Experience with JI projects in the Czech Republic

1

• Experience with JI projects in the Czech
  Republic
  
• Climate Change Unit
• Tomas Chmelik

Climate Chnage Unit Ministry of the Environment
of the Czech Republic Vrovická 65 Praha 10,
100 10?
Phone [phone] Fax [phone]
E-mail Tomas_Chmelik_at_env.cz
2
JI status in Czech Republic

• JI phase started in January 2002
• Interest from potential investor countries (The
  Netherlands, Austria, Japan, Germany, Denmark)
  
• PCF WB cooperation learning approach
• Methodology prepared, some capacity building
  made
  
• Assessment of projects according to methodology
  started some problems detected
  
• Following areas identified as a key ones

3
Where and how to find good JI projects?

• Czech experience lack of supply (enough
  demand)
  
• Transaction costs high (identifying the project,
  preparing the project as a JI)
  
• Potential reduced in countries with high
  environmental and technological standards
  (problem of additionality)
  
• EU ETS big installations with big potential for
  reductions covered by EU ETS, some others
  indirectly linked (double counting problem),
  extension in future
• Portfolio approach complicated, but could be a
  solution
  

4
Methodical approach

• Clear and simple, with defined deadlines and
  types of documents required for assessment
  
• Standardized and transparent
• Coordination with others (investor host)
• Use maximum of domestic sources (capacity
  building) cheaper and often better alternative
  
• Routine approach but with a space to deal with
  specific (non-standard) projects

5
Definition of responsibilities

• Who is owner of ERUs generated by project?
• Responsibility of host government
• Responsibility of investor government
• Responsibility of project owner
• Responsibility of intermediators, advisors, other
  buyers

6
Contractual issues, risk management

• Contractual issues one of the most important and
  most expensive parts of the project
  
• Complicated by different legal systems of
  investor and host (related to definition of
  responsibilities)
  
• Dealing with risks in a proper way, balanced
  approach
  
• Kyoto risk
• Legal advisors expensive, especially for small
  projects
  
• Standardized contracts a solution?

7
Funding issues

• Co-financing essential revenue from ERUs not
  sufficient for even essential part of funding,
  often available on delivery
  
• Low prices at the moment (Kyoto risk)
• Only a good project can be turned into a good
  JI!
  
• Political background what are the money used
  for
  
• What if project subsidised by a state (support of
  renewables for example)?

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Alternatives ?

• Article 17 trading (IET) possible way forward
• Utilization of AAU surplus in a way of recycling
  the revenue into concrete projects against real
  emission reductions (green investment)
  
• Fund approach (coupling of various funding
  resources in one institution) one of the
  options