On May 2, 2008, the Enforcement
Branch of the Kyoto Protocol's Compliance Committee
decided to proceed with an investigation of Canada's
failure to establish in a timely way a national registry for
Kyoto-recognized emissions credits, a condition for
Canada's participation in the flexibility mechanisms of
the Protocol (i.e., the Clean Development Mechanism, Joint
Implementation and the ability to trade national emissions
allowances). National registries are required of all Annex 1
country signatories to the Protocol and are linked to an
international database (the International Transaction Log) that
is used to monitor each country's holdings and
transfers of Kyoto-recognized emissions credits.
This decision follows the Compliance Committee's Report,
released April 11, 2008, which outlined the findings of a
review conducted in Ottawa in November 2007 by a team of
international experts from the UN Framework Convention on
Climate Change secretariat. The team reviewed Canada's
Initial Report Under the Kyoto Protocol
(the Initial Report) and supporting information, which
described, among other things, how Canada has implemented its
requirements to develop a national system to account for its
greenhouse gas (GHG) emissions.
Although the Committee's
Report indicated that Canada had not yet established a national
registry, it also noted that the Canadian government had
awarded the contract to do so to Perrin Quarles Associates, the
firm that established New Zealand's national registry,
and that is working on a registry for the Regional Greenhouse
Gas Initiative, the cooperative effort led by northeastern and
mid-Atlantic U.S. states to reduce regional GHG emissions
through an emissions trading regime. According to the
Committee's Report, Canada's registry is
expected to be connected to the International Transaction Log
by May 28, 2008, enabling live updates to the country's
inventory of credits by the second week of July 2008.
The Enforcement Branch's
investigation is a timely reminder that there are enforcement
mechanisms under the Kyoto Protocol. It also indicates that the
Enforcement Branch will, in the right circumstances, take
action to deal with non-compliance. As a further signal of this
intention, on April 17, 2008, the Enforcement Board issued a final decision declaring Greece to be out
of compliance with the requirements of the Protocol to ensure
its national system for GHG emissions accounting is properly
maintained. As a result, Greece must now prepare a plan to
return to compliance, and its right to trade in most
Kyoto-recognized emissions credits has been (at least
Canada's recent action
to establish a national registry is evidence that the federal
government remains committed to complying with at least some of
the country's obligations under the Protocol. The
government has also indicated a clear commitment to reducing
the country's GHG emissions over the long term. It is,
however, equally clear that the current government believes it
would be irresponsible to attempt to comply with the
country's obligation under the Protocol to reduce its
GHG emissions by 6% below 1990 levels between 2008 and 2012.
That issue will crystallize at the end of the
Protocol's compliance period in 2012 when Annex I
Parties (including Canada) will have 100 days after an
international expert review of their final annual emissions
inventory to achieve compliance with their commitments (e.g.,
by acquiring Kyoto-recognized emissions credits). If at the end
of this 100 day period, a party's emissions are still
greater than its commitment under the Protocol, the Enforcement
Branch may declare the party to be in non-compliance, prevent
it from making transfers under the Protocol's emissions
trading schemes and require it to make up the difference
between its actual emissions and its Kyoto commitment, plus an
additional 30% of that amount, during a second commitment
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