These tradable carbon credits can then be used to meet emission reduction or limitation commitments under the Kyoto Protocol. JI will generate real projects which will help green the economies of central and eastern Europe. With its launch, we can expect emission reductions in the order of several hundred million tonnes of CO2 by the end of the first commitment period of the Kyoto Protocol. The JI is similar to the Kyoto Protocol’s clean development mechanism (CDM), which permits industrialized countries to invest in sustainable development projects in developing countries, and thereby generate tradable emission credits.
While smaller in terms of its emissions reduction potential, it is an equivalent to the CDM with regard to cooperation among countries that have targets under the Kyoto Protocol and a credible alternative to the much-feared ‘hot air.' ‘Hot air’ refers to the concern that some countries will have excess emission allowances under the Kyoto Protocol without undertaking specific efforts to reduce emissions and that they could then flood the carbon market by selling them at lower price, reducing the incentive for other countries to cut emissions.
The Kyoto Protocol presently requires 35 industrialized countries and the European Community to reduce greenhouse gas emissions by an average of 5% below 1990 levels in its first commitment period between 2008 and 2012.
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