Kyoto Mechanisms

UNDER THE KYOTO Protocol to the United Nations Framework Convention on Climate Change (UNFCCC), industrialized countries committed to reduce their greenhouse gas emissions by an average of minus 5.2 percent relative to their 1990 level emissions by 2008–12. To assist countries in attaining these reduction targets, the protocol created three flexible mechanisms. These mechanisms allow countries with reduction commitments to achieve their targets by acquiring credits from emissions reduced or avoided in other countries, where it may be more cost-effective to do so. The three mechanisms of the Kyoto Protocol are: Emissions Trading, Joint Implementation, and the Clean Development Mechanism. In this way, a country or a private or public entity within a country that reduces or avoids emissions more than it is required, may sell its emission reductions as credits to another country or entity that has not reduced its own emissions. Because greenhouse gases, in contrast to local pollutants, are uniformly distributed in the atmosphere within a week, it does not matter where the source of emissions is located. However, the cost of reducing or avoiding emissions may vary greatly.

Only countries with emission reduction targets under the protocol have “quantified emission limitation and reduction commitments,” known as QELRCs, calculated and quantified as an “assigned amount.” The total amount of emissions that each country with QELRCs can release 2008–12 (the first commitment period) must not exceed its assigned amount. Because emissions fluctuate from year to year, depending on the weather and economic cycles, an average over several years was chosen to check compliance with the reduction commitments. These are restrictions on a country's level of emissions, based on voluntarily adopted targets that collectively amount to a slightly more than 5 percent reduction relative to emissions in 1990. If a party exceeds its reduction target by cutting back on its emissions more than the amount specified in its QELRCs, it might sell its excess units or, under some circumstances, carry them over to the next commitment period. The QELRCs cover emissions of six greenhouse gases including: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), Hydrofluorcar-bons (HFCs), Per fluoro carbons (PCFs), and Sulfur hexafluoride (SF6).]

A total of 39 countries have QELRCs, and they are listed in Annex B of the protocol with their respective targets. They are referred to as Annex I parties because they are also listed in Annex I of the UNFCCC, including: Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, European Community, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Monaco, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Kingdom, and United States. The European Community as a group is also a party, and the countries that compose it have internally redistributed their assigned amounts to collectively achieve their targets. The United States and Australia have not ratified the protocol, even though they agreed to specific reduction targets like the other Annex I parties did in 1997 when the protocol was adopted. Therefore, they are parties to the UNFCCC, but are not parties to the Kyoto Protocol and cannot participate in its mechanisms.

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