Implementation of Article 6 of the Paris Agreement and the Joint
Crediting Mechanism (JCM)
Uga Maiko (Ministry of the Environment, Japan)

Session 2

Implementation of Article 6 of the Paris Agreement and the Joint Crediting Mechanism (JCM)
Uga Maiko (Ministry of the Environment, Japan)
Contents

With a focus on the Paris Agreement and JCM, I will focus on three specific topics in my presentation.

I

have been talking a lot about the JCM at meetings like COP, but it is actually the first time for me to make apresentation in front of a Japanese audience.

I may be a little bit off of what you really want to learn about,so please talk to me in person after my presentation, if it is necessary.

The first topic is related to the outcome of the negotiations at the COP25, and I would like to especiallytalk about the market mechanism of Article 6.
government’s promotion of the JCM.

The second topic is recent developments on the Japanese

The third topic that is attracting a lot of attention is the Carbon

Offsetting and Reduction Scheme for International Aviation1 (CORSIA) effort.
Results of the COP25 discussions

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https://www.icao.int/environmental-protection/CORSIA/Pages/default.aspx

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Taking into account what I have said earlier, I would like to take a step back and go over the outline of theParis Agreement which was adopted in 2015.
be starting.

In 2020, a new international framework for climate change will

This is quite different from the Kyoto Protocol2.

During the Kyoto Protocol discussion, thedeveloped and the developing countries were in separate categories.

However, in the Paris Agreement,

regardless of the categories, nationally determined contribution (NDC) requires that each country set targets
and strives towards the target.

In promoting the Paris Agreement, market mechanism is also included as away of achieving the goals, as stipulated in Article 6.
In the Paris Agreement, there is a 2°C target, but it also needs to achieve 1.5°C, so whether the 2°C target
is really achievable or not is also debatable.

It is a very ambitious goal.

In order to achieve that, all thestakeholders, including the private sector, civil society, and various other activities would have to beincorporated.

Market mechanism is very important for introducing funds from the private sector.

In the Paris Agreement, when this market mechanism concept came about, there were actually three points
in Article 6, but for market mechanism, Article 6.2 and Article 6.4 are the relevant clauses.
promoted by Japan, is stipulated in Article 6.2.

That is the rule that has been stipulated there.

the Kyoto Protocol Clean Development Mechanism3 (CDM) is also included.
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https://unfccc.int/kyoto_protocol
https://cdm.unfccc.int/

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The JCM,In Article 6.4,

The image is the bottom figure.

Implementation of Article 6 of the Paris Agreement and the Joint
Crediting Mechanism (JCM)
Uga Maiko (Ministry of the Environment, Japan)

Japan and partner countries like Myanmar are deciding on various rules.
UN-type mechanism developing common rules.

Session 2

The other one is the more centralized

Each of the countries would follow those rules to achieve

the market mechanism.

This is in Article 6.2 of the Paris Agreement.

The part written in red is of particular importance to JCM.

As stated, international transfers and mitigation outcomes can be utilized.
on the clause.

For the actual operation, sustainable development would have to be achieved.

of CO2 is not the only benefit, but there are other benefits.
benefits.

JCM is going to be operated based
The reduction

This activity should benefit or contribute to such

“The avoidance of double counting” is also written.

Each of the countries have their own goals

in the Paris Agreement, so double counting should not be taken into account for the achievement of thesegoals.

The next is Article 6.4.

This is a more of the UN-type mechanism.

follow some rules, which are spelt out here.

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The parties to the treaty would

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In this slide, the main points from the negotiations that took place at COP25 of the developing anddeveloped countries are written.

In the developing countries, climate change is actually progressing.

Mitigation and reducing of CO2 is not the only way, but some negative impacts of climate change would haveto be adapted.

This adaptation is also something that would have to make a contribution for.

mechanism is necessary for adaptation.
for activities.
that.

A fundingIn Article 6.2, there should be some funds that should be appropriatedBefore 2020, the developed countries did not achieve their obligations and they have pursued

There were a lot of negotiations and discussions based on the fact that the advanced countries did notachieve their goals before 2020, and also there was general loss and damage.

