JI finally accredits first third-party verifier

The Kyoto Protocol's Joint Implementation (JI) mechanism has accredited its first third-party verifier, TÜV SÜD Industrie Service GmbH, almost 10 years after the UN-backed carbon offsetting mechanism was first agreed upon.

The JI scheme operates in a similar way to the Clean Development Mechanism (CDM), allowing those in developed countries to invest in emissions reduction projects overseas to gain carbon credits.

But whereas the CDM is aimed at driving investment to projects in developing countries, JI projects can be undertaken in any developed country, classified as Annex I. The bulk of JI projects so far have been located in emerging economies, such as Russia and Ukraine.

TÜV SÜD Industrie Service GmbH will be responsible for ensuring that any projects undertaken under the JI genuinely result in reductions in carbon emissions and are truly "additional" and would not have happened without the authorisation to sell JI credits.

To date only one project, in Ukraine, has had its emissions reductions officially verified under the scheme, compared with more than 1,400 in the CDM.

Critics claim the JI was only set up as a sop to those emerging economies that felt they would miss out on inward investment as a result of their exclusion from the CDM.

They argue that the development of the market has been slow because of a lack of interest from buyers and sellers which prefer to target the more mature CDM market, as well as an absence of political backing. Ukraine, for example, only finalised regulations governing its involvement in the JI last year, while Russia still has not done so.

Allessandro Vitelli, director of information services at analyst IDEAcarbon said JI projects were also hampered by the fact that they had to compete with CDM projects.

"For buyers, it is cheaper to invest in projects in Latin America and Asia and there is more regulatory certainty," he said, adding that despite widespread ciriticism of the the scheme, reform is unlikely in the short term. "There is a body of opinion that says that the CDM and the JI will eventually morph into one with China, the US and Russia all investing in projects in each other. Any root and branch of the CDM before then is unlikely," he explained.