an emissions exchange for the transaction volume and final prices to approach thecompetitive outcome. This result is supported by general, as well as emissions-trading-specific,experimental evidence. Moreover, the information on marginal abatement costs likely to be available willtend to make early prices on the exchange approach the competitive level. If so, both effects of marketpower: transaction volumes below the competitive level and prices favourable for a dominant trader, wouldbe small or even disappear, when emission trading is carried out on an exchange.

Tatsuyioshi Saijo (Institute of Social and Economic Research, Osaka University, Japan) presented thefeatures and results of emissions trading research experiments. His experiments indicate that the overallmarket efficiency of emissions trading, as a mechanism to achieve GHG emissions targets, is close to itstheoretical potential. The efficiency is also basically unaffected by whether or not price and quantityinformation is disclosed, or by trading rules such as bilateral trading and double auction. However, doubleauction is better than bilateral trading since the convergence to competitive price of the auction is much

9

faster than that of bilateral trading. The experiments included a dominant player that could havepotentially exercised market power, but did not. The overall efficiency of trading was reduced in theexperiment that included non-compliance consequences because trading entities over-complied to avoidthe consequences or were forced to under-comply due to the shortage of supply. On the issue of thepotential implications of quantitative constraints on trading, Prof. Saijo’s theoretical work indicates that theefficiency of the trading mechanism is reduced. However, the buyers would gain compared to a noconstraint case, because constraints make the permit price lower.

Jacob Werksman (Foundation for International Environmental Law and Development, UK) presented anassessment of the potential scope of the WTO’s jurisdiction over various aspects of the design ofinternational emissions trading. At this stage, it is not possible to draw precise conclusions on the potentialrelationship between the WTO and the Kyoto Protocol’s IET provisions. Nonetheless, in his view,emissions allowance are government permits or licences to emit, and would not, themselves, qualify aseither products or services under the WTO (but the services associated with trading of AAUs may be a"service" within the meaning of the WTO). Consequently, the rules governing the transfers andacquisitions of emissions allowances, including restrictions on the trading of those allowances, would notviolate WTO prohibitions on trade bans. Internationally agreed rules under the UNFCCC would determinenon-compliance with IET and the Kyoto Protocol. Furthermore to ensure the stability of the IET system,disputes between Parties to the Kyoto Protocol should be resolved by the Protocol’s compliance regime.

However, the discussant did note that the domestic implementation of IET, as well as any other domesticclimate change policy or measure implemented to meet Kyoto targets, would need to be designed in amanner that is sensitive to WTO rules. For example, in his view, domestic allocation through "grand-fathering" might prove an irresistible temptation to policy makers to favour domestic producers and serviceproviders over foreigners, and thus may raise the potential for trade disputes.

Annie Petsonk (Environmental Defense Fund, USA) clarified that while she could not speak on behalf ofthe WTO, it was, in her view, very unlikely that the Kyoto Protocol, and its rules, would be WTO-inconsistent. She also thought that “parts of assigned amount” would not be covered by WTO rules as theyare neither products nor services. Nonetheless, she was of the view that Parties to the Kyoto Protocolshould avoid placing restrictions on the use of IET in order to minimise the (small) risk of WTO-inconsistency. She suggested that the design of the IET market include the following elements which areessential to well-functioning market systems: measurement, transparency, fungibility, consistency, andintegrity. This would help avoid market imperfections (e.g. market power, cartels). She also opined that itwas unlikely that a country’s choice about domestic allocation would be considered a subsidy by a WTOPanel, as it is unlikely that the allocation of emissions obligations would be viewed as the distribution of “afinancial contribution”.

3.2 Discussion

On the market power issue, participants appreciated the theoretical and experimental insights provided bythe discussants. However, they questioned the likely application of model and experiment results andconclusions to real world situations. Several participants felt that the experiment results regarding reducedefficiency of emission trading with non-compliance measures was a result of the underlying assumptionsand may not be the case in reality. In particular, it was suggested that the experiments did not consider thebenefits of compliance. Furthermore, experiment and modelling results were also questioned because theyassume that there is sufficient timely supply to satisfy demand and participants will necessarily complywith their targets. Some felt that reality may be different as supply of emission units may not be adequate,in the timeframe considered, to meet demand at the price predicted by models. It was also suggested that

10

in reality, some players may view non-compliance as a good strategy if the price of emission units neededto meet the targets is too high. Participants were generally of the view that work on models andexperiments should seek to better reflect real-life possibilities in the context of international GHGemissions trading.

On trade and competitiveness, most of the discussion was based on questions to and answers from thediscussants.

One participant asked whether the discussants agreed with a legal opinion that emission reduction units(ERUs) resulting from Joint Implementation would be defined as “products”. The discussants did notshare that view. Another JI-related question was whether or not the policy of a country to host JI projectsonly from certain countries could be viewed as discriminatory from a WTO perspective. This was viewedas very unlikely.

It was also asked whether the WTO or UNFCCC would be the most appropriate forum to raise any tradeand compliance issues relating to the implementation of the Kyoto Protocol (including IET as well asdomestic policies and measures). It was pointed out that a WTO contracting Party would have a right tochallenge a Kyoto Protocol rule, provided that it had not itself voted to adopt it (i.e. it was not a Party).However, there is only one country, currently, that is Party to the WTO, but not the UNFCCC. Theimportance of establishing, in the context of the Kyoto Protocol, a compliance mechanism to resolvepotential disputes was underlined.

Clarification was sought with respect to the question of restrictions on IET and the likelihood of potentialWTO implications. While both discussants were of the view that rules relating to the implementation ofthe Kyoto Protocol were very unlikely to be deemed WTO-inconsistent, one of the discussants nonethelessadvised against restrictions. The other discussant, however, did not believe that an IET rule on restrictionsshould have a different status than any other IET rule adopted under the Kyoto Protocol from a WTOperspective (i.e. it would be equally improbable of raising WTO concerns).

Several questions were raised with respect to the potential implications of AAU domestic allocationschemes (e.g. “grand-fathering” or auctioning) with respect to WTO rules. Caution with respect to thedesign of domestic allocation schemes was recommended in order to avoid protectionism. Caution wasalso advised in the design of regulation for GHG mitigation purposes, for example restrictions on sales ofproducts based on process and production methods (PPM).

In summary, presenters made the following recommendations:- Parties need to be sensitive to WTO and competitiveness concerns when implementing the Kyoto

Protocol, either through rules for the Kyoto Mechanisms or through and other policies and measuresthey may adopt.

- A compliance mechanism is needed within the Kyoto Protocol.- Transparency is important.

11

4 MONITORING, REPORTING AND VERIFICATION

Facilitator: John Drexhage (Environment Canada)Rapporteur: Stéphane Willems (OECD)

4.1 Questions and presentations

Implementing the Kyoto Protocol in general, and the Kyoto Mechanisms in particular, places a heavyemphasis on the need for domestic monitoring, reporting and verification of environmental performance.The main issue addressed in the working group was: what is the minimum set of rules and guidelines thatneeds to be adopted by the Conference of the Parties (at its sixth session) in terms of monitoring, reportingand verification? The group was also asked to address more specific questions:

− What are the common elements and differences in monitoring and reporting requirements for JI andIET?

− Are baselines needed to determine the additionality of JI projects? If not, how are additionality andemission reduction units assessed?

− Is there a role for (third party) verification in the implementation of these mechanisms?

− Are registries needed for JI and IET?

