Kyoto Protocol The Kyoto Protocol is an international agreement linked to the United Nations Framework Convention on Climate Change,

which commits its Parties by setting internationally binding emission reduction targets. Recognizing that developed countries are principally responsible for the current high levels of GHG emissions in the atmosphere as a result of more than 150 years of industrial activity, the Protocol places a heavier burden on developed nations under the principle of "common but differentiated responsibilities." The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force on 16 February 2005. The detailed rules for the implementation of the Protocol were adopted at COP 7 in Marrakesh, Morocco, in 2001, and are referred to as the "Marrakesh Accords." Its first commitment period started in 2008 and ended in 2012. In Doha, Qatar, on 8 December 2012, the "Doha Amendment to the Kyoto Protocol" was adopted. The amendment includes:

New commitments for Annex I Parties to the Kyoto Protocol who agreed to take on commitments in a second commitment period from 1 January 2013 to 31 December 2020; A revised list of greenhouse gases (GHG) to be reported on by Parties in the second commitment period; and Amendments to several articles of the Kyoto Protocol which specifically referenced issues pertaining to the first commitment period and which needed to be updated for the second commitment period.

On 21 December 2012, the amendment was circulated by the Secretary-General of the United Nations, acting in his capacity as Depositary, to all Parties to the Kyoto Protocol in accordance with Articles 20 and 21 of the Protocol. During the first commitment period, 37 industrialized countries and the European Community committed to reduce GHG emissions to an average of five percent against 1990 levels. During the second commitment period, Parties committed to reduce GHG emissions by at least 18 percent below 1990 levels in the eight-year period from 2013 to 2020; however, the composition of Parties in the second commitment period is different from the first. The Kyoto mechanisms Under the Protocol, countries must meet their targets primarily through national measures. However, the Protocol also offers them an additional means to meet their targets by way of three market-based mechanisms. The Kyoto mechanisms are:

International Emissions Trading Clean Development Mechanism (CDM) Joint implementation (JI)

The mechanisms help to stimulate green investment and help Parties meet their emission targets in a cost-effective way. Monitoring emission targets Under the Protocol, countries' actual emissions have to be monitored and precise records have to be kept of the trades carried out. Registry systems track and record transactions by Parties under the mechanisms. The UN Climate Change Secretariat, based in Bonn, Germany, keeps an international transaction log to verify that transactions are consistent with the rules of the Protocol. Reporting is done by Parties by submitting annual emission inventories and national reports under the Protocol at regular intervals. A compliance system ensures that Parties are meeting their commitments and helps them to meet their commitments if they have problems doing so. Adaptation The Kyoto Protocol, like the Convention, is also designed to assist countries in adapting to the adverse effects of climate change. It facilitates the development and deployment of technologies that can help increase resilience to the impacts of climate change. The Adaptation Fund was established to finance adaptation projects and programs in developing countries that are Parties to the Kyoto Protocol. In the first commitment period, the Fund was financed mainly with a share of proceeds from CDM project activities. In Doha, in 2012, it was decided that for the second commitment period, international emissions trading and joint implementation would also provide the Adaptation Fund with a 2 percent share of proceeds. The road ahead The Kyoto Protocol is seen as an important first step towards a truly global emission reduction regime that will stabilize GHG emissions, and can provide the architecture for the future international agreement on climate change. In Durban, the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) was established to develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention, applicable to all Parties. The ADP is to complete its work as early as possible, but no later than 2015, in order to adopt this protocol, legal instrument or agreed outcome with legal force at

the twenty-first session of the Conference of the Parties and for it to come into effect and be implemented from 2020. international Emissions Trading Main articles: Emissions trading and Carbon emission trading A number of emissions trading schemes (ETS) have been, or are planned to be, implemented.[61]:1926 Asia Japan: emissions trading in Tokyo started in 2010. This scheme is run by the Tokyo Metropolitan Government.[61]:24 Europe

European Union: the European Union Emissions Trading System (EU ETS), which started in 2005. This is run by the European Commission.[61]:20 Norway: domestic emissions trading in Norway started in 2005.[61]:21 This was run by the Norwegian Government, which is now a participant in the EU ETS. Switzerland: the Swiss ETS, which runs from 2008 to 2012, to coincide with the Kyoto Protocol's first commitment period.[61]:22 United Kingdom:

the UK Emissions Trading Scheme, which ran from 200206. This was a scheme run by the UK Government, which is now a participant in the EU ETS.[61]:19 the UK CRC Energy Efficiency Scheme, which started in 2010, and is run by the UK Government.[61]:25

North America

Canada: emissions trading in Alberta, Canada, which started in 2007. This is run by the Government of Alberta.[61]:22 United States:

the Regional Greenhouse Gas Initiative (RGGI), which started in 2009. This scheme caps emissions from power generation in ten north-eastern US states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont).[61]:24 emissions trading in California, which is planned to start in 2012.[61]:26

the Western Climate Initiative (WCI), which is planned to start in 2012. This is a collective ETS agreed between 11 US states and Canadian provinces.[61]:25

Oceania

Australia: the New South Wales Greenhouse Gas Reduction Scheme (NSW), which started in 2003. This scheme is run by the Australian State of New South Wales, and has now joined the Alfa Climate Stabilization (ACS).[61]:19 New Zealand: the New Zealand Emissions Trading Scheme, which started in 2008.[61]:23

Intergovernmental Emissions Trading The design of the European Union Emissions Trading Scheme (EU ETS) implicitly allows for trade of national Kyoto obligations to occur between participating countries (Carbon Trust, 2009, p. 24).[62] Carbon Trust (2009, pp. 2425) found that other than the trading that occurs as part of the EU ETS, no intergovernmental emissions trading had taken place.[62] One of the environmental problems with IET is the large surplus of allowances that are available. Russia, Ukraine, and the new EU-12 member states (the Kyoto Parties Annex I Economies-in-Transition, abbreviated "EIT": Belarus, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, Slovenia, and Ukraine)[63]:59 have a surplus of allowances, while many OECD countries have a deficit.[62]:24 Some of the EITs with a surplus regard it as potential compensation for the trauma of their economic restructuring.[62]:25 When the Kyoto treaty was negotiated, it was recognized that emissions targets for the EITs might lead to them having an excess number of allowances.[64] This excess of allowances were viewed by the EITs as "headroom" to grow their economies.[65] The surplus has, however, also been referred to by some as "hot air," a term which Russia (a country with an estimated surplus of 3.1 billion tonnes of carbon dioxide equivalent allowances) views as "quite offensive." Green Investment Scheme A Green Investment Scheme (GIS) refers to a plan for achieving environmental benefits from trading surplus allowances (AAUs) under the Kyoto Protocol.[67] The Green Investment Scheme (GIS), a mechanism in the framework of International Emissions Trading (IET), is designed to achieve greater flexibility in reaching the targets of the Kyoto Protocol while preserving environmental integrity of IET. However, using the GIS is not required under the Kyoto Protocol, and there is no official definition of the term.[67] Under the GIS a Party to the Protocol expecting that the development of its economy will not exhaust its Kyoto quota, can sell the excess of its Kyoto quota units (AAUs) to another Party. The proceeds from the AAU sales should be "greened", i.e. channeled to the development and implementation of the projects either acquiring the greenhouse gases emission reductions (hard greening) or building up the necessary framework for this process (soft greening).