Page 38 - Carbon Frauds and Corruption

Corruption of Bribery

Chapter 6 : Corruption in the “Carbon World”

called “the biggest bung in history”. The stick was that if it did not ratify the European Union
would object to Russia’s entry into the World Trade Organisation. Ratification was formally
th
announced on 16 February 2005 and it was all systems go.
5.2.2 Basic and Flexible Mechanisms
Signatories to the Kyoto Protocol were required to:

 Establish a Designated National Authority that would act as the link to the UNFCC and
control greenhouse gas inventories, targets and annual reconciliations
 Maintain accurate greenhouse gas inventories
 Register Large Carbon Producers (LCPs: such as power stations, cement works, oil
installations and iron and steel factories) and monitor their emissions against allowances
(Assigned Amount Units or AAUs)
 Create a National Register in which AAUs, transfers and cancellations would be recorded

In addition, Kyoto established five “flexible mechanisms” which in simple terms are offset
projects the most important of which are the:

 Clean Development Mechanism (CDM) that established offset projects in less developed
countries resulting in carbon credits called Certified Emission Reductions (CERS)
 Joint Investments (JI) are offset projects in other Annexe 1 countries resulting in carbon
credits called Emission Reduction Units (ERAs)

CDM and JI projects (see page xx) can generate credits relating to land use, land use change and
forestry (LULUCF). All of the credits can be used – subject to a limit of 6% ‐ by countries and LCPs
to meet their reduction targets.
5.3 The European Emissions Trading System
th
The ETS directive (2003/87/EEC) entered into force on 25 October 2003 in three phases from
2005 to 2007, 2008 to 2012 (matching the “Kyoto period”) and 2013 to 2020. All 27 member states
agreed the share the burden (“the Burden Sharing Agreement”) of emissions reduction. The ETS
involves around 12,000 LCPs in what is termed the “Traded Sector” or “Compliance Sector”.

5.4 Compilation of Greenhouse Gas Inventories
36
After ratification, every country was required to prepare a greenhouse gas “inventory ” on a
38
37
1990 calculated baseline by combining activity data for example fuel use with emission factors .
Some baseline calculations ‐ such as methane from landfills ‐ were derived from more
complicated conversions. Every LCP was assigned units (AAUs).

36 On a 1990 baseline
37 Primarily fuel consumption
38 Which is the amount of CO2 emitted per unit of input advised by the IPCC

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