Joint Crediting Mechanism under the Paris Agreement and Its Implication to the Climate Policy in Korea

Before the Conference of Parties (COP) 21 of the United Nations Framework Convention on Climate Change (UNFCCC) in 2015, most parties of UNFCCC had submitted their intended nationally determined contributions (INDCs) and to achieve their voluntary targets, some parties consider using international market mechanisms. As one of such mechanisms, Japan promoted its own bilateral mechanism called Joint Crediting Mechanism (JCM). In this study, feasibility studies and projects under JCM have been analyzed by project type, sector, country and region, which could provide some implications in designing Korea's future climate policy to achieve Korea's targets of 11.7% using international market mechanism in INDC. Since 2010, JCM has promoted 542 projects and feasibility studies in 44 countries according to the Institute for Global Environmental Strategies (IGES) database. Among 542 projects, about 80% were feasibility studies implying that JCM was more focused on project identification. However, current trends of JCM show that more projects will be soon implemented based on these feasibility studies. For sectoral categorization, projects were categorized into seven sectors-energy technology, energy efficiency, renewable energy, waste management, city, strategic planning and projects related to the country's efforts to reduce emissions from deforestation and forest degradation (REDD+). JCM projects were mitigation focused with more than 70% of projects were related to energy efficiency, renewable energy and energy technology. At the regional and country level, JCM is highly focused on Asia and especially, more than 100 projects were developed in Indonesia. Based on the analysis of JCM, in order to develop bilateral international mechanism for Korea, it is worthwhile to emphasize that Korea considers Asian countries as her partner. In addition, Korea may consider the collaboration with Multilateral Development Banks (MDBs) to implement projects identified by Korea and Asian partner countries. Furthermore, strategically, it is recommendable to develop jointly with Japan who has already capacity and networks with other Asian countries to mitigate GHG emissions. Such financial resources from MDBs and Japan may contribute to meet the 11.3% of GHG reduction target from abroad according to INDC of Korea.