Issue description
There is a worldwide consensus that emissions of greenhouse gases are the cause behind the average temperature increase during the 20th century. Agreements were made at the UN Climate Conference in Kyoto in 1997 to reduce emissions of greenhouse gases.
The Kyoto Protocol was worked out in more detail in July 2001 and entered into force 16 February 2005. The current agreement is a first step to reduce the global emission of greenhouse gases during the 2008-2012 period by 5,2 percent compared with the reference year 1990. Among those who have committed themselves to reduce the level for the six greenhouse gases the European Union has committed itself to 8 percent, Japan and Canada to 6 percent.
The Kyoto Protocol includes the possibility of trading emissions to achieve emission reductions cost-effectively. The European Commission has presented a Directive establishing a mandatory scheme for greenhouse gas trading within the European Community. The Directive involves two phases: a preliminary phase from before the first Kyoto compliance period 2005-2007 and a second phase from 2008 onwards.
National emissions trading programmes for the first period 2005-2007 have also recently been launched in all EU25 countries. Trading is now done at special marketplaces and between companies. The Prototype Carbon Fund has been founded by the World Bank to promote project-based trading.