Four discussants introduced these different issues:Einar Telnes (Det Norske Veritas, Norway) presented the main lessons from the ILUMEX pilot (AIJ)project as well as further thoughts from the BP pilot (internal trading) project from the perspective ofverification and certification. He emphasised the importance of developing project specific monitoring andverification protocols (MVPs) that cover a generic set of requirements (for third party auditing purposes),that can sustain best practices and that can be used as a benchmark for other projects. He also emphasisedthe need for guidelines to resolve potential conflicts of interest that may occur as a result of third partyinvolvement in project activities.

Tiit Kallaste (Stockholm Environment Institute, Estonia) presented his view on monitoring, reporting andverification needs, in particular for setting emission baselines for JI projects. He argued for the use of top-down baselines, which are less data intensive than bottom-up baselines.

Flemming Tost (Deloitte & Touche, Denmark) emphasised the value of third party review and auditfunctions in implementing the Kyoto Mechanisms and the parallels with existing financial auditingprocedures.

12

Jo Simons (Department of the Environment, Transport & the Regions, United Kingdom) presenteddifferent options for setting up national registries to track international transfers under InternationalEmissions Trading and Joint Implementation. One option would be based on a minimum set ofcompatibility requirements for national registries, in order to facilitate international transfers. Underanother option, international guidelines for national registries would not be necessary, as internationaltransfers among governments and/or entities could simply be based on bilateral agreements betweenParties.

4.2 Discussion

Much of the discussion focused on the monitoring and reporting requirements for JointImplementation (as compared to Emissions Trading).

Some participants felt that the main international requirement for participating in Joint Implementationunder the Kyoto Protocol’s Article 6 should be compliance with Articles 5 and 7. Transfers of emissionreduction units for joint implementation projects are a zero sum game, since they occur only among Partieswith fixed emission targets. Therefore, as for International Emissions Trading, the most importantinternational requirement, should be the maintenance of a reliable national system for estimatinggreenhouse gas emissions and removals (inventories). At a minimum, Parties hosting JointImplementation projects will need to establish guidelines for project additionality, monitoring andverification, in order to provide a sound basis for determining the amount of emission reduction units to betransferred. However, this can be left to national authorities and requirements could vary from country tocountry.

Other participants felt that guidelines on project additionality, monitoring and/or verification should bedefined internationally. Host countries might not have the institutional capacity to elaborate theseguidelines. Consistent monitoring and verification procedures, as well as for additionality, might in factlower transaction costs for investors. There might also be pressure to give away credits for projects thatare not additional (e.g. for ‘low hanging fruit’ projects)1. This would endanger the ability of these hostcountries to meet their quantitative commitments under Art. 3. Some participants stressed that non-compliance with Articles 5 and 7 should not prevent Parties from participating in Joint Implementation.But in this case, specific guidelines would clearly be needed under Article 6 to ensure that jointimplementation projects were additional.

Some participants pointed out that it might be difficult to adapt international guidelines to nationalcircumstances and that such guidance might increase project costs. For instance, it would be easier for hostcountries to use national guidelines drafted in their own language. International guidelines might alsorequire costly verification and certification procedures. These participants stressed that transparency wasmore important than drawing up international guidelines for additionality, monitoring and verification ofjoint implementation activities. Parties should be transparent about their own monitoring and verificationprocedures, including guidelines on how to calculate baselines. In particular, Parties should publish inadvance the criteria they are using for determining the additionality of projects. This might also increasebusiness confidence and foster investments in Joint Implementation projects. One participant also pointedout that there can be multilateral initiatives to provide Parties with appropriate guidelines for JointImplementation, for capacity building purposes (so as not to ‘reinvent the wheel’ in each country), but thatthis could be done voluntarily and would not necessarily require a COP decision.

1. One participant mentioned that such pressure might come from within the country, with different interests

at stake in government agencies.

13

Participants discussed baseline methodologies in some detail. Some participants considered that a“benchmark” approach would reduce costs of setting up baselines and would not lead to higher levels oferrors than project specific baselines. However, others felt that, while both types of baselines led torandom errors, benchmark approaches may also lead to systematic errors. In this case, some of the costs ofreducing emissions may simply be shifted from private investors to the Parties themselves.

On third party verification, some participants felt that it was not strictly needed for joint implementationprojects and that verification by the host country and the investing party was sufficient. Others mentionedthat independent verification and certification might reduce investment risk in host countries. Oneparticipant also mentioned the need for verification and certification of national inventories.

Finally, a brief discussion on national registries closed the session. Some participants stressed thatinternational guidelines on registries would only be needed to ensure that the output of each system iscompatible i.e. the information that is communicated between national registries is compatible in terms oflanguage, units of trade, etc.. Parties could still set up their own specific registry system, much like therecan be different registry systems for trade in shares. Other participants felt that, while this may encouragetrading by entities, elaborating guidelines on registries might detract attention from more important issuesunder the Protocol as national registries may not need to be compatible from the outset. Rather registriescould evolve into compatible systems over time, e.g. through bilateral agreements between countries.

14

5 ELIGIBILITY, LIABILITY AND RESPONSES TO NON-COMPLIANCE

Facilitator: Paul Lanser (DTI, UK)Rapporteur: Richard Baron (IEA)

5.1 Questions and presentations

The working group was asked to address the following questions related to eligibility, liability andcompliance for international GHG emission trading (IET) and joint implementation (JI):

− Compliance with Articles 5 and 7 is often mentioned as a prerequisite for participation to IET and JI:What information related to transfers and acquisitions needs to be reported under Article 7.1 (e.g. nettrades, level of detail of JI reporting)?

− National registries are proposed for Parties participating to IET/JI. How would governments use suchregistries for compliance purposes? What other options are considered to ensure compliance?

− What eligibility criteria, if any, are considered necessary for JI (certification at Party level, or at projectlevel)?

− Should there be specific non-compliance measures for IET or JI, e.g. if a Party found in non-compliance has transferred parts of its assigned amount?

− What is the role of liability rules, e.g., to assign responsibility, or discourage “overselling”? Whatother requirements can we envisage in addition to, or instead of, liability rules?

− Is there a need for specific liability rule for JI, in addition to Article 6.4?

The discussion was introduced by four presentations.

Nuno Lacasta (Euronatura, Portugal) introduced the “traffic light” approach to international emissionstrading. This approach would use either issuer beware, buyer beware, or an interruption of transfersdepending on the issuing Party’s compliance prospects. The idea of a compliance fund, financed bypenalties for non-compliance, was also discussed.

Matt Evans (International Petroleum Exchange, UK) explained how exchange-based trading operated, andhow it was regulated under an issuer liability regime with financial penalties for market operators and strictsurveillance by the exchange authority.

15

Anne Arquit-Niederberger (Swiss AIJ Pilot Program, State Secretariat for Economic Affairs) presentedan option for an international post-verification trading system, which is an alternative to trading systemsbased on seller or buyer liability. For trading purposes only, Parties would undertake an annual allocationof their total assigned amount (i.e. five annual allocations, which could be adjusted over time). If theirannual inventory shows that emissions are below the annual allocation for the year in question, Partieswould automatically be issued certified excess assigned amount units by an electronic registry maintainedby the UNFCCC Secretariat. Only such certified excess AAUs can be traded internationally and thus, bydefinition, all AAUs available on the market are valid, which contributes to market certainty.

Alexander Golub (Harvard Institute for International Development, Russia) described the possibility ofearly trading and investment in energy efficiency projects as a means to generate future reductions andencourage compliance in the Russian Federation.

