The temperature of the earth has risen significantly over the last decades. There is worldwide
consensus that emissions of greenhouse gases (GHG) are causing this temperature rise. Hence,
in 1997 agreements were made at the United Nations Climate Change Conference (UNCCC) in
Kyoto to make common efforts to reduce the emissions of greenhouse gases caused by various
human activities.
The Kyoto Protocol binds the developed countries to specific targets of emission reduction that
on an average corresponds to a total global reduction of at least 5.2% for the period 2008-2012.
This is also called the first commitment period.
One of the rationales of the Kyoto Protocol is that, it does not matter where the GHG emission
reductions take place, because in a global picture any emission reduction will benefit us all.
Therefore, to stimulate local initiatives three flexible mechanisms were identified. These
mechanisms should help stimulate investments and the implementation of environmental
friendly technologies that eventually will support the global GHG emission reduction.
The three mechanisms that were developed are:
1. Clean Development Mechanism (CDM)
2. Joint Implementation (JI)
3. Emissions Trading
