Kyoto + WTO

The Kyