The flexibility mechanisms included in the Kyoto Protocol are key provisions for achieving the environmental benefits of the treaty in a cost-effective manner. They are essential for business and industry to make progress in reducing greenhouse gas emissions. It is important that the Parties work to establish the programmatic details of these mechanisms and to build upon the flexibility provisions agreed to in Kyoto.

The International Climate Change Partnership (ICCP), a coalition of companies and industries around the world committed to responsible participation in the climate change policy process, supports the following principles with regard to the Kyoto Protocol flexible mechanisms.

Supplementarity -- There should be no further elaboration of the supplementarity requirements contained in the Kyoto Protocol.

Fungibility -- Credits from the 3 different mechanisms should be fully fungible and eligible for multiple transactions. Their origins should remain preserved in their original respective registry listings.

Additionality -- Only environmental additionality should be considered, as specified by the Kyoto Protocol.

Share of Proceeds -- A share of the proceeds should only be set aside from CDM projects, as specified by the Kyoto Protocol. The surrender of a high proportion of the proceeds will act as a deterrent to industry's participation in the CDM process.

Public Involvement -- General policy decisions (as opposed to specific project decisions) at the COP/MOP and Executive Committee levels should include full disclosure and the opportunity for public involvement. Project-level decision making should be subject to host-country public review and disclosure regulations.

Equity -- Equity considerations are not specified in the Kyoto Protocol and should not be part of project evaluation.

Project Limitations -- Arbitrary limitations on the types of projects that can be undertaken under CDM should not be included. The Kyoto Protocol clearly allows for carbon sequestration projects.

Entity Participation -- Private "legal entities" must be assured the opportunity to participate in the holding and transfer of ERUs, CERs, and AAUs with the consent of the directly-involved Parties.

The International Climate Change Partnership (ICCP), organized in 1991, is a global coalition of companies and trade associations from diverse industries committed to constructive and responsible participation in the international policy process concerning global climate change. The ICCP recognizes that the continued growth in emissions of greenhouse gases is an important concern for all nations and that efforts are underway internationally and in national governments to develop policies that address this concern. ICCP also understands the importance of working within the process to achieve important environmental objectives while fostering continued economic development and improvement in living conditions for all.

September 2000

For more information, please contact: ICCP, 2111 Wilson Blvd., 8^th Floor; Arlington, VA 22201; Telephone: 703-841-0626; Fax: 703-243-2874; E-mail: iccp@alcalde-fay.com