The Kyoto Protocol was an international treaty which extended the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits state parties to reduce greenhouse gas emissions, based on the scientific consensus that (part one) global warming is occurring and (part two) that human-made CO2 emissions are driving it. The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force on 16 February 2005. There were 192 parties (Canada withdrew from the protocol, effective December 2012) to the Protocol in 2020.
Environmental finance is a field within finance that employs market-based environmental policy instruments to improve the ecological impact of investment strategies. The primary objective of environmental finance is to regress the negative impacts of climate change through pricing and trading schemes. The field of environmental finance was established in response to the poor management of economic crises by government bodies globally. Environmental finance aims to reallocate a businesses resources to improve the sustainability of investments whilst also retaining profit margins.
A carbon credit is a generic term for any tradable certificate or permit representing the right to emit a set amount of carbon dioxide or the equivalent amount of a different greenhouse gas (tCO2e).
The Clean Development Mechanism (CDM) is a United Nations-run carbon offset scheme allowing countries to fund greenhouse gas emissions-reducing projects in other countries and claim the saved emissions as part of their own efforts to meet international emissions targets. It is one of the three Flexible Mechanisms defined in the Kyoto Protocol. The CDM, defined in Article 12 of the Protocol, was intended to meet two objectives: (1) to assist non-Annex I countries achieve sustainable development and reduce their carbon footprints; and (2) to assist Annex I countries in achieving compliance with their emissions reduction commitments.
A carbon offset is a reduction or removal of emissions of carbon dioxide or other greenhouse gases made in order to compensate for emissions made elsewhere. Offsets are measured in tonnes of carbon dioxide-equivalent (CO2e). One ton of carbon offset represents the reduction or removal of one ton of carbon dioxide or its equivalent in other greenhouse gases. One of the hidden dangers of climate change policy is unequal prices of carbon in the economy, which can cause economic collateral damage if production flows to regions or industries that have a lower price of carbon—unless carbon can be purchased from that area, which offsets effectively permit, equalizing the price.
The European Union Emissions Trading System is a "cap and trade" scheme where a limit is placed on the right to emit specified pollutants over an area and companies can trade emission rights within that area. It covers around 45% of the EUs greenhouse gas emissions.
The emission reduction unit (ERU) is an emissions unit issued under a Joint Implementation project in terms of the Kyoto Protocol. An ERU represents a reduction of greenhouse gases under the Joint Implementation mechanism, where it represents one tonne of CO2 equivalent reduced.
Flexible mechanisms, also sometimes known as Flexibility Mechanisms or Kyoto Mechanisms, refers to emissions trading, the Clean Development Mechanism and Joint Implementation. These are mechanisms defined under the Kyoto Protocol intended to lower the overall costs of achieving its emissions targets. These mechanisms enable Parties to achieve emission reductions or to remove carbon from the atmosphere cost-effectively in other countries. While the cost of limiting emissions varies considerably from region to region, the benefit for the atmosphere is in principle the same, wherever the action is taken.
Joint Implementation (JI) is one of three flexibility mechanisms set out in the Kyoto Protocol to help countries with binding greenhouse gas emissions targets meet their treaty obligations. Under Article 6, any Annex I country can invest in a project to reduce greenhouse gas emissions in any other Annex I country as an alternative to reducing emissions domestically. In this way countries can lower the costs of complying with their Kyoto targets by investing in projects where reducing emissions may be cheaper and applying the resulting Emission Reduction Units (ERUs) towards their commitment goal.
Carbon finance is a branch of environmental finance that covers financial tools such as carbon emission trading to reduce the impact of greenhouse gases (GHG) on the environment by giving carbon emissions a price.
The Gold Standard (GS), or Gold Standard for the Global Goals, is a standard and logo certification mark program for non-governmental emission reductions projects in the Clean Development Mechanism (CDM), the Voluntary Carbon Market and other climate and development interventions. It is published and administered by the Gold Standard Foundation, a non-profit foundation headquartered in Geneva, Switzerland. It was designed with an intent to ensure that carbon credits are real and verifiable and that projects make measurable contributions to sustainable development. The objective of the GS is to add branding, with a quality label, to carbon credits generated by projects which can then be bought and traded by countries that have a binding legal commitment according to the Kyoto Protocol, businesses or other organizations for carbon offsetting purposes.
"Supplementarity", also referred to as "the supplementary principle", is one of the main principles of the Kyoto Protocol. The concept is that internal abatement of emissions should take precedence before external participation in flexible mechanisms. These mechanisms include emissions trading, Clean Development Mechanism (CDM), and Joint Implementation (JI).
Emission trading (ETS) for carbon dioxide (CO2) and other greenhouse gases (GHG) is a form of carbon pricing; also known as cap and trade (CAT) or carbon pricing. It is an approach to limit climate change by creating a market with limited allowances for emissions. This can lower competitiveness of fossil fuels and accelerate investments into low carbon sources of energy such as wind power and photovoltaics. Fossil fuels are the main driver for climate change. They account for 89% of all CO2 emissions and 68% of all GHG emissions.
EcoSecurities is a company specialised in carbon markets and greenhouse gas (GHG) mitigation projects worldwide. EcoSecurities specialises in sourcing, developing and financing projects on renewable energy, energy efficiency, forestry and waste management with a positive environmental impact.
The New Zealand Emissions Trading Scheme is an all-gases partial-coverage uncapped domestic emissions trading scheme that features price floors, forestry offsetting, free allocation and auctioning of emissions units.
This article is about the Kyoto Protocol and government action in relation to that treaty.
A Removal Unit (RMU) is a tradable carbon credit or 'Kyoto unit' representing an allowance to emit one tonne of greenhouse gases absorbed by a removal or carbon sink activity in an Annex I country.
Brazil has established a strong public policy using Clean Development Mechanism Projects to reduce methane emissions from landfills. An important component of these projects is the sale of avoided emissions by the private market to generate revenue.
An Emissions Trading Registry is a web-based application that records:
The Mid-Himalayan Watershed Development Project (MHWDP) is a 222,951 ha land husbandry initiative in Himachal Pradesh, India that aims by means of green growth and sustainable development to establish a functionally tenable watershed ecosystem. MHWDP has started to reverse several decades of degradation of the natural resource base including forests, has achieved improved agricultural yields and productivity, and has raised rural household incomes. It includes the Himachal Pradesh Reforestation Project (HPRF), the world's largest clean development mechanism (CDM) project.
