Activities implemented jointly: another look at the facts

The first Conference of the Parties to the United Nations Framework Convent ion on Climate Change in Berlin established a pilot phase of so-called Acti vities Implemented Jointly (AIJ). This pilot phase started in 1995 and was to end in 1999. It was prolonged at the fourth Conference of the Parties in Buenos Aires (1998) for a yet undetermined period after 2000. This paper i s an empirical study of AIJ experience in the first five years (1995-1999) based on 96 AIJ from the UNFCCC's web site as of April 30, 1999, and a sepa rate study on seven AIJ projects of Japan. The main results of this study a re: (1) AIJ investment shows a pattern of regional-specificity with rather divergent regional investment portfolios in the United States, Japan and Eu rope. This, pattern can be traced back to differences in the national AIJ p rograms of investors and hosts, on the one hand, and to specific ways of mi nimizing transaction cost on the other, e.g. by attaching AIJ to establishe d institutional links of development co-operation or by 'trading in the nei ghbourhood'; and (2) AIJs are overwhelmingly no regret-measures with almost zero or negative cost. Transaction costs of reporting have been minimized by applying simple and straightforward methods of baseline determination. T he exception to this is the verification procedure where expensive external verification prevails. (C) 2000 Elsevier Science B.V. All rights reserved.