Carbopedia

The Kyoto Protocol

The Kyoto Protocol is currently the strongest binding global action plan on global warming. The protocol establishes legally binding greenhouse gas (GHG) emission targets for countries.

The Protocol includes flexibility mechanisms to help countries meet their emission reduction targets.

First, parties with commitments have accepted targets for limiting emissions. These targets are expressed as levels of allowed emissions over the 2008-2012 commitment period. The allowed emissions are divided into "Assigned Amount Units" (AAUs). Emissions trading allows countries with spare emission units to sell this excess capacity to countries that are over their targets.

The second of these flexibility mechanisms was the creation of two types of carbon credits available for trading; Certified Emission Reduction carbon credits (CERs) and Emission Reduction Units (ERUs).

The Clean Development Mechanism (CDM) allows a country with an emission-reduction commitment to implement an emission-reduction project in developing countries, and earns CER credits, each equivalent to one tonne of CO2, which can be counted towards meeting Kyoto targets.

The mechanism known as "joint implementation," allows a country with an emission reduction commitment to earn ERUs from an emission-reduction or emission removal project in another Annex B Party, each equivalent to one tonne of CO2, which can be counted towards meeting its Kyoto target.