5.2 Discussion

The discussion focused mostly on liability rules and market design.

Liability was broadly defined as the allocation of responsibility for non-compliance by a Party if that Partyhad transferred assigned amount units. There was little consensus among participants on what form ofliability should be applied to IET. The benefits of an issuer beware regime were highlighted (homogeneityof traded units, market certainty), while it was recognised that a strong compliance regime would berequired in order to discourage potential “overselling”. Buyer beware systems were seen as likely togenerate different prices based on the likelihood of compliance of country of origin of the AAUs, and wereseen as a way to encourage compliance. Post verification trading was presented as a possible means todisconnect compliance with emission targets from trading. All these options would require differentprocedures: the “traffic light” procedure is based on triggering mechanisms to combine and switch fromissuer to buyer liability. Parties must define an annual allocation of their 5-year assigned amounts under apost-verification trading option. Some participants argued that the risk of non-compliance caused by“overselling” should be addressed through decisions on eligibility, liability and other trading rules. Othersfavoured a separate discussion of trading rules and of the non-compliance regime, arguing that non-compliance could be caused by factors other than international transfers through IET or JI.

The effect of different market designs on the participation of legal entities was actively debated. Somefelt that a system of post-verification trading might create a difficulty for the transfer of AAUs by legalentities, as these would depend on the country’s overall emission level for that year. It was argued that thepost verification trading may generate segmented domestic markets. This could occur if firms willing andable to sell might only be able to do so domestically, or if they had only limited access to the internationalmarket, if there is a limit on how much the Party can sell in a particular year.

At the same time, governments are likely to monitor closely the trading activity of their entities (e.g. on anannual basis). Since the responsibility for compliance rests with Parties and not entities, governments maypay particular attention to transfers of AAUs, irrespective of which liability rules are agreed on in future.The important role of domestic legislation and domestic enforcement mechanisms was noted in addition toan internationally-agreed compliance regime. Participants did not agree on whether or not domesticcompliance regimes should be the subject of international guidance.

While all participants seemed to agree that incentives for early action should be sought in the design ofrules and guidelines for IET and JI, there was no agreement on what would be the best approach. Themain options discussed included unrestricted transactions under issuer beware; post verification trading;and early trading via forward transactions.

16

Public information on international transfers, e.g. via an international registry, could also help minimise therisk of “overselling”, as potential buyers would be able to assess the compliance prospect of sellers,provided they also have access to their inventory information. However, such information may only beeffective to dissuade “overselling” under a buyer liability regime.In conclusion, the non-compliance regime to be decided under Article 18 of the Kyoto Protocol is likely toaffect the rules and guidelines chosen for IET, especially with respect to eligibility and liability. Viewsdiffered on whether there would be sufficient rigour in the mechanism under Article 18 to dissuade non-compliance by Parties, and entities operating under their responsibility. Some discussants saw the need forsafeguards within the rules for the mechanisms such as liability rules.

There was little discussion on specific eligibility criteria beyond compliance with Article 5 and 7, althoughParties should probably comply with these Articles regardless of whether they intend to trade or not. Therewas no elaboration on what differences there might be in the rules for IET and JI.

17

APPENDIX 1: WORKSHOP AGENDA

Joint Implementation and International Emissions Trading,13-14 September, 1999, IEA headquarters

Chair: Midori Tani (Japan)

Monday, 13 September 1999

9.30 - 13.00Opening Plenary

9.30 - 9.35 Introduction remarks by the Chair of the Annex I Expert Group (Richard Bradley,US Department of Energy, USA)

9.35 - 10.00Opening statement and objective of the workshop by Chair (Midori Tani, MITI,Japan)

10.00 - 11.00Panel session: Participation of countries with economies in transition in JI and IETFacilitator: Serena Adler, Ministry of Waters, Forests & Environmental Protection,Romania

Discussants:

Ingrida Apene, Ministry of Environment, Latvia

Vladimir Berdin, Russian State Committee on Environmental Protection

Lubomir Nondek, DHV, Czech Republic

Anne Arquit Niederberger, Swiss AIJ Pilot Phase Secretariat

Rapporteur: Jane Ellis, OECD

11.00 - 11.30Coffee Break

11.30 - 13.00Panel session continues with discussion/questions.

13.00 - 14.30 Lunch break (sandwich lunch at the IEA)

14.30 - 18.00 Plenary session: working group 1

Working group 1: Market and Trade issues

Facilitator: Andrej Krancj, Ministry of Environment, Slovenia

Discussants on market power:Peter Bohm, Stockholm University

Tatsuyoshi Saijo, Osaka University

Discussants on competitiveness and WTO issues:

Annie Petsonk, Environmental Defense Fund

Jacob Werksman, FIELD

Rapporteur: Martina Bosi, IEA

18

Tuesday, 14 September 1999

9.00 - 12.30 Parallel sessions

Working group 2: Monitoring, reporting andverification requirements at domestic level

Facilitator: John Drexhage, Environment Canada

Discussants:

Einar Telnes, Det Norske Veritas

Tiit Kallaste, Stockholm Environment Institute -TallinnFlemming Tost, Deloitte & Touche

Jo Simons, Department of the Environment,Transport & the Regions, United KingdomRapporteur: Stéphane Willems, OECD

Working group 3: Eligibility, liability andresponses to non-compliance

Facilitator: Paul Lanser, Department of Trade &Industry, United Kingdom

Discussants:

Nuno Lacasta, Euronatura

Matthew Evans, IPE

Alexander Golub, Harvard Institute forInternational DevelopmentChristian Albrecht, State Secretariat for EconomicAffairs, SwitzerlandRapporteur: Richard Baron, IEA

12.30 - 14.30 Lunch break

14.30 - 17.30 Closing Plenary (wrap-up session)

Discussion of Working Group outcomes and conclusion

14.30 - 15.15 Outcome of Working Group 1: presentation and discussion

15.15 - 16.00 Outcome of Working Group 2: presentation and discussion

16.00 - 16.15 Coffee break

16.15 - 17.00 Outcome of Working Group 3: presentation and discussion

17.00 - 17.30 Conclusions by Midori Tani and concluding comments from all participants.

APPENDIX 2: LIST OF PARTICIPANTS

Chair: Ms. Midori TANIDirector, Global Environment Affairs OfficeMinistry of International Trade & Industry (MITI)1-3-1 Kasumigaseki, Chiyoda-kuTokyo 100-8901Tel: (81 3) 35 01 78 30Fax: (81 3) 35 01 76 97Email: tani-midori@miti.go.jp

AUSTRALIAMr. Patrick GIBBONSDepartment of Foreign Affairs & TradeThe R.G. Casey Building,John McEwan CrescentBarton ACT 2600Tel: (61 2) 62 61 26 53Fax: (61 2) 62 61 25 94Email: patrick.gibbons@dfat.gov.au

Dr. Jim HAGANGeneral Manager,Industry Policy DivisionAustralia TreasuryParkes PlaceParkes Act 2600Tel: (61 2) 62 63 44 05Fax: (61 2) 62 63 44 71Email: jhagan@treasury.gov.au

Ms. Linda MEISELAssistant ManagerClimate Change InternationalAustralia Greenhouse Office,King Edward TerraceParkes ACT 2600Tel: (61 2) 62 74 15 69Fax: (61 2) 62 74 14 39Email: linda.meisel@greenhouse.gov.au

