The Kyoto Protocol, adopted in Kyoto, Japan, in 1997, commits 37 industrialized countries and the European Union to the so-called Kyoto target of reducing their greenhouse gas emissions by an average of 5% against 1990 levels, over the 2008-2012 period. At the 2012 United Nations Climate Change Conference there was an agreement to extend the life of the Kyoto Protocol until 2020.
The Protocol was adopted at the Third Conference of the Parties to the United Nations Convention on Climate Change in December 1997 and came into force on 16 February 2005. The main distinction between the Kyoto Protocol and the Convention is that while the Convention encouraged industrialized countries to stabilize emissions, the Protocol sets binding targets.
To date, there are 192 parties (191 states and 1 regional economic integration organization, namely the EU) that have ratified the Protocol. Signatories must meet their targets primarily through national measures. However, the Kyoto Protocol offers an additional means of meeting targets through three market-based Kyoto mechanisms:
- emissions trading (also known as the carbon market);
- clean development mechanism (an emission-reduction project in the developing world);
- joint implementation (to encourage foreign investment and technology transfer).
These measures are designed to stimulate green investment and help signatories meet their emission targets in a cost-effective manner.
The progress towards the target is calculated in comparison with the level of emissions in a historical year, called the Kyoto base year, which for most EU countries is 1990. The collective EU-15 commitment has a Kyoto base year 1990, while other EU countries have different base years, namely Bulgaria (1988), Hungary (average of 1985-1987), Poland (1988), Romania (1989) and Slovenia (1986). In addition, countries may choose to use 1995 as the base year for total emissions of hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride (F-gases), in accordance with Article 3, paragraph 8 of the Protocol. In the EU-27, almost all countries have adopted the year 1995 as a base year for F-gases, except Austria, France, Italy and Slovakia which have 1990.