Kyoto protocol is the first legal binding instruments for developed countries. The said treaties demarcated specific bindings for the developed countries to reduce green house gas emissions within 2012. The treaty mentioned three flexible mechanisms such as Emissions Trading, Clean Development and Joint Implementation Mechanism. This protocol seeks to provide an overview of the functions of emissions trading, the Clean Development Mechanism and the last one is Joint Implementation mechanism.
1. The emission trading is a flexible means that has included creating a cap and trading system of GHGs. as Annex B signatories are legally bound to GHG reduction commitments, the parties are given to buy that points in consideration of payment equivalent to their targeted emission reduction commitments. It like a trade concept the states the countries which have much ability towards reducing the use and production of green house gas the others states can take the opportunity to use that capabilities by giving financial benefits.
Though, the concept of emission trading and the carbon market are still in its immaturity stages and a lot of room left for improvement and development in the coming years ahead.
2. Joint Implementation is another important flexibility mechanism in the Kyoto Protocol. Its basic function under Article 6 allows parties included in Annex I to invest in projects in other Annex I countries as an alternative to take domestic action for implementing obligations.
3. The Clean Development Mechanism is a flexible mechanism that introduced under the Kyoto Protocol to allow Annex B countries with GHG reduction commitments to invest in sustainable, GHG reducing projects and technologies sharing in the projects which is taken by any developing countries.
From analyzing the above mentioned, it can be said that the current status of the flexible mechanisms of the Kyoto Protocols are not exhaustive, it has shown that the flexibility mechanisms are still in an infancy stage and will require more time and scope in the system in order to mature into an efficient method of encouraging the abatement of GHGs at the lowest possible cost.
