How the Joint Crediting Mechanism Can Contribute to NDCs Implementation and SDG Achievement
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Article 6 of the Paris Agreement on cooperative approaches offers opportunities for Parties to voluntarily cooperate to promote NDC implementation, sustainable development and environmental integrity.

The Joint Crediting Mechanism, implemented under bilateral cooperation between Japan and partner countries, defines its objective as to promote diffusion of leading low- or zero-carbon technologies, to implement mitigation actions and to contribute to sustainable development.

Currently, the JCM is established with 17 countries, and helps promote climate action and SDG implementation.

Linkages and synergies between climate actions under the Paris Agreement on climate change and the SDGs set by the 2030 Agenda for Sustainable Development are widely recognized. However, to leverage the synergies and to balance climate and development targets set by the two agendas remains a challenge.

SDG 13 (climate action) is directly linked to Paris Agreement implementation. Other SDGs can also be linked to climate change mitigation and adaptation actions since impacts caused by climate change have the potential to interfere with progress on these Goals. For example, increased risks of droughts and floods threaten the availability and sustainable management of water and sanitation (SDG 6). Meanwhile, the Paris Agreement aims at strengthening the global response to the threat of climate change in the context of sustainable development and efforts to eradicate poverty (SDG 1). Climate actions described in countries’ Nationally Determined Contributions (NDCs) are aligned directly or indirectly with various SDG targets, and these linkages have the potential to generate one-way or mutual implementation benefits.

Article 6 of the Paris Agreement on cooperative approaches offers opportunities for Parties to voluntarily cooperate to promote NDC implementation, sustainable development and environmental integrity. The Joint Crediting Mechanism (JCM), implemented under bilateral cooperation between Japan and partner countries, defines its objective as to promote diffusion of leading low- or zero-carbon technologies, to implement mitigation actions and to contribute to sustainable development. Currently, the JCM is established with 17 countries: Mongolia, Bangladesh, Ethiopia, Kenya, Maldives, Viet Nam, the Lao People’s Democratic Republic (PDR), Indonesia, Costa Rica, Palau, Cambodia, Mexico, Saudi Arabia, Chile, Myanmar, Thailand and the Philippines.

With regard to climate change mitigation, approximately 150 JCM Model Projects in the 17 partner countries have been implemented or are planned to be implemented, and it is estimated that these projects will result in up to 12 million tons of carbon dioxide (tCO2) emissions reduction by 2030. The Government of Japan expects 50 million to 100 million tCO2 in accumulated emissions reduction/removal by 2030 to be undertaken within the government’s budget. Issued JCM credits will be allocated to Japan and partner countries to contribute to the emission reduction targets in their respective NDCs.

Certain JCM projects have also delivered spontaneous co-benefits for sustainable development in project host countries. For example, in Indonesia, it is reported that workforce increased due to the rise in productivity as a result of the utilization of the high efficient refrigerator, and the installation of waste heat power generation in a cement facility enabled a reduction of dust from the cement manufacturing process, which improved working conditions and workers’ health.

In order to effectively implement the climate and sustainable development global agendas at national level, integration of climate policies and national development plans is underway in many countries. For example, as one of the JCM partner countries, Mongolia is promoting a synergistic approach to climate change issues and development challenges through the formulation of relevant policies such as the ‘National Green Development Policy: NGDP’ (2014), ‘Sustainable Development Vision 2030: Vision 2030’ (2016) and ‘Sustainable Development Outlook of Mongolia: SOM’ (2018).

Taking energy policies as an example, Mongolia’s NDC sets a target to increase renewable electricity capacity from 7.62% in 2014 to 20% by 2020 and to 30% by 2030 as a share of the country’s electricity generation capacity. This target is directly linked to one of the strategic objectives of the NGDP, and is in line with Vision 2030. The SOM, an analytical framework to facilitate achievement of the SDGs, reveals a direct link between Mongolia’s energy policies and SDG 7 (affordable and clean energy), as well as and linkages to SDGs 3 (good health and well-being), 11 (sustainable cities and communities) and 13.

Since the beginning of JCM cooperation between Mongolia and Japan in 2013, a number of solar power generation projects have been implemented, contributing to Mongolia’s renewable energy target. Aggregated electricity generation capacity of facilities introduced by the JCM so far is 76 megawatt (MW), which accounts for more than half of the country’s NDC target to increase solar power generation capacity to 145 MW.

Such renewable energy projects contribute to climate change mitigation and SDG 7, and may have potential to create other co-benefits such as reducing air pollution caused by coal power plants (SDG 3).

Furthermore, frameworks to ensure and evaluate contributions to sustainable development achieved by JCM projects are applied in Mongolia and Indonesia. Project participants are required to prepare a plan for contributing to sustainable development at the project registration phase and to report on achievement of such contribution during the monitoring period upon credit issuance. In Mongolia, for example, a checklist of 22 items in four sectors (social environment and community participation, economy, technology, and environment) and 17 SDGs is used to prevent negative impacts and evaluate positive contributions. These frameworks also enable countries to identify JCM collective achievement and potential in terms of sustainable development. Project participants can also benefit from the frameworks to address social and environmental risks of projects.

In order to effectively develop JCM projects corresponding to climate and national development needs of partner countries, Japan’s Ministry of the Environment (MOEJ) and the Overseas Environmental Cooperation Center (OECC) are looking into existing and potential synergies between priority sectors and technologies described in partner countries’ NDCs and JCM projects. Impactful projects can be strategically replicated within the country and in other countries, with a focus on specific sectors and technologies. It is also essential to closely collaborate with stakeholders, including partner countries, local governments and the private sector, to create enabling environments for project formulation such as though the improvement of institutional arrangements. The scale-up of the JCM and its expansion are now underway to promote decarbonization and increase positive impacts for the environment, economy and society.

The MOEJ and OECC, together with Mongolia’s Ministry of Environment and Tourism, will organize a side event at the 25th session of the Conference of the Parties (COP 25) to the UNFCCC in Santiago, Chile, to share and discuss the latest progress of the JCM highlighting co-benefits for sustainable development.

Please follow ‘Carbon Market Express’ (Website/Facebook page) to find more information on the JCM.

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This article was written by Jun Watanabe, Researcher, Overseas Environmental Cooperation Center (OECC), Japan.


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