The German Law on Project-Based Mechanisms – Potentials, Chances and Problems for Companies Participating in Emissions Trading
The newly introduced law on project-based mechanisms (ProMechG), which entered into force 30 September 2005, was the topic of the Climate Talk on 12 December 2005. At the event the new cooperation partner for the Climate Talk, the German Institute for Economic Research (DIW Berlin), was introduced. At DIW's offices in Berlin-Dahlem, the participants vividly discussed the ProMechG and its implications for businesses.
The ProMechG establishes the legal basis for permitting “Joint Implementation (JI) Projects” and “Clean Development Mechanism (CDM) Projects”. For reductions of greenhouse gas (GHG) emissions in foreign countries that are achieved through such projects, German firms will receive tradable emission allowances that they can use within the framework of the EU emissions trading system.
Presentations were given by Julia Rüsch (Ecologic), Thomas Forth (Free Lancer at Wuppertal Institute) and Joachim Schnurr (GFA Envest). Mrs. Rüsch and Mr. Forth both directly supported the Federal Ministry for the Environment in drafting the ProMechG, whereas Mr. Schnurr is affected by the law as project developer.
The ensuing discussion focused on the economic potential and risks connected with JI- and CDM-projects, opportunities to improve the legal framework and the question whether the new law created incentives to conduct these projects in Germany rather than in other European countries. The cost and duration of project approvals, as well as additional approval criteria, were discussed.
The animated discussion was eventually moved to a nearby location, where the evening drew to a relaxed close.