The Kyoto Protocol’s flexible mechanisms:
By using the flexible mechanisms, companies and countries can choose to reduce CO2 emissions where it is most cost-effective, for example in a developing country.
The flexible mechanisms are among the most central points in the Kyoto Protocol and the object of extensive discussion, but at COP7 in Marrakesh in 2001 agreement was reached on their ultimate form. The mechanisms are called flexible, as they are intended to supplement the countries’ or companies’ own reductions in CO2. The issue of where in the world the reductions take place is irrelevant for the climate, and the flexible mechanisms allow this fact to be exploited. By using the mechanisms, companies and countries can choose to reduce CO2 emissions where it is most cost-effective, for example in a developing country. This also involves the transfer of technology, financing and skills to developing countries.
The Kyoto Protocol operates with three flexible mechanisms:
International Emissions Trading: The 37 countries that in the Kyoto Protocol have set targets for the quantity of greenhouse gases they are allowed to emit are able to trade these emissions permits among themselves. If a country has a surplus of these “CO2 quotas” because it has switched to a cleaner form of economy, it can sell them to one of the other countries.
Clean Development Mechanisms and Joint Implementation: Clean Development Mechanisms (CDM) and Joint Implementation (JI) are mechanisms whose purpose is to reduce the emission of greenhouse gases in concrete projects and concurrently to promote climate initiatives and sustainable development in developing countries. The projects generate CO2 credits that correspond to the reduction in greenhouse gases achieved by the project. The country that is hosting the JI or CDM project can sell the credits it obtains to companies or industrialised countries, which can use the credits to supplement domestic or internal initiatives.
One credit corresponds to one ton of CO2 emissions. CDM credits are reductions from concrete projects in countries with no reduction obligations in the Kyoto Protocol. These projects are carried out in developing countries. JI credits are reductions from concrete projects in countries that have undertaken a reduction obligation for greenhouse gases in accordance with the Kyoto Protocol. These projects are carried out primarily in Eastern Europe and Russia.
Up until the summer of 2008 just over 1,100 CDM projects had been approved. In total they represent reductions in greenhouse gas emissions of about 220 million tons of CO2 equivalents a year. The UNFCCC’s secretariat expects CDM projects covering a total of 2.7 billion tons of CO2 equivalents to be launched in the period from 2008 to 2012. There has been less activity involving JI, and 22 projects had been approved up to October 2008.
