Information about the Kyoto Protocol
The Kyoto Protocol represents a major accomplishment in the history of climate change
negotiations, so let’s take a moment to focus on it in a little more depth here.
The major feature of the Kyoto Protocol is that it sets binding targets for 37 industrialized
countries and the European Community for reducing greenhouse gas emissions. The targets
amount to an average reduction of 5% against 1990 levels over the five-year period between
2008 and 2012.
Recognizing that developed countries are principally responsible for the current high levels of
greenhouse gas concentrations in the atmosphere, the Kyoto Protocol divided countries into two
categories:
• Annex I: Industrialized countries
• Non-Annex I countries: Developing countries
Under the protocol, mandatory limits on the emission of greenhouse gas (GHG) were placed on
Annex 1 countries under the principle of “common but differentiated responsibilities”. No binding
requirements were placed on non-Annex I (developing) nations.
The Kyoto Protocol set up an International Emissions Trading (IET) market which is a cap-and-
trade system that allows Annex I countries to trade allowances with other Annex I countries.
(Cap-and-trade systems will be explained in the next section).
Two mechanisms were created under Kyoto to create flexibility in the market:
• Joint Implementation (JI) - emission reduction projects located in Annex I countries
can generate credits which can then be bought by other Annex I countries and used
for compliance in a regulatory cap-and-trade system.
• Clean Development Mechanism (CDM) - Annex I countries pay for credits from
emissions reductions that occur within developing nations (non-Annex I) that have
signed the Protocol. The purchasing Annex I nation may then use those credits for
compliance in a regulatory cap-and-trade system.
The Clean Development Mechanism is the only means by which developing countries can
participate in the Kyoto markets. It was introduced because the Parties recognized that the costs
of greenhouse gas mitigation varied significantly between countries and therefore it would be
more cost-effective to implement emissions reductions projects in countries where the costs were
lowest. The CDM projects are also meant to contribute to the sustainable development goals of
the developing country.
The Kyoto Protocol set specific emissions targets for countries, but did not set rules on how to
achieve those targets. The task of establishing rules was given to the Subsidiary Body for
Scientific and Technological Advice (SBSTA) of the UNFCCC. Specific rules for achieving targets
were developed in Marrakesh in 2001, including rules for how emissions from land use, land use
change, and forestry (LULUCF) would be incorporated into the accounting system.
The inclusion of LULUCF has been controversial. Many have seen it as simply a way to offset
emissions from the energy sector rather than as an additional means of greenhouse gas
mitigation. Plus uncertainties in establishing baselines, project leakage and non-permanence
added to the considerable debate over the inclusion of LULUCF in the Kyoto Protocol.
Regardless, the Kyoto Protocol requires Annex I countries to account for the carbon changes
associated with afforestation, reforestation, deforestation and all land use activities undertaken
since 1990. Developing countries can, however, only claim credits generated from afforestation
and reforestation through the CDM but not from avoided deforestation.
As almost 20% of global greenhouse gas emissions results from deforestation in developing
countries, this is now seen as a major omission from the Kyoto Protocol. A post-2012 agreement
that includes Reducing Emissions form Deforestation and Forest Degradation (REDD) represents
an opportunity to address this omission and create a system that includes all major sources of
emissions, including those from deforestation and forest degradation.
