Joint Implementation

A Kyoto Protocol flexible mechanism that helps countries with binding greenhouse gas emissions reduction commitments to meet their targets. Emitters in capped countries acquire carbon credits through what are referred to as project-based transactions, meaning that emitters assist specific GHG reduction projects. A JI project is defined as one Annex I country contributing to a carbon project in another Annex I country, in contrast to a Clean Development Mechanism project, in which an Annex I country invests in a carbon project in a Non-Annex I country.  More specifically, Annex I includes the subset Annex II, OECD countries which were not economies in transition (EIT) in 1992, and Annex II countries acquire credits through investing in projects in non-Annex II countries.  Most JI projects are expected to take place in countries with economies in transition, with Russia and Ukraine currently on track to host the greatest number of JI projects.JI is established by Article 6 of the Kyoto Protocol which provides that a country included in Annex I can invest in projects that reduce emissions in another capped country as an alternative to domestic emission reductions.  JI, like the other flexible mechanisms, helps to lessen the economic burdens of compliance by allowing countries to invest in reductions where they can be achieved at a lower cost. 

There are two procedures or 'tracks' for implementing JI projects. Track 1 is for an Annex 1 country that has met all of its eligibility and reporting requirements under Kyoto. It can issue ERUs to a project, which can then transfer them to the investing entity. Track 2 is relevant to an Annex 1 country that is not in compliance with these requirements. An external body must then verify ERUs generated by a project through a procedure similar to that of the CDM. The host party must meet several requirements regarding its Assigned Amount and national registry before it can issue and transfer ERUs.

The process of receiving credit for JI projects is somewhat complex. Emission reductions are awarded credits called Emission Reduction Units (ERUs), where one ERU represents an emission reduction equaling one tonne of CO₂ equivalent. The ERUs come from the host country's pool of assigned emissions credits, known as AAUs. Each Annex I party has a predetermined amount of AAUs, calculated on the basis of its 1990 greenhouse gas emission levels.  By requiring JI credits to come from a host country's pool of AAUs, the Kyoto Protocol ensures that the total amount of emissions credits among Annex I parties does not change for the duration of the Kyoto Protocol's first commitment period