The developing countries wanted

to also claim that they wanted the funds for these other agendas as well, whereas basically the claims made by
the developing countries are quite different from that said by the advanced or industrialized nations.

These are the main points taken from Article 6.2 and 6.4, and the negotiations regarding market mechanism.
Article 6.2 says that double counting should be avoided.

For example, if Country A reduces emissions, andCountry B buys the credit, the countries who have purchased should not count it as their own effort for
reducing emissions.

Article 6.4 says that double counting has a corresponding adjustment mechanism.

the Kyoto Mechanism is still underway.

Also,

The projects under the Kyoto Mechanism or the credit that has

already been issued, how it is going to be applied to the Paris Agreement was a main part of the negotiations
that took place.

180Implementation of Article 6 of the Paris Agreement and the Joint
Crediting Mechanism (JCM)
Uga Maiko (Ministry of the Environment, Japan)

Session 2

There are three agenda items for negotiations that are relevant to market mechanism.

Some senior and very

hard level negotiators really focused on these three topics in their negotiations.

The first one is thecorresponding adjustments under Article 6.4, wherein it does not explicitly say that double counting should beavoided, but in the goals or achieving the goals for the Paris Agreement, it is necessary to include it in Article
6.4.
This is corresponding adjustment under Article 6.4 and also the Kyoto Mechanism.

The Paris Agreement

is going to start, but what is going to happen with the mechanisms under the Kyoto Protocol?

The Kyoto

Mechanism credit still remained in large amounts and the projects still have not issued the credits in some cases.
Once we transfer into the Paris Agreement, how it is going to impact the Kyoto Protocol was the second
negotiating point.
Next is the share of proceeds (SOP) of Article 6.2.

This is not managed under the United Nations, but

we are going to introduce a mechanism to pay some kind of a proceed to the United Nations.

For the sake of time, I will leave this technical point out.

Aside from these major negotiating points, inorder to run this market mechanism in the international fora, there are a lot of things that would still have tobe discussed.

As far as Article 6, at COP, this market mechanism did not come to a final agreement.

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However, in COP244, the rule book for the Paris Agreement should have been decided, but it was not for
Paris Agreement Article 6.

When the Paris Agreement was going into full implementation, this is the one

remaining article, so there was an extension of the discussion.
of the details have been refined.

In Article 6.2 on the bilateral approach, many

Followed by what is written in red, the remaining points will be discussed infuture COPs or in the supervisory body discussions in the future.

To briefly sum up market mechanism, this is something that will be discussed in the next COP.
is already available.

The text

This is still just immediately after the COP25.

The UK is going to chair the next COP.

For the EU, Japan, and Brazil, informal meetings are also planned.

These formal and non-formal discussions

will be a mechanism or a means for formal discussions in the next COP.
New trends with JCM

https://unfccc.int/process-and-meetings/conferences/katowice-climate-change-conference-december2018/sessions-of-negotiating-bodies/cop-24
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Implementation of Article 6 of the Paris Agreement and the Joint
Crediting Mechanism (JCM)
Uga Maiko (Ministry of the Environment, Japan)

Session 2Next, I would like to talk about the JCM and what the Japanese government is trying to promote.

In thisinitiative, the Ministry of Foreign Affairs, METI, and the Ministry of the Environment are the main agencies.
Of course, forestry is within the scope.

In that area, a technical support is being provided by the Forestry

Agency.

As for the basic idea of JCM, the leading low carbon technologies, products, systems, and some othermitigation actions, such as in the forestry area, should be contributing to the sustainable development ofdeveloping countries.

Japanese government is trying to promote this.

Also, for the actual outcome, it should

be quantitatively evaluated so that Japan and partner countries should distribute among themselves in the formof credits.

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There are some Japanese policies.

The plans, global warming, the countermeasure plan, and also theinfrastructure and export strategy have been spelt out.

There are already 17 countries primarily in Asia, but also in Africa and Latin America who are partners forJapan in the JCM.

There is some documentation on the bilateral basis.

I would like to introduce some efforts in forestry.
REDD+ guideline have already been developed.