Mr. Rob STURGISSFirst SecretaryPermanent Delegation of Australia to the OECDTel: (33 1) 40 59 33 59Fax: (33 1) 40 59 33 94Email: robert.sturgiss@dfat.gov.au

Mr. Ian TURLANDDepartment of Foreign Affairs and TradeR.G. Casey Building, John McEwen CrescentBarton ACT 2600Tel: (61 2) 6261 2608Fax: (61 2) 6261 2594Email: Ian.Turland@dfat.gov.au

Mr. Bruce WILSONManager, Greenhouse Response BranchDepartment of Industry, Science & ResourcesGPO Box 9839Canberra Act 2601Tel: (61 2) 62 13 78 84Fax: (61 2) 62 13 73 61Email: Bruce.Wilson@isr.gov.au

AUSTRIAMr. Dieter BEISTEINERFederal Ministry for the EnvironmentStubenbastei 5A-1010 ViennaTel: (43 1) 515 22 13 51Fax: (43 1) 515 22 73 01Email: dieter.beisteiner@bmu.gv.at

Mr. Ulrike ETEMEFederal Ministry for the EnvironmentStubenbastei 5A-1010 ViennaTel: (43 1) 515 22 13 24Fax: (43 1) 515 22 73 25Email: ulrike.eteme@bmu.gv.at

Mr. Klaus RADUNSKYDirectorFederal Environmental AgencySpittelauer Lände 5A-1090 ViennaTel: (43 1) 31 304 5534Fax: (43 1) 31 304 5800Email: radunsky@ubavie.gv.at

Mr. Stefan P. SCHLEICHERChair of Austrian Council on Climate ChangeUniversity of GrazUniversitaetsstrasse 15/F4A-8010 GrazTel: (43 316) 380 3440Fax: (43 316) 380 9520Email: sts@wsr.ac.at

20

BELARUSMr. Viktor KORBUTHead, Dept. of State Control for Use &Protection of Atmospheric AirMinistry of Natural Resources &Environmental Protection10 Kollektornaya str.,220048 MinskTel: (375 172) 20 47 71 / 20 47 57Fax: (375 172) 20 47 71 / 20 55 83Email: minproos@minproos.belpak.minsk.by

Ms. Svetlana RUDNEVAChief, Sector of EcologyCabinet of MinistersHouse of Government, Sovetskaya Str.220010 MinskTel: (375 172) 22 63 66Fax: (375 172) 22 66 65Email: minproos@minproos.belpak.minsk.by

BELGIUMMr. Thomas BERNHEIMExpertBureau Fédéral du Plan47-49 KunstlaanB-1000 BrusselsTel: (32 2) 507 7485Fax: (32 2) 507 7486Email: bt@plan.be

Ms. Eveline ROOIJMANSPolicy AdvisorFlemish Ministry for the EnvironmentE. Jacqmainlaan 156, bus 81000 BrusselsTel: (32 2) 553 81 30Fax: (32 2) 553 81 65Email: eveline.rooijmans@lin.vlaanderen.be

BULGARIAMrs. Lidia Ilieva ASSENOVASenior ExpertMinistry of Environment & Water22 Maria Luiza St.1000 SofiaTel: (359 2) 980 9989Fax: (359 2) 980 3926Email: ozon@mb.bia-bg.com

Mr. Teodor Dimitrov IVANOVSenior Expert and Coordinator of FCCCMinistry of Environment & Water22 Maria Luiza St.1000 SofiaTel: (359 2) 981 4412Fax: (359 2) 980 3926Email: ozon@mb.bia-bg.com

Ms. Daniela STOYTCHEVASenior ExpertMinistry of Environment & WaterW. Gladstone Str. 671000 SofiaTel: (359 2) 84 72 22 44Fax: (359 2) 986 48 48Email: moew@mb.bia-bg.com

CANADAMr. John R. DREXHAGEAssociate Director,Climate Change InternationalEnvironment CanadaLes Terrasses de la Chaudière (22ème étage)10 Wellington St.Hull, Quebec K1A 0H3Tel: (1 819) 994 5156Fax: (1 819) 953 5787Email: john.drexhage@ec.gc.ca

Mr. Ewa GAWRON-DOBROCZYNSKACommercial OfficerCanadian EmbassyUl. Matejki 1/500-481 Warsaw, PolandTel: (48 22) 629 8051 (ext. 3353)Fax: (48 22) 622 9803Email: wsaw-td@dfait-maeci.gc.ca

Mr. Éric LANDRYEnvironment DivisionNatural Resource Canada580 Booth StreetOttawa, Ontario K1A OE4Tel: (1 613) 996 0721Fax: (1 613) 947 6799Email: elandry@nrcan.gc.ca

Mr. William PALMERVice-PresidentCheminfo Services Inc.1706 Avenue Road, Suite 4Toronto, Ontario M5M 3Y6Tel: (1 416) 785 9051Fax: (1 416) 785 9876Email: cheminfo@netcom.ca

21

CANADA (Cont.)Mr. Satender SINGHPolicy Analyst,Climate Change and Energy DivisionDepartment of Foreign Affairs &International Trade125 Sussex DriveOttawa, Ontario K1A 0G2Tel: (1 613) 944 1455Fax: (1 613) 944 0064Email: satender.singh@dfait-maeci.gc.ca

CROATIAMr. Zvonimir KATUSINAssistant DirectorMeteorological & Hydrological ServiceGric 310 000 ZagrebTel: (385 1) 456 5706Fax: (385 1) 431 026Email: katusin@cirus.dhz.hr

CZECH REPUBLICMr. Lubomir NONDEKc/o Ministry of the EnvironmentDHV CR (Environmental Consultants)Taboritska 23Praha 3Tel: (420 2) 67 09 23 72Fax: (420 2) 67 09 23 60Email: nondek@bohem-net.cz

Mr. Jan PRETELHead, Dept. of Global Climate ChangeCzech Hydrometeorological InstituteNa Sabatce 17143 06 Prague 4Tel: (420 2) 44 03 24 14Fax: (420 2) 44 03 24 15Email: pretel@chmi.cz

Mr. Milos TICHYConsultantTristolicna 5150 00 Prague 5Tel: (420 2) 26 71 47 40Fax: (420 2) 26 71 43 60Email: milos.tichy@seznam.cz

DENMARKMr. Ture HAMMARProgramme ManagerDanish Energy Agency44 Ameliegade1256 Copenhagen KTel: (45 33) 92 67 94Fax: (45 33) 92 68 67Email: tha@ens.dk

Ms. Fanny MISSFELDTUNEPCollaborating Centre on Energy & EnvironmentP.O. Box 494000 RoskildeTel: (45 46) 32 22 88Fax: (45 46) 32 19 99Email: fanny.missfeldt@risoe.dk

Mr. Flemming TOSTDeloitte & ToucheH. C. Andersens Boulevard 21780 Kobenhavn VTel: (45 33) 76Fax: (45 33) 76Email: flemming.tost@deloitte.dk

Mr. Nicolai ZARGANISHead of SectionDanish Energy Agency44 AmaliegadeDK-1256 Copenhagen KTel: (45 33) 92 68 24Fax: (45 33) 92 68 67Email: nz@ens.dk

ESTONIAMr. Tiit KALLASTEProgramme DirectorStockholm Environment Institute Tallinn CentreLai 34, PO Box 16010502 TallinnTel: (37 2) 631 4200Fax: (37 2) 631 3240Email: tiit@seit.ee

