1. Is the concept of “supplementarity” defined within the international climate regime?

2. Is the issue of supplementarity/trading as supplemental mentioned in any CMP decisions?

3. Is the issue mentioned in any COP decisions other than 15/CP.7?

1. Definition of “Supplementarity”

1.1 Our research has not uncovered a definition for the term “supplementarity”. It would seem that the concept has been left ambiguous as a result of the divide between those parties who want to have a definitive (i.e. quantitative) limit, and those parties who want the decision as to what is “a significant element” of a country’s domestic effort to be left to the country to decide.

1.2 In Bali in December 2007, the Subsidiary Body for Implementation (SBI) provided a compilation and synthesis of supplementary information provided by parties in accordance with Article 7.2 of the Kyoto Protocol , which included comments about the information provided by parties to meet the “supplementarity” component of the information requirement. The SBI’s comments illustrate that the concept of supplementarity has not been defined or qualified. In particular the SBI noted that:
“The Parties approach the principle of supplementarity in two different ways. The first one is based on the difference between projected emissions in 2010 (representing the average emission levels for the first commitment period) and emission levels according to their Kyoto Protocol targets. The second is based on the difference between the base year emission and the Kyoto Protocol target. In both cases, Parties considered how this difference…is expected to be covered by domestic measures, acquisition of Kyoto units and credits from LULUCF activities.”

1.3 Additional information found during research: “… the EU came to The Hague arguing for strong domestic action, which for them meant a 50 per cent cap on the Kyoto mechanisms. The Umbrella Group, on the other hand, argued for no quantitative cap for the sake of economic efficiency. Together with sinks this proved to be the breaking point between EU-US talks.” We note that in addition to Parties who have raised the issue of supplementarity, CAN International raised the issue of supplementarity in the context of emissions trading in its submission regarding the second review of the Kyoto Protocol under Article 9. CAN International suggested that the Article 9 review explore the “implications of the quantification of the supplementarity provision” because in CAN International’s view the Protocol “does not necessarily provide assurance that emissions trading involves credits that are “supplemental to domestic actions” as required by Article 17”.

2. We will respond to questions 2 and 3 (“Supplementarity” in CMP and COP decisions) together:

2.1 Under the Kyoto Protocol the use of flexible mechanisms as a means of enabling Annex 1 countries to meet their emission limitation and reduction commitments is constrained by the concept of “supplementarity”. The concept is enshrined in Articles 6, 12 and 17 as follows: (a) Article 6.1 (d) – The acquisition of emission reduction units shall be supplemental to domestic actions for the purposes of meeting commitments under Article 3; (b) Article 12.3 (b) – Parties included in Annex I may use the certified emission reductions accruing from such project activities to contribute to compliance with part of their quantified emission limitation and reduction commitments under Article 3, as determined by the Conference of the Parties serving as the meeting of the Parties to this Protocol; and (c) Article 17 – The Conference of the Parties shall define the relevant principles, modalities, rules and guidelines, in particular for verification, reporting and accountability for emissions trading. The Parties included in Annex B may participate in emissions trading for the purposes of fulfilling their commitments under Article 3. Any such trading shall be supplemental to domestic actions for the purpose of meeting quantified emission limitation and commitments under that Article.

2.2 The following is a chronology of COP and CMP decisions or documents which include a reference to the issue of supplementarity:

• Decision 5/CP.6 (Bonn, 2001) in which the COP decided to adopt the agreements contained in the annex to the decision as “core elements for the implementation of the Buenos Aires Plan of Action”. In paragraph 5 of section VI of the Annex, “Mechanisms pursuant to Articles 6, 12, and 17 of the Kyoto Protocol”, the COP agreed that:
  “…the use of the mechanisms shall be supplemental to domestic action, and that domestic action shall thus constitute a significant element of the effort made by each Party included in Annex I to meet its quantified emission limitation and reduction commitments under Article 3, paragraph 1.”
• Decision 15/CP.7 (Marrakech, 2001) in which the COP affirmed that the use of the flexible mechanisms must be supplemental to domestic action and that “domestic action shall thus constitute a significant element of the effort made by each Party included in Annex I to meet its quantified emission limitation and reduction commitments under Article 3, paragraph 1”. Decision 15/CP.7 also annexed a draft decision which the COP recommended that the Parties to the Kyoto Protocol adopt at their first session. Paragraph 1 of the draft decision included the text which was adopted by the CMP in Decision 2/CMP.1.
• Decision 2/CMP.1 (Montreal, 2005) in which the CMP decided that:
  “the use of the mechanisms shall be supplemental to domestic action and that domestic action shall thus constitute a significant element of the effort made by each Party included in Annex I to meet its quantified emission limitation and reduction commitments under Article 3, paragraph 1.”
• Decision 15/CMP.1 (Montreal, 2005) in which the CMP adopted the guidelines for the preparation of information under Article 7 of the Kyoto Protocol. The guidelines included in Chapter II, Section F at paragraph 33:
  “Each Party included in Annex I shall provide information on how its use of the mechanisms is supplemental to domestic action, and how its domestic action thus constitutes a significant element of the effort made to meet its quantified limitation and reduction commitments under Article 3, paragraph 1, in accordance with the provision of decision 5/CP.6.”

2.3 We have not been able to find any decision in relation supplementarity after Decision 15/CMP.1. Our finding appears to be consistent with the information in Table 2 of the Secretariat’s “Message to Parties to the Kyoto Protocol” dated 2 November 2009 which lists only Decision 15/CMP.1 and Decision 2/CMP.1 as supporting references for the supplementarity “reporting element”.