International Emissions Trading

Abstract

Despite doubts over whether the Kyoto Protocol will ultimately be
adopted on a global basis, it has undeniably changed both public- and
private-sector attitudes and policies about emissions reductions and the
potential for trade of those reductions. The Kyoto Protocol is already
impacting the global economy.
Because there is significant political will in many countries to
implement the Kyoto Protocol—even if it is never ratified by the United
States—it will have a profound impact on the production and consump-
tion of energy around the world.
International companies—including power developers headquar-
tered in the United States—will have to meet the requirements of host
countries that have begun to promulgate laws and regulations focused
on the Kyoto Protocol.
One of the impacts the Kyoto Protocol has had is the development
of carbon trading schemes and carbon investment funds in many coun-
tries. For the most part, these markets are being developed as a reaction
to the Kyoto Protocol and as a way to meet its standards. But on a coun-
try level, these markets differ from each other, and it will be important
to understand those differences.