Mr. Andres KRATOVITSCounsellorMinistry of the EnvironmentToompuiestee 24EE 15172 TallinnTel: (37 2) 626 2841Fax: (37 2) 626 2845Email: andres@ekm.envir.ee

22

FINLANDMr. Magnus CEDERLOFSenior Technical AdvisorMinistry of the EnvironmentPO Box 380FIN-00131 HelsinkiTel: (358 9) 19 91 94 66Fax: (358 9) 19 91 94 53Email: magnus.cederlof@vyh.fi

Ms. Erja FAGERLUNDSpecial AdviserMinistry of Trade & IndustryPO Box 3700131 HelsinkiTel: (358 9) 1608 8846Fax: (358 9) 160 2695Email: erja.fagerlund@ktm.vn.fi

Ms. Lena GRANVIKEU AssistantEnvironmental Protection DepartmentMinistry of the EnvironmentRatakatu 3PO Box 399FIN-00121 HelsinkiTel: (358 9) 1991 97 27Fax: (358 9) 1991 9630Email: Lena.Granvik@vyh.fi

Mr. Markku LEHTONENSenior AdvisorMinistry of the EnvironmentPO Box 380HelsinkiTel: (358 9) 1991 94 92Fax: (358 9) 1991 94 33Email: markku.lehtonen@vyh.fi

Mr. Heikki SISULAEnvironmental CounsellorMinistry of the EnvironmentPO Box 380FIN-00131 HelsinkiTel: (358 9) 1991 9490Fax: (358 9) 1991 9433Email: Heikki.Sisula@vyh.fi

FRANCEMr. Jean-Jacques BECKERChargé de missionMission interministerielle de l'effet de serre35 rue St Dominique75700 ParisTel: (33 1) 42 75 87 13Fax: (33 1) 47 53 76 34Email: jean-jacques.becker@mies.premier-ministre.gouv.fr

Mr. Cedric PHILIBERTSenior ConsultantUNEP / ADEMETour Mirabeau, 39-43 quai André CitroënParis 75015Tel: (33 1) 44 37 30 03Fax: (33 1) 44 37 14 74Email: cedric.philibert@unep.fr

Ms. Béatrice QUENAULTMission interministerielle de l'effet de serre35 rue St. DominiqueParisTel: (33 1) 42 75 87 14Fax: (33 1) 47 53 76 34Email: bqnault@worldnet.fr

GERMANYMs. Regina BETZFraunhofer Institute for Systems andInnovation ResearchBreslauer Strasse 48D-76139 KarlsruheTel: (49 721) 68 09 249Fax: (49 721) 68 91 52Email: betz@isi.fhg.de

Mr. Dietrich BROCKHAGENFederal Ministry for the Environment, NatureConservation & Nuclear SafetyBernkasteler Strasse 8PO Box 12 06 29D-53048 BonnTel: (49 228) 305 2313Fax: (49 228) 305 3337Email: brockhagen.dietrich@bmu.de

Mr. Enno HARDERSFederal Ministry for the Environment, NatureConservation & Nuclear SafetyBernkasteler Strasse 8PO Box 12 06 29D-53048 BonnTel: (49 228) 305 2315Fax: (49 228) 305 3337Email: harders.enno@bmu.de

23

GERMANY (Cont.)Mr. Anke HEROLDOeko-InstitutNovalisstrasse 1010115 BerlinTel: (49 30) 2804 8686Fax: (49 30) 2804 8688Email: herold@oeko.de

Mr. Franz Josef SCHAFHAUSENHead of Division Z II 6Federal Ministry for Environment, NatureConservation & Nuclear SafetyBernkasteler Strasse 8P.O.B. 12 06 2953048 Bonn 1Tel: (49 228) 305 2350Fax: (49 228) 305 3971Email: schafhausen.franzj@bmu.de

Mr. Manfred SCHULZDeputy Head of DivisionFederal Ministry of Economics and TechnologyPO Box 14 02 60D-53107 BonnTel: (49 228) 615 2168Fax: (49 228) 615 3457Email: buero-iiipool1@bonn1.bmwi.bund400.de

GREECEDr. Constantin CHATZIYANNAKISHead of SectionMinistry for Development80 Michalakopoulou Str.,10192 AthensTel: (30 1) 770 3106Fax: (30 1) 770 9346 / 771 7612

Ms. Olga DRITSA-DOSCHORIHead of DepartmentMinistry of National Economy1, Coryarou str. and Ermou str.Athens 10563Tel: (30 1) 328 6323Fax: (30 1) 328 6309

Mr. Konstantinos HATZIGIANNAKISHead of DivisionEnergy Policy DirectorateMinistry for Development80 Michalakopoulou Str.10192 AthensTel: (30 1) 777Fax: (30 1) 770

Mr. Yorgos KLIDONASCounselorPermanent Delegation of Greece to the OECDTel: (33 1) 45 02 24 03Fax: (33 1) 42 21 40 09Email: klidonasyor@hotmail.com

Mr. Dimitris P. LALASDirectorNational Observatory of AthensLofos Nymfon, Thission11810 AthensTel: (30 1) 34 90 104Fax: (30 1) 34 90 120Email: lalas@env.meteo.noa.gr

Mr. Panayotis NICOLARASDirectorMinistry for Development80 Michalakopoulou Str.10192 AthensTel: (30 1) 777 9583Fax: (30 1) 770 9346

Ms. Elpida POLITIMinistry for the Environment, Physical Planningand Public Works15, Amaliados StreetAthens 115-23Tel: (30 1) 643 5740Fax: (30 1) 643 4470Email: deu@minenv.gr

HUNGARYMs. Zsuzsanna IVANYIProject ManagerRegional Environmental Center for Central &Eastern Europe2000 SzentendreAdy Endre 9-11Tel: (36 26) 311 127Fax: (36 26) 311 281Email: zivanyi@rec.org

Dr. Tamàs PALVÖGYIDirector GeneralDepartment of Strategy Planning andCo-operationMinistry of EnvironmentPO Box 3511394 BudapestTel: (36 1) 457 3447Fax: (36 1) 201 2091Email: palvoelgyi.tamas@ktmdom2.ktm.hu

24

HUNGARY (Cont.)Mr. Istvàn POMAZIChief AdvisorDepartment of Strategy Planning andCo-operationMinistry of EnvironmentPO Box 3511394 BudapestTel: (36 1) 457 3383Fax: (36 1) 201 2091Email: pomazi@kik.ktm.hu

ITALYDr. Giovannino DI PALMAMinistry of IndustryVia Molise 200187 RomeTel: (39 06) 47 05 27 00Fax: (39 06) 47 88 79 67

JAPANMr. Kazuhiro ISHIKAWAChief, Global Environmental Affairs OfficeMinistry of International Trade & Industry(MITI)1-3-1 Kasumigaseki, Chiyoda-kuTokyo 100-8901Tel: (81 3) 35 01 78 30Fax: (81 3) 35 01 76 97Email: ishikawa_kazuhiro@miti.go.jp

Mr. Shigemoto KAJIHARADirector,Office of International Strategy onClimate ChangeGlobal Environment DepartmentEnvironment Agency1-2-2 KasumigasekiChiyoda-KuTokyo 100-8975Tel: (81 3) 5521 8246Fax: (81 3) 3581 3348Email: SHIGEMOTO_KAJIHARA@eanet.go.jp

