These credits can be used by the investing country to set against its target for emission reductions. Projects will be administered by the Parties involved under international guidelines. For example, a UK company might seek to build a gas power station in an East European country to replace an old coal station. The scheme must not simply be replacing a defunct coal station that is reaching the end of its life, nor can it be counted if a gas station is being put into an area which does not use coal as a source of energy. Each project would have an agreed baseline against which credits are calculated.
Sinks increase the earth's ability to absorb carbon from the atmosphere.
Forestry projects are the best-known example. The main type of sink activities eligible under the Protocol are those that have led to a net increase in forested area since 1990. As with reducing actual emissions, such removals by sinks must be additional to what would otherwise occur. You may wish to look at the case studies of projects being carried out during the pilot phase of Activities Implemented Jointly. Some further information on JI can be found on other websites, such as Joint Implementation Online and the Netherlands Joint Implementation Network.