Regarding Cambodia and Laos, within the JCM,For Cambodia and Laos, the methodology is now being184

Implementation of Article 6 of the Paris Agreement and the Joint
Crediting Mechanism (JCM)
Uga Maiko (Ministry of the Environment, Japan)

developed.

Session 2

For Myanmar and Vietnam also, government-level consultation is already ongoing for theguidelines to be drafted.

The Ministry of Environment subsidized REDD+ initiatives in Laos.
project.

JICA was originally supporting theFollowing that, there was a feasibility study done by the Ministry of the Environment.

The project

has been implanted for three years and is currently being developed by the Ministry of the Environment.

I will not explain this.

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At the Ministry of the Environment, there are some projects outside of forestry.
subsidies so as to reduce the cost of these projects.

We are providing

We are providing some support in various areas.

Currently, using the JCM funds from the Ministry of the Environment, there are about 150 projects that are
being implemented in partner countries.

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Implementation of Article 6 of the Paris Agreement and the Joint
Crediting Mechanism (JCM)
Uga Maiko (Ministry of the Environment, Japan)

Session 2

Some projects are government subsidized, and monitoring is implemented.

Also, the procedure for

issuing the credits is something that the government also supports, so that the credits can actually be issued
and utilized.
Carbon offsetting and reduction scheme for international aviation (CORSIA)

Finally, I would like to introduce the aviation sector’s credit scheme.

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The International Civil Aviation Organization5 (ICAO) is promoting this initiative.
reduction goals.

They have global

The fuel efficiency would have to be improved every year by an average of 2% until 2050.

Also, the growth beyond 2020 should be carbon-neutral.

In order to achieve these goals there are somebaskets of measures, one of which is the economic measure, namely the utilization of the market mechanism.

In the aviation sector, there is the future prospect of emissions going forward.
emissions are expected to grow even further in the future.

In the aviation sector,

Using the credits, the offsetting of the increased

emissions is very important for this aviation industry.

Depending on the country, the capacity would vary, but for CORSIA, there are three phases: the Pilot
Phase, Phase 1, and Phase 2.

They will start with the countries wherever possible.

countries can be obtained from ICAO’s website.

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https://www.icao.int/Pages/default.aspx

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The list of participating

Implementation of Article 6 of the Paris Agreement and the Joint
Crediting Mechanism (JCM)
Uga Maiko (Ministry of the Environment, Japan)

Session 2

If followed in detail, we may find that in CORSIA, the credits that are available have some standards.
have to be eligible.

We apply and the eligible emissions units will be issued, so let me just talk about the ones

that are related to the forestry area.

In the CORSIA Criteria, continuity is asked for.

It would have to bethat the credits would have to be reduced, avoided, or removed for an extended period of time.
prove that, it cannot go on for a long time and you cannot be eligible.
evaluate the leakage.
achieved.

We

If you cannot

Also, there would have to be a way toIf there is no program, but if there is a leakage, then the reduction has not actually been

The program would have to have a stop-gap measure to mitigate and evaluate a leakage.

it meets the criteria or not is determined by the Technical Advisory Body6(TAB).

WhetherThis body would evaluate

the programs, and ultimately, the ICAO governing body would approve.

In July, there was the first application round.
programs.

There were 14 programs, including some forestry sector

For the March executive board meeting this year, TAB is now evaluating the eligibility.

of you, there was already an explanation about JCM.
applied or you may be interested.

JCM is not included here, so I do not know if you have

In the government, there is a lot of active discussion.

JCM is bilateral

activity, but there are a lot of forward-looking discussions going on in the government right now.

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https://www.icao.int/environmental-protection/CORSIA/Pages/TAB.aspx

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For manySession 2

I am over time and there are still some parts that I could not explain as much as I wanted, but these are
the websites that you may refer to.

Especially, Carbon Markets Express7, there is information both in Japaneseand English, so it will be useful for you.

Waseda University8 was the lead for this Laos project on JCM, so

there is detailed information about this project on the Waseda University site as well.

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https://www.carbon-markets.go.jp/eng/
https://www.waseda.jp/top/en/

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Please take a look.