Annex I Countries
Annex I of the FCCC lists the countries who were members of the OECD in 1992,
11
countries undergoing the process of transition to a market economy, and the
European
Economic Community. Annex I parties are committed to adopt national policies
and take
measures to mitigate climate change.
Capital Costs
Costs associated with the capital or investment expenditures on land, plant,
equipment,
and inventories. Unlike labor and operating costs, capital costs are
independent of the
level of output.
Commercialization
Sequence of actions necessary to achieve market entry and general market
competitiveness
of new innovative technologies, processes, and products.
Cost-Effective
A criterion that specifies that a technology or measure deliver a good or
service at equal or
lower cost than current practice. In this paper, environmental externalities
are not
internalized; payback periods vary, depending on the particular sector and
market.
Economic Potential
The portion of the technical potential for GHG emissions reductions or energy-
efficiency
improvements that could be achieved cost-effectively in the absence of market
barriers.
The achievement of the economic potential requires additional policies and
measures to
break down market barriers.
Emission Permit
A non-transferable or tradable allocation of entitlements by a government to
an individual
firm to emit a specified amount of a substance.
Emission Quota
The portion or share of total allowable emissions assigned to a country or
group of
countries within a framework of maximum total emissions and mandatory
allocations of
resources or assessments.
Emission Standard
A level of emission that under law may not be exceeded.
Energy Intensity
Ratio of energy consumption and economic or physical output. At the national
level,
energy intensity is the ratio of total domestic primary energy consumption or
final energy
consumption to gross domestic product or physical output.
Externalities
By-products of activities that affect the well-being of people or damage the
environment,
where those impacts are not reflected in market prices. The costs (or
benefits) associated
with externalities do not enter standard cost accounting schemes.
Final Energy
Energy supplied that is available to the consumer to be converted into useful
energy (e.g.,
electricity at the wall outlet).
Full-Cost Pricing
The pricing of commercial goodsÑsuch as electric powerÑthat would include in
the final
prices faced by the end user not only the private costs of inputs, but also
the costs of the
externalities created by their production and use.
GHG Reduction Potential
Possible reductions in emissions of greenhouse gases (quantified in terms of
absolute
reductions or in percentages of baseline emissions) that can be achieved
through the use of
technologies and measures.
Information and Education Measures
Actions that provide information, training, or encouragement, or help to
develop
understanding. Such measures may provide information about the availability,
performance, and other characteristics of technologies, practices, and
measures.
Marginal Cost Pricing
The pricing of commercial goods and services such that the price equals the
additional
cost that arises from the expansion of production by one additional unit.
Market Barriers
Conditions that prevent or impede the diffusion of cost-effective technologies
or practices
that could mitigate GHG emissions.
Market-Based Incentives
Measures intended to directly change relative prices of energy services and
overcome
market barriers.
Market Penetration
The share of a given market that is provided by a particular good or service
at a given
time.
Market Potential (or Currently Realizable Potential)
The portion of the economic potential for GHG emissions reductions or energy-
efficiency
improvements that could be achieved under existing market conditions, assuming
no new
policies and measures.
Measures
Actions that can be taken by a government or a group of governments, often in
conjunction with the private sector, to accelerate the use of technologies or
other practices
that reduce GHG emissions.
No Regrets
Measures whose benefitsÑsuch as improved performance or reduced emissions of
local/regional pollutants, but excluding the benefits of climate change
mitigationÑequal
or exceed their costs. They are sometimes known as Òmeasures worth doing
anyway.Ó
Opportunity Cost
The cost of an economic activity foregone by the choice of another activity.
Policies
Procedures developed and implemented by government(s) regarding the goal of
mitigating climate change through the use of technologies and measures.
Primary Energy
Energy embodied in natural resources (e.g., coal, crude oil, sunlight,
uranium) that has not
undergone any anthropogenic conversion or transformation.
Project Costs
All financial costs of a project such as capital, labor, and operating costs.
Regulatory Measures
Rules or codes enacted by governments that mandate product specifications or
process
performance characteristics.
Research, Development, and Demonstration
Scientific/technical research and development of new production processes or
products,
coupled with analysis and measures that provide information to potential users
regarding
the application of the new product or process; demonstration tests the
feasibility of
applying these products or processes via pilot plants and other pre-commercial
applications.
Scenario
A plausible description of how the future may develop, based on a coherent and
internally
consistent set of assumptions about key relationships and driving forces
(e.g., rate of
technology changes, prices). Note that scenarios are neither predictions nor
forecasts.
Standards/Performance Criteria
Set of rules or codes mandating or defining product performance (e.g., grades,
dimensions, characteristics, test methods, rules for use).
Structural Changes
Changes, for example, in the relative share of GDP produced by the industrial,
agricultural, or services sectors of an economy; or, more generally, systems
transformations whereby some components are either replaced or partially
substituted by
other ones.
Technical Potential
The amount by which it is possible to reduce GHG emissions or improve energy
efficiency
by using a technology or practice in all applications in which it could
technically be
adopted, without consideration of its costs or practical feasibility.
Technology
A piece of equipment or a technique for performing a particular activity.
Voluntary Measures
Measures to reduce GHG emissions that are adopted by firms or other actors in
the
absence of government mandates. Voluntary measures help make climate-friendly
products or processes more readily available or encourage consumers to
incorporate
environmental values in their market choices.
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UNITS
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