Joint Implementation (JI), Clean Development Mechanism (CDM), and Carbon Trading:
| Parameter | JI | CDM | Carbon Trading |
|---|
| Objective | To help Annex I countries meet their emissions reduction targets by investing in emission reduction projects in other Annex I countries | To help Annex I and non-Annex I countries meet their emissions reduction targets by investing in emission reduction projects in non-Annex I countries | To create a market for buying and selling carbon credits to achieve emissions reductions |
| Applicability | Between Annex I countries only | Between Annex I and non-Annex I countries | Between any two entities, including companies and countries |
| Project Type | Emission reduction or removal projects in the energy sector and industry | Emission reduction or removal projects in any sector | N/A |
| Additionality | Projects must result in emission reductions beyond what would have happened without the project | Projects must be additional to any that would have happened anyway | N/A |
| Crediting Period | Maximum of five years with possibility of renewal | Maximum of 10 years with no possibility of renewal | N/A |
| Regulatory Oversight | JI Supervisory Committee | CDM Executive Board | No specific regulatory body |
| Trading Units | Emission Reduction Units (ERUs) | Certified Emission Reductions (CERs) | Carbon Credits |
| Trading Mechanism | ERUs can be transferred between Annex I countries through bilateral agreements | CERs can be traded on the global carbon market | Carbon credits can be traded on the global carbon market |
In summary, JI and CDM are mechanisms designed to facilitate emissions reductions through investment in specific projects, while carbon trading creates a market for buying and selling carbon credits to achieve emissions reductions. JI is applicable only between Annex I countries, while CDM is applicable between Annex I and non-Annex I countries. Both JI and CDM require additionality and have a maximum crediting period. They also have specific regulatory oversight bodies, the JI Supervisory Committee and CDM Executive Board, respectively. On the other hand, carbon trading does not have a specific regulatory body and allows for the trading of carbon credits on a global market. The trading units also differ, with JI using ERUs and CDM using CERs, while carbon trading uses carbon credits.