Mr. Daisuke MATSUNAGADirector,Climate Change DivisionMinistry of Foreign Affairs2-2-1, KasumigasekiChiyoda-ku, Tokyo 100-0013Tel: (81 3) 35 81 38 82 or 35 80 33 11 (ext.2799)Fax: (81 3) 35 92 03 64Email: daisuke.matsunaga@mofa.go.jp

Mr. Kazuhiro MORIMOTOPermanent Delegation of Japan to the OECDTel: (33 1) 53 76 61 92Fax: (33 1) 45 63 05 44Email: morimoto@deljp-ocde.fr

Prof. Tatsuyoshi SAIJOInstitute of Social and Economic ResearchOsaka UniversityIbarakiOsaka 567-0047Tel: (81 6) 68 79 85 71Fax: (81 6) 68 78 27 66Email: saijo@iser.osaka-u.ac.jp

Ms. Keiko SEGAWAPermanent Delegation of Japan to the OECDTel: (33 1) 53 76 61 82Fax: (33 1) 45 63 05 44Email: segawa@deljp-ocde.fr

KOREAMr. Jai-Chul CHOIDirector, Environment Co-operation DivisionMinistry of Foreign Affairs and Trade1105 Lima Building, 146-1 Soosong-dong,Chongro-kuSeoul 110-775Tel: (82 2) 720 2329Fax: (82 2) 722 7581Email: mofatenv@chollian.net

Mr. Young-Dae JEONGSenior Programme ManagerMinistry of EnvironmentGovernment Complex KwacheonKwacheon 427 760Tel: (82 2) 504 9245Fax: (82 2) 504 9206Email: ydjeong@me.go.kr

Mr. In-Su LEEDirector General for International Co-operationMinistry of EnvironmentGovernment Complex KwachonKwachon 422-960Tel: (82 2) 504 9245Fax: (82 2) 504 9206Email: islee@me.go.kr

25

LATVIAMrs. Ingrida APENESenior OfficialMinistry of Environmental Protection &Regional Development25 Peldu Str.LV-1494 RigaTel: (37 1) 702 6508Fax: (37 1) 782 0442Email: erna@varam.gov.lv

Mr. Valdis KREGERSDirector, Energy DepartmentLatvian Development AgencyBrivibas Str. 55LV-1010 RigaTel: (371) 701 3265Fax: (371) 782 1489Email: doe@lda.gov.lv

Mr. Janis REKISSpecialistDepartment of EnergyLatvian Development AgencyBrivibas Str. 55LV-1010 RigaTel: (371) 701 3267Fax: (371) 782 1489Email: jrekis@lda.gov.lv

LITHUANIAMr. Petras KORKUTISHeadLithuanian Hydrometeorological Service6, Rudnios StreetVilnius GSP 2600Tel: (370 2) 751 194Fax: (370 2) 724 160Email: korkutis@meteo.lt

MEXICOMs. Soledad LEALCounsellorPermanent Delegation of Mexico to the OECDTel: (33 1) 53 67 86 13Fax: (33 1) 47 20 33 92Email: sleal@secofi.gob.mx

Mr. Blas PEREZ HENRIQUEZPhd CandidateGoldman School of Public PolicyUniversity of California, Berkeley2607 Hearst AvenueBerkeley, CA 94720 7320Tel: (1 510) 643 5170Fax: (1 510) 643 9657Email: blasterx@socrates.berkeley.edu

Mr. Fernando TUDELAMinistry of Environment, Renewable Resources& Fisheries (SEMARNAP)Lateral Anillo Periférico Sur 4209, 6th floorFracc. Jardines de la Montaña, Tlalpan14210 México D.F.Tel: (52 5) 628 0704Fax: (52 5) 628 0706Email: ftudela@buzon.semarnap.gob.mx

NETHERLANDSMr. L.J.M. BLANSON HENKEMANSManager, Dutch JI ProgrammeMinistry of Economic AffairsBezuidenhoutseweg 6Den HaagTel: (31 76) 354 5772Fax: (31 70) 379 7423Email: l.j.m.blansonhenkemans@minez.nl

Mr. Bill HAREClimate Change Policy AdvisorGreenpeace InternationalKeizersgracht 1761016 DW AmsterdamTel: (31 20) 523 6222Fax: (31 20) 523 6200Email: bhare@ams.greenpeace.org

Mr. Wim IESTRAMinistry of EnvironmentPO Box 309452500 GX The HagueTel: (31 70) 339 4086Fax: (31 70) 339 1310Email: wim.iestra@dle.dgm.minvrom.nl

26

NETHERLANDS (Cont.)Mr. Tinus PULLESTNO Institute of Environmental Sciences,Energy Research & ProcessPO Box 3427300 AH ApeldoornTel: (31 55) 549-3762Fax: (31 55) 549 3252Email: M.P.J.Pulles@mep.tno.nl

Mr. Walter RUIJGROKKEMAUtrechtseweg 3106800 ET ArnhemTel: (31 26) 356 2374Fax: (31 26) 446 0483Email: w.j.a.ruijgrok@kema.nl

Mr. Toon VAN HARMELUSTNO Institute of Environmental Sciences,Energy Research & ProcessPO Box 3427300 AH ApeldoornTel: (31 55) 549 3762Fax: (31 55) 549 3252Email: a.k.vanharmelus@mep.tno.nl

NEW ZEALANDMr. Peter ALSOPPolicy AnalystMinistry of CommercePO Box 1473WellingtonTel: (64 4) 474 2616Fax: (64 4) 499 0969Email: peter.alsop@moc.govt.nz

Mr. Stuart CALMANSenior Policy AnalystMinistry for the Environment84 Boulcott Street, PO Box 10-362WellingtonTel: (64 4) 917 7411Fax: (64 4) 917 7523Email: sc@mfe.govt.nz

NORWAYMr. Lars Erik AAMOTAdviserRoyal Ministry of Petroleum & EnergyPO Box 8148 Dep.N-0033 OsloTel: (47 22) 24 63 57Fax: (47 22) 24 95 66Email: lars-erik.aamot@oed.dep.telemax.no

Mr. Georg BØRSTINGAdviserMinistry of the EnvironmentPO Box 8013 DepN-0030 OsloTel: (47 22) 24 60 92Fax: (47 22) 24 27 55Email: geb@md.dep.no

Ms. Anne Johanne ENGERAdviserNorwegian Pollution Control AuthorityP.O. Box 8100 Dep.0032 OsloTel: (47 22) 57 36 43Fax: (47 22) 67 67 06Email: anne-johanne.enger@sft.telemax.no

Mr. Kjersti FLATHENMinistry of FinanceP.O. Box 8008 Dep0030 OsloTel: (47 22) 24 43 66Fax: (47 22) 24 95 05Email: Kjersti.Flathen@finans.dep.no

Ms. Marte GERHARDSENExecutive OfficerRoyal Ministry of Foreign Affairs7 Juni Plassen - Victoria TerrasseP.O. Box 8114 DepN-0032 OsloTel: (47 22) 24 36 03Fax: (47 22) 24 95 80Email: marte.gerhardsen@ud.dep.telemax.no

Mr. Peer STIANSENAdviserMinistry of the EnvironmentPO Box 8013, Dep.N-0030 OsloTel: (47 22) 24 59 67Fax: (47 22) 24 27 55Email: sti@md.dep.no

Mr. Einar TELNESDet Norske VeritasVeritasveien 1N-1322 HovikTel: (47 67) 57 78 17Fax: (47 67) 57 90 71Email: einar.telnes@dnv.com

