First Verification of Greenhouse Gas Emissions Reductions is Achieved.

WASHINGTON--(BUSINESS WIRE)--July 8, 1999--

- GHG certification to support the goals of the Kyoto protocol - Major step in creating a market for CO2 emissions reduction

credits - Results promote market incentives for investment in greenhouse

gas reduction projects

At a ceremony at the World Bank today, Det Norske Veritas (DNV), an international certification foundation based in Norway, presented the first verification of greenhouse gas emissions reductions, which the company pioneered for a World Bank energy project in Mexico.

The project was implemented under the Activities Implemented Jointly (AIJ) Pilot Phase of the United Nations Framework Convention on Climate Change (UNFCCC).

This breakthrough forms a vital foundation for a future international certification standard for independent determination of actual reductions. The results pave the way for creating a market for CO2 emissions reduction credits and thus will significantly support the goals of the Kyoto Protocol.

By establishing that reduction in CO2 emissions can be verified, these results also will create opportunities for private investment in environment projects where returns can be measured in greenhouse gas emissions credits.

Following on the 1992 United Nations Framework Convention on Climate Change (UNFCCC), the 1997 Kyoto Protocol established mechanisms for the transfer of greenhouse gas emissions reductions between participating countries so as to more cost-effectively reduce the emission of climate changing gases to the atmosphere. The Parties envisage involvement of the private sector in the creation and transfer of GHG emission reductions.

The Protocol requires that within the period of 2008-2012, industrialized countries reduce their emissions of greenhouse gas by approximately five percent below their 1990 levels.

To gain international acceptance that the claimed reduced emissions are bona-fide reductions, however, claimed emissions reductions require certification by an independent, internationally recognized third party auditor.

The UNFCCC Parties currently are discussing the relevant modalities, and further decisions expected at the fifth Conference of the Parties in October 1999.

DNV was awarded a contract by the World Bank to determine whether such certification would be viable.

The DNV team designed a model framework based on their wide certification experience and best practices within energy and environmental management work, and applied this framework to the ILUMEX efficient lighting project on an experimental basis, which does not include the actual transfer of emissions reductions.

The ILUMEX project was implemented with financial support from the Kingdom of Norway under the Activities Implemented Jointly Pilot Phase agreed to by the UNFCCC Parties in 1995 for the purpose of creating learning opportunities.

The World Bank expects that the verification exercise completed to date by DNV will assist the UNFCCC Parties in making decisions on modalities for project-based emissions trading.

"The private sector typically views environmental responsibility as a cost; however, the ability to certify emissions reductions according to an international accepted standard will give environmental projects a profit incentive," notes Trygve Larsen, vice president of DNV. "We are grateful that this accomplishment, spearheaded by the World Bank, will promote environmental efforts by both the public and private sector."

This first attempt to verify greenhouse gas reductions is the result of a World Bank initiative to develop practical, transparent, and highly accountable systems to determine where real greenhouse gas emissions are reduced.

The verification process occurred in a unique energy saving project in Mexico, where residents of Monterrey and Guadalajara replaced ordinary light bulbs with energy efficient light bulbs, that are 75 percent more energy efficient and have ten times the lifetime.

The project sought to determine if these efficient light bulbs would contribute toward the reduction of greenhouse gas emissions from the power plants owned by the Mexican utility CFE. The Bank conducted an international competition, which resulted in the selection of DNV to conduct the verification.

The DNV team did indeed verify that 171,168 tons of CO2 equivalents had been abated during the years 1995-1998. It is hoped that this verification exercise will contribute to the development of an international standard for the certification of greenhouse gas emissions reductions.

Background Information

Participating companies:

In this pilot project DNV has collaborated with the Norwegian climate change policy institution CICERO (Center for Climate & Environmental Research - Oslo) and the US company ICF Consulting Inc., which is an expert in quantifying and verifying greenhouse emissions related to energy projects.

The project team represents:

- More than 100 years experience in standard-setting, auditing

according to standards, safety and environmental consulting, and

certifying compliance to standards (DNV)

- Extensive knowledge on the political, social and financial

aspects of greenhouse gas emissions reductions policies and

criteria (CICERO)

- Broad and in-depth technical insight in greenhouse gas and

climate change emissions verification issues (ICF Inc.)

Each company brought the highest dedication to environmental management and sustainable development. DNV's integrated team produced for the World Bank a quality product in terms of pilot verification protocols, project certification, and lessons learned, all of which will be made available to for the international community.

DNV expects to be a leader in independent certification within this emerging greenhouse gas emissions market, and looks to assisting farsighted agencies, institutions, and companies in developing the most rigorous standards of excellence.

This is DNV:

Established in 1864, Det Norske Veritas is an autonomous, independent foundation with the objective of safeguarding life, property and the environment. The DNV organization comprises 300 offices in 100 countries, with a total of 5,600 employees.

This is ICF Inc.:

ICF Inc. is one of the US' largest engineering, construction, program management, and environmental consulting services companies. Its 5,100 employees, located in 70 offices around the world, provide support to clients in a variety of market areas.

This is Cicero:

CICERO (Center for International Climate and Environmental Research - Oslo) was established in 1990 as a research center associated with the University of Oslo. The center has competencies in the natural sciences, economics, political science and sociology.