The Kyoto Protocol strengthens the United Nations Framework Convention on Climate Change by establishing a framework for the direct implementation of actions reducing GHG emissions. The protocol was adopted in 1997 and entered into force in February 2005 after its ratification by Russia.

Countries having ratified the Kyoto Protocol have committed themselves to reducing their GHG emissions throughout 2008-2012 by 5.2% compared to the year 1990. National targets vary across Kyoto countries, the European community having committed itself to an 8% target, while Canada and Japan have a 6% target.

The Kyoto Protocol paved the way for new opportunities by establishing three specific mechanisms, namely:

• Emissions trading between signatory countries
• The Clean Development Mechanism
• Joint Implementation

These mechanisms aim to enhance the cost-effectiveness of mitigation measures by offering signatory countries the choice between reducing emissions at home or in another country. The cost of reducing emissions can vary from a region to another but the global environmental benefits for the atmosphere are the same. 

The Clean Development Mechanism (CDM)

The goal of the CDM is to support and promote investments in developing countries in order to facilitate the transfer of environmentally friendly technologies. This mechanism allows countries listed under Annex I of the United Nations Framework on Climate Change (developed countries) to implement GHG emissions reduction projects in developing countries.

Joint Implementation (JI)

JI allows countries listed under Annex I of the United Nations Convention to implement emissions reduction projects in other Annex I countries. JI projects concretely take place in Annex I countries with economies in transition such as eastern European countries.

Monitoring plan and emissions reduction credits

CDM and JI projects must display a rigorous monitoring plan allowing collection of precise data on GHG emissions. These elements must be established using methodologies approved by the United Nations CDM Executive Board, in charge of overseeing the global deployment of the CDM and JI.

Emissions reductions resulting from CDM and JI projects translate into emissions reduction credits tradable on the global carbon market. Emissions reductions are estimated and measured in comparison to a baseline level, namely the amount of emissions that would have taken place if the project had not been developed.