1. The developed/developing division does not depict two mutually exclusive viewpoints. Rather, it provides a convenient bisection from which to analyse the debate. The terms ‘developed’ and ‘developing’ are used predominantly throughout this chapter. Northern/Southern (or north/south), first world/third world and industrialised/emerging are also common terms used in the literature to describe the development ‘status’ of countries.
2. A.A. Niederberger, AIJ: Review of Issues for the Pilot Phase, Swiss Federal Office of Environment, Switzerland (1996), at 10.
3. Market-based instruments alter the quantities or prices of goods or services through the use of property allocations, taxes or subsidies, instead of relying on centralised mandates of specific technologies or production processes, as do traditional command and control regulatory policies. See T.C. Heller, Environmental Realpolitik: JI and Climate Change, 3(2) Indiana J. Legal Studies, (1996), at 295–340. R. Hahn & R. Stavins, Economic Incentives for Environmental Protection, 82 Am. ECON. Rev. (1992), at 464–468; T. Tietenberg, Economic Instruments for Environmental Regulation, 6(1) Oxford Rev. Econ. Pol’y (1990), at 17–33; J.B. Opshoor & H.B. Vos, Economic Instruments for Environmental Protection, OECD (1989).
4. Three or more countries can work together on a JI project, however, this will most likely increase economic, political and legal complications. Projects normally involve two parties. Nevertheless, technical, financial or geographical circumstances may require a multi-party project.
5. Given its ‘trade characteristics,’ JI has been promoted as a step toward establishing an international tradeable permit system. “[JI] initiatives could help build confidence in future emission trading.” See S. Upton, (Minister for the Environment, New Zealand), Climate Change: The Perplexing Environmental Issue for NZ, The Southland Times, 3 March 1997. Thus, some discussions of JI are entrenched in a wider discussion of international trading. See R. Sapsford, Joint Initiatives and Action: Issues and Opportunities for NZ. Contract report to the Ministry for the Environment (1997); K. Hanslow, et al., Climate Change — Trade and Welfare Effects, 1(3) Australian Commodities (1994), at 344–354. Much of the technical, institutional and financial expertise needed for JI is also needed to construct a trading system. If maximum efficiency gains were extracted from JI, the marginal cost of abatement would be equalised between industrialised and developing countries — a theoretically identical result to that achieved by an international trading regime (with full global participation). JI is also referred to as a “project” system since emission reductions occur on a project by project basis. Additionally, because JI projects are voluntary, JI has characteristics of a Voluntary Agreement.