27

NORWAY (Cont.)Mr. Ole Christian WASENDENSenior Executive OfficerMinistry of Industry and TradePO Box 8014 Dep.N-0030 OsloTel: (47 22) 24 05 33Fax: (47 22) 24 05 05Email:ole-christian.wasenden@nhd.dep.telemax.no

POLANDMr. Wieslaw PAWLIOTTIHead of DivisionMinistry of EconomyPlac Trzech Krzyzy 3/500-507 WarsawTel: (48 22) 628-9129Fax: (48 22) 628-0882

Mr. Maciej J. SADOWSKIVice DirectorNational Fund for Environment Protection andWater ManagementKolektorska Str. 401-692 WarsawTel: (48 22) 849-0079 (ext. 358)Fax: (48 22) 853 37 40Email: g.konopko@nfosigw.gov.pl

PORTUGALMrs. Maria ARLETE DE GOUVEIAConseillerMinistry of Industry & EnergyAv. 5 de Outubro, 87LisbonTel: (351 21) 792 2720Fax: (351 21) 793 9540

Ms. Teresa COSTA PEREIRADireccão Geral do AmbienteRua da Murgueira - Zambujal2720 865 AmadoraTel: (351 21) 472 8200Fax: (351 21) 471 9075Email: teresa.costa-pereira@dga.min-amb.pt

Mr. Mario Placido M. GARCIAHead of DivisionMinisterio da EconomiaAve. 5 de Outubro, 871050 LisbonTel: (351 21) 792-0753Fax: (351 21) 793 9540Email: Ambiente@dge.pt

Mr. Nuno LACASTADirectorCentre for Environmental Law &Sustainable DevelopmentEdificio Leste - Tapada da AjudaLisbonTel: (351 21) 361 6748Fax: (351 21) 361 6752Email: nuno.lacasta@euronatura.pt

Ms. Teresa NEVES ANACLETODivisão de Ambiente AtmosféricoRua da MurgueiraZambujal2720 865 AmadoraTel: (351 21) 472 14 55Fax: (351 21) 471 9074Email: teresa.anacleto@dga.min-amb.pt

ROMANIAMrs. Serena ADLEREnvironmental Senior Adviser andCounsellor to the MinisterMinistry of Waters, Forests &Environmental Protection12, Bd. Libertatii , sector 570 005 BucharestTel: (40 1) 410 0215Fax: (40 1) 430 2141Email: sadler@eco.pumps.pub.ro

Ms. Lavinia ANDREIDirectorTERRA III - CANCEEBrasov Str., No. 19, Bl OD5, Sc. A, ap22. S6773691 BucharestTel: (40 1) 745 2487Fax: (40 1) 745 2487Email: iandrei@pcnet.pcnet.ro

RUSSIAN FEDERATIONMr. Vladimir H. BERDINChief, Division on Global EnvironmentalAgreementsRussian State Committee on EnvironmentalProtection4/6 Bolshaya Grusinskaya St.123 812 MoscowTel: (7 095) 254 6656Fax: (7 095) 254 8283Email: aber@aha.ru (home)intereco@doe.ru (office)

28

RUSSIAN FEDERATION (Cont.)Mr. Alexander GOLUBSenior EconomistHarvard Institute for International Development34 Bolshaya Cheryomushkinskaya, Office 218a117259 MoscowTel: (7 095) 120 3020 / 128 9385Fax: (7 502) 224 7698Email: AGolub@hiid.harvard.edu

Mrs. Marina E. LENEVAPrincipal Specialist, ROOM 413Ecological and economic Research andInformation Center8/1 Kedrova Street117 874 MoscowTel: (7 095) 413 6263Fax: (7 095) 413 6263Email: alexey.kokorin@g23.relcom.ru

Mr. Oleg PLOUJNIKOVHead of DivisionMinistry of Fuel and EnergyKitaigirodsky proezd, 7103074 MoscowTel: (7 095) 220 6247Fax: (7 095) 929 1627Email: pob@dataforce.net

SLOVAK REPUBLICMs. Gabriela FISCHEROVAMinistry of the EnvironmentNám, L'. Stúra 1812 35 BratislavaTel: (421 7) 59 56 25 46 / 59 56 22 21Fax: (421 7) 59 56 26 62 / 59 56 20 31Email: fischerova.gabriela@lifeenv.gov.sk

Mr. Jozef STAHLDepartment of Energy Policy and RegulationMinistry of EconomyMierova 19Bratislava 827 15Tel: (421 7) 48 54 19 20Fax: (421 7) 48 54 39 18Email: stahl@economy.gov.sk

SLOVENIAMr. Andrej KRANJCCounsellor to the GovernmentMinistry of Environment,Hydrometeorological InstituteVojkova 1/b1000 LjubljanaTel: (386 61) 178 4255Fax: (386 61) 133 1396Email: andrej.kranjc@rzs-hm.si

Mr. Ivo NOVAKCounsellor to the GovernmentMinistry of Economic AffairsKotnikova 51000 LjubljanaTel: (386 61) 178 3287Fax: (386 61) 132 6094Email: Ivo.Novak@gov.si

SWEDENMr. Leif BERNERGARDSwedish Environmental Protection AgencyS-106 48 StockholmTel: (46 8) 698 1119Fax: (46 8) 698 1504Email: leif.bernergard@environ.se

Mr. Olle BJORKEnergy DivisionMinistry of IndustryS-103 33 StockholmTel: (46 8) 405 1997Fax: (46 8) 405 2280Email: olle.bjork@industry.ministry.se

Ms. Gudrun KNUTSSONHead of Section, International Climate-relatedEnergy Investment ProgrammeSwedish National Energy AgencyAdministrationBox 310S-631 04 EskilstunaTel: (46 16) 544 2072Fax: (46 16) 544 2264Email: gudrun.knutsson@stem.se

SWITZERLANDMs. Anne ARQUIT NIEDERBERGERProgram ManagerFederal Office for Foreign Economic AffairsEffingerstrasse 13003 BerneTel: (41 31) 323 0885Fax: (41 31) 324 0958Email: anne.arquit-niederberger@seco.admin.ch

Mr. Urs BRODMANNFactor Consulting + Management Ltd.Binzstrasse 188045 ZurichTel: (41 1) 455 6100Fax: (41 1) 455 6069Email: urs.brodmann@factorag.ch

29

SWITZERLAND (Cont.)Mr. José ROMEROSwiss Federal Office of Environment, Forestsand LandscapeCH-3003 BerneTel: (41 31) 322 6862Fax: (41 31) 323 0349Email: jose.romero@buwal.admin.ch

UKRAINEMr. Vladimir DEMKINExpert to theMinistry for Environmental Protection & NuclearSafety5 Khreschatyk Str.Kyiv 1Tel: (380 44) 565 8505Fax: (380 44) 565 8505Email: demkin@ukrpack.net

Mr. Georgy PANCHENKO Ph. D.Senior ExpertAgency for Rational Energy Use and ecologyP.O. Box 48Kyiv 252133Tel: (380 44) 268 8088Fax: (380 44) 268 8451Email: arena@arena.viaduk.net

UNITED KINGDOMMs. Melanie EDDISConsultantKPMG8 Salisbury SquareLondon EC4Y 8BBTel: (44 171) 311 8839Fax: (44 171) 311 8971Email: Melanie.Eddis@kpmg.co.uk

Mr. Matthew EVANSIPEInternational House,1 St. Katherine's WayLondon E1 9UNTel: (44 171) 265 3642Fax: (44 171) 481 8485Email: matthewe@ipe.uk.com

