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U.S. Delegation to the Fifth Session of the Conference of the Parties to the U.N. Framework Convention on Climate Change (COP-5) U.S. Statement on Activities Implemented Jointly Joint Meeting of the Subsidiary Body for Scientific and Technological Advice and the Subsidiary Body for Implementation, Session 11 Bonn, Germany, October 26, 1999

Thank you, Mr. Chairman,

My delegation would like to join others in expressing our appreciation to the Secretariat for its valuable work in preparing FCCC/SB/1999/5 and its addendum on issues related to the Activities Implemented Jointly (AIJ) pilot phase. These documents reflect the Secretariat's skill in taking broad guidance from the Parties, in this case a list of issues to be addressed by a comprehensive review of the AIJ pilot phase, and transforming it into a useful analysis to inform our deliberations. In addition, the Third AIJ Synthesis Report presents a snapshot of burgeoning AIJ activities worldwide. We were encouraged by the 30 percent jump in the total number of projects reported and in the broadening of geographic diversity, including the addition of eight new host country Parties. We very much hope that this trend continues.

The SBSTA and SBI agreed, at the tenth session, that the review of the AIJ pilot phase would include an assessment of the Uniform Reporting Format (URF) and recommendations from Parties for its improvement. Taking the views of Parties into consideration, the Secretariat has done a commendable job in preparing a revised draft of the URF. There are, nevertheless, a number of areas that still require further discussion before the URF can be finalized. These include consideration of how much information is needed to determine that the project is compatible with national development, socio-economic and environment priorities; how much detailed cost and financing information is necessary; and, the treatment of confidential business information. We propose that in addition to any working group on AIJ, the Secretariat convene a technical meeting at these sessions to solicit further comments on the URF. We are also prepared to provide more detailed comments in writing to the Secretariat.

The Secretariat's treatment of the issues to be addressed in a comprehensive review indicates that a significant amount of analysis and a great deal of information on various aspects of the AIJ pilot phase already exist. Although at times brief in its consideration of the review elements, FCCC/SB/1999/5 does encapsulate Parties' views and the current status of methodological work. For example, under item B, "Contribution of projects to capacity-building" the document notes that with the sharp recent increase in AIJ projects, more host countries have the opportunity to "learn-by-doing." This increase in projects and capacity exposes more Parties to the challenges of designing baselines and identifying additionality, to the operation and management of projects, and to establishing institutional arrangements to attract investment. Although certainly not exhaustive, the Secretariat's document points us in the right direction. Mr. Chairman, my delegation believes that we are well positioned at this session to conduct the comprehensive review called for in Decision 5/CP.1.

Another critical task for Parties contained in Decision 5/CP.1 is to take a conclusive decision on the AIJ pilot phase "no later than the end of the present decade." My delegation believes that this meeting presents an ideal opportunity to meet the deadline that we agreed to four years ago. A "conclusive" decision, however, does not necessarily mean that we must "conclude" the pilot phase. In fact, the growth in both the number and geographic diversity of projects speaks strongly for letting the momentum continue.

We may want to ask ourselves what has prompted this surge? Certainly, one can look at the emphasis on capacity-building in host countries, but more importantly, one can surmise that the advent of the Clean Development Mechanism (CDM) and Article 6 Joint Implementation may also have had much to do with the increased interest. It would appear that both Annex B Parties and private entities are looking to prepare themselves for the regime under the Kyoto Protocol once it has entered into force. It is logical that they would find an outlet for their desire to gain experience with project-based crediting through the AIJ pilot phase.

Another incentive is the prospect that AIJ projects will be eligible for consideration under the CDM and JI. It appears that the development of new AIJ projects may also have been prompted by a belief that these projects will generate credits that will have value in the marketplace. A number of Parties have proposed such a "bridge" between the old and the new in their submissions which have been included in the synthesis of proposals on the mechanisms. We would like to join others in calling for a conclusive decision on the AIJ pilot phase that makes this "bridge" more concrete.

In this way, all Parties may continue to "learn-by-doing," and project developers and investors can receive some assurance that their efforts to address climate change through specific projects will not go unrewarded. A clear signal from the Parties at this meeting will achieve this important goal.

Mr. Chairman, we look forward to working with other Parties at this session to build a sturdy bridge between AIJ and the two project-based Kyoto mechanisms - CDM and JI - so that we may continue to encourage investment in innovative activities that promote environmental protection and enable Parties to gain valuable experience in mitigating climate change one project at a time.

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