What is the Kyoto Protocol

The Kyoto Protocol is an international treaty – signed in 1997 in the Japanese city of Kyoto – that seeks to limit man’s influence on climate change by reducing the production of greenhouse gases. The protocol obligates industrialised countries to reduce their emissions in the five-year period 2008-2012 by 5% on average compared with 1990 levels. Developing countries don’t have emission-reduction targets.

The emissions savings can be achieved in two ways:

1. through ad hoc measures adopted by each country;
2. through the awarding or purchase of “carbon credits”, which are generated by pollution-cutting projects.

Projects to limit the production of greenhouse gases can be carried out either in countries that have emissions targets – in which case they are administered by the flexible mechanism known as Joint Implementation (JI) – or in countries that don’t have targets, in which case credits are generated through the Clean Development Mechanism (CDM). These credits are valid in the European Union’s Emission Trading System (EU ETS), the European emissions market.

The European directive that governs the EU ETS forces companies operating in the most polluting sectors (such as steel and energy) to cap their output of carbon dioxide to levels that are fixed in national allocation plans. These companies can meet their emission goals by reducing their own output, by buying excess credits from “cleaner” companies in the region or else by buying or generating credits created through the JI and CDM mechanisms.

Link to further information on the Kyoto Protocol (Italian only)