Ms. Charlotte GREZOManager, Climate Change ProgrammesThe British Petroleum Company plcBritannic House, 1 Finsbury CircusLondonTel: (44 171) 496 4861Fax: (44 171) 496 4707Email: grezoca@bp.com

Mr. Nicholas HUGHESBritish Petroleum Company plc, TheBritannic House, 1 Finsbury CircusLondonTel: (44 171) 496 4861Fax: (44 171) 496 4707Email: hughesn@bp.com

Mr. Richard JACKSONSenior Policy Advisor on Economics andEnvironmentConfederation of British Industry (CBI)103 New Oxford StreetLondon WC1A 1DUTel: (44 171) 395 8052Fax:Email: richard.jackson@cbi.org.uk

Mr. Paul LANSERSenior EconomistDepartment of Trade & Industry51 Buckingham Palace RoadLondon SW1W 9SSTel: (44 171) 215 5837Fax: (44 171) 215 1071Email: paul.lanser@epad.dti.gov.uk

Mr. James LOWENDepartment of the Environment, Transport &the RegionsAshdown House123 Victoria StreetLondon SW1E 6DETel: (44 171) 890 5212Fax: (44 171) 890 5219Email: james_lowen@detr.gsi.gov.uk

Ms. Fiona MULLINSSenior ConsultantEnvironmental Resources ManagementEaton House, Wallbrook Court,North Hinksey LaneOxford OX2 0QSTel: (44 1865) 384 869Fax: (44 1865) 384 812Email: fxm@ermuk.com

Ms. Jo SIMONSEconomic AdvisorDepartment of the Environment, Transport &the RegionsAshdown House123 Victoria StreetLondon SW1E 6DETel: (44 171) 890 5206Fax: (44 171) 890 5219Email: jo_simons@detr.gsi.gov.uk

30

UNITED KINGDOM (Cont.)Mr. Jacob WERKSMANSenior LawyerFIELD46-47 Russell SquareLondon WC1B 4JPTel: (44 171) 637 7950Fax: (44 171) 637 7951Email: jw18@soas.ac.uk

UNITED STATESMr. Joe ALDYCouncil of economic AdvisersTel: (1 202) 395 1455Fax: (1 202) 395 6870Email: joseph_e_aldy@cea.eop.gov

Mr. Richard BRADLEYSenior Advisor for Global ChangeUS Department of Energy1000 Independence Ave., SWWashington DC 20585Tel: (1 202) 586 0154Fax: (1 202) 586 4341Email: EconoNut@aol.com /Richard.Bradley@hq.doe.com

Mr. Lawrence E. COHENInternational EconomistOffice of International Energy andCommodities PolicyUS Department of StateWashington DC 20520-3535Tel: (1 202) 647 1486Fax: (1 202) 647 4037Email: COHENLE@state.gov

Mr. David D. DONIGERCounsel to the Assistant Administrator for Air &RadiationUS EPA401 M Street SW (6101)Washington DC 20460Tel: (1 202) 260 7400Fax: (1 202) 260 5155Email: doniger.david@epa.gov

Ms. Shari FRIEDMANUS EPA401 M Street SW (6101)Washington DC 20460Tel: (1 202) 260 9718Fax: (1 202) 260 6405Email: friedman.shari@epa.gov

Ms. Marcia GOWENSenior ConsultantICF Consulting Inc1850 K Street, Suite 1000WashingtonTel: (1 202) 862 2967Fax: (1 202) 862 1144Email: MGowen@icfkaiser.com

Mr. Johannes HEISTEREconomistThe World Bank1818 H Street, NWTel: (1 202) 458 4280Fax: (1 202) 522 2130Email: JHEISTER@worldbank.org

Mr. Steven LEEUS Department of EnergyOffice of Policy1000 Independence Ave., SWWashington DC 20585Tel: (1 202) 586 0836Fax: (1 202) 586 4341Email: steven.lee@hq.doe.gov

Ms. Jennifer MACEDONIAUS EPA401 M. Street SW 6204JWashington, DC 20460Tel: (1 202) 564 9123Fax: (1 202) 565 2141Email: macedonia.jennifer@epa.gov

Ms. Jennifer MORGANSenior Program AssociateWorld Wildlife Fund - US1250 24th Street NW Suite 600Washington DCTel: (1 202) 778 9514Fax: (1 202) 331 2391Email: jennifer.morgan@WWFUS.org

Mr. Richard MORGENSTERNUS Department of StateWashington DC 20520-3535Tel: (1 202) 647 0367Fax: (1 202) 647 4037Email: morgenst@hotmail.com

31

UNITED STATES (Cont.)Mr. John PALMISANODirector, Environmental Policy & ComplianceEnron Corp.1775 Eye Street, NW, Suite 800WashingtonTel: (1 202) 466 9159Fax: (1 202) 331 4717Email: johnpalmisano@yahoo.com

Ms. Annie PETSONKInternational CounselEnvironmental Defense Fund1875 Connecticut Ave,NW. 10th Floor, Suite 1016Washington DC 20009Tel: (1 202) 387 3500Fax: (1 202) 234 6049Email: annie@edf.org

Ms. Susan WICKWIREForeign Affairs OfficerUS Department of StateOES/EGC, Room 4330Washington DC 20520-7818Tel: (1 202) 647 4069Fax: (1 202) 647 0191Email: wickwires@state.gov

Mr. Glenn WISERProject AttorneyCenter for International Environmental Law(CIEL)1367 Connecticut Avenue, NW Suite #300Washington DC 20036Tel: (1 202) 785 8700Fax: (1 202) 785 8701Email: glennwiser@aol.com

UNFCCC SECRETARIATMr. Tahar HADJ-SADOKCoordinator, Science & Technology ProgrammeUN FCCC SecretariatPO Box 260124D-53153 BonnGermanyTel: (49 228) 815 1000Fax: (49 228) 815 1999Email: secretariat@unfccc.de

Ms. Christine ZUMKELLERManagerUN FCCC SecretariatPO Box 260124D-53153 BonnGermanyTel: (49 228) 815 1620Fax: (49 228) 815 1999Email: secretariat@unfccc.de

32

OECD SECRETARIAT 2, rue André Pascal, 75775 Paris Cedex 16

ENVIRONMENT DIRECTORATE

Pollution Prevention and Control Division - Fax: (33 1) 45 24 78 76

Jan CORFEE MORLOT (Principal Administrator) Tel: (33 1) 45 24 79 24

Jane ELLIS (Administrator) Tel: (33 1) 45 24 15 98

Stéphane WILLEMS (Administrator) Tel: (33 1) 45 24 96 97

Aleksi HOKKANEN (Consultant) Tel: (33 1) 45 24 76 93

Lyndia LEVASSEUR (Secretariat) Tel: (33 1) 45 24 76 93

Carolyn STURGEON (Secretariat) Tel: (33 1) 45 24 19 66

INTERNATIONAL ENERGY AGENCY 9, rue de la Féderation, 75739 Paris CEDEX 15

Energy & Environment Division - Fax: (33 1) 40 57 67 09

Alessandro LANZA (Principal Administrator) Tel: (33 1) 40 57 67 23

Richard BARON (Administrator) Tel: (33 1) 40 57 67 24

Martina BOSI (Administrator) Tel: (33 1) 40 57 67 22

Maggy MADDEN (Secretariat) Tel: (33 1) 40 57 67 17