What are the market-based mechanisms of the Kyoto Protocol?
The Kyoto Protocol envisages three market-based mechanisms, known as the Kyoto flexible mechanisms: emissions trading between governments with Kyoto targets, the clean development mechanism and joint implementation. These will allow industrialised countries to meet their targets cost-effectively by trading emission allowances between themselves and gaining credits for emission-curbing projects abroad. The rationale behind these three mechanisms is that greenhouse gas emissions are a global problem and that the place where reductions are achieved is irrelevant in scientific terms. In this way, reductions can be made where costs are lowest. Detailed rules and supervisory structures have been set up to ensure that these mechanisms are not abused.
