Scientific Interest and Novelty

This study has carried out extensive economic, technical, environmental and social evaluations of pilot-phase JI projects between donors from Western Europe, and hosts in Central and Eastern Europe. Site visits have been undertaken to collect and to verify good quality operating data for the selected projects. This data has been used to calculate the values of four critical accounting variables for each of the case studies against a range of credible baselines. Scenario analysis and stochastic simulation techniques have been used to estimate the impact of uncertainty on these variables. In addition, the study has performed broad environmental and social assessments of the case study projects. It is believed that this evaluation represents the most detailed and wide-ranging assessment anywhere of bilateral energy-sector investment projects carried out during the FCCC’s AIJ "pilot-phase".

This study has carried out a thorough analysis of the crediting arrangements established under the Kyoto Protocol. It has drawn attention in particular to the implications of the potential for "interim period banking" of emission reduction credits under the Clean Development Mechanism. This analysis represents the first quantitative assessment of the environmental cost of introducing this degree of flexibility into global climate policy.

This study has taken a unique approach to the operationalisation and to the evaluation of JI. The work has highlighted that JI operates under multiple objectives and is defined by a variety of operating parameters. It has shown that each operational form of JI offers different incentives for gaming, and performs very differently in terms of underlying objectives such as environmental effectiveness, equity and economic efficiency. This study is unique in illustrating how decision analysis techniques could be applied to the evaluation of different operational forms of JI. In addressing the management of irreducible uncertainty in the evaluation of emission reductions and costs, this study has proposed an innovative operational framework in which standardised procedures are combined with institutional safeguards.

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