Kyoto Protocol
In 1997, the international community adopted the Kyoto Protocol, an agreement made under the United Nations Framework Convention on Climate Change (UNFCCC). Countries that have ratified the protocol commit to reducing their emissions of greenhouse gases: carbon dioxide, methan, nitrous oxide, ozone and freons (CFCs), or engaging in emissions trading if they maintain or increase emissions of these gases, and have the obligation to take part in the emissions trade.
The Kyoto Protocol entered into force in 2005 and now covers more than 170 countries.
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The major distinction between the convention and the protocol is that while the convention encourages developed countries to stabilize greenhouse gas emissions, the protocol engages them to do it in reality.
The Kyoto Protocol provides for three flexible mechanisms allowing greenhouse emissions reduction:
- Joint Implementation –an agreement allowing the industrialized countries to implement an emission-reducing projects or projects enhancing removals via carbon sinkscarbon sinks
are areas such as forests and oceans that can take in and store carbon dioxide from the air. In this way they partially offset greenhouse-gas emissions. (a change in land-use, or forest management) in the territory of other industrialized countries. Those projects need the approval of the countries involved and have to result in emissions reduction that would not have otherwise occurred. The benefits of the greenhouse emissions reduction are transferred to the country investing in it. - Clean Development Mechanism –an agreement allowing the industrialized countries with a greenhouse gas reduction commitment to invest in projects that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries. That mechanism allows net global greenhouse gas emissions to be reduced at a much lower global cost by financing emissions reduction projects in developing countries where costs are lower than in the industrialized countries. The investing countries have the additional aim of promoting sustainable development in the host country by offering modern technology.
- International Emissions Trading – Countries that have achieved greenhouse emissions reduction over and above those required by the Kyoto Protocol may sell their “extra results” to other countries that have problems to meet their obligations. Buyers (mainly developed countries) are the countries in which the costs of reducing emissions are high. Sellers (mainly the transition countries from Central and Eastern Europe and the former Soviet Union) are the countries where the costs are less tough or where their Kyoto commitments are actually lower than actual emissions. Economic modeling indicates that the above mechanism can lead to cost saving of 30 to 90 percent for countries and companies.
