The Kyoto Mechanisms
Countries with commitments under the Kyoto Protocol to limit or reduce greenhouse gas emissions must meet their targets primarily through national measures. As an additional means of meeting the targets, three market-based mechanisms were introduced.
The Kyoto Protocol is an international agreement linked to the United Nations Framework Convention on Climate Change (UNFCCC) aimed at tackling global warming. It sets binding targets for 37 countries and the European Community for reducing greenhouse gas emissions:
By setting such targets, emission reductions took on economic value. To help countries meet their emission targets, and to encourage the private sector and developing countries to contribute to emission reduction efforts, negotiators of the Protocol included three market-based mechanisms: