Kyoto Protocol
1. Protocol Summary
The international agreement known as the Kyoto Protocol
was adopted by the majority of countries in the world to
regulate and minimise the world’s emissions to combat
global warming.
The Protocol’s aim is to reduce greenhouse gas (GHG)
emissions, namely carbon dioxide, and nitrous oxide and
other gases which are emitted from combustion engines
from industrial plants.
Whilst those participating countries have voluntarily
signed this Protocol they are legally required to meet
certain emissions target by 2012. Eventually
participating countries that do not meet the targets
will be penalised.
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2. Three Key Mechanisms Under the Protocol
The Protocol provides three mechanisms that enable the
acquisition of Carbon Credits:
Joint Implementation (JI) – under this mechanism an
industrialised country, which has relatively higher
costs, can establish a greenhouse reduction project in
another industrialised country, which has a relatively
low cost.
Clean Development Mechanism (CDM) - An industrialised
country can adopt a greenhouse gas reduction project
activity in a developing country where the cost of such
project is substantially lower. Under this arrangement a
developing country would receive the necessary capital
for the project and “Green” technology to start up the
project. In return, the industrialised country would be
granted the credits for achieving its emission reduction
targets in this project.
International Emission Trading (IET) – Under this
mechanism, nations can buy and sell carbon credits in
the International Carbon Credit Scheme. In other words,
nations with excess carbon credits can sell the same to
nations with quantified emission limitation and
reduction commitments under the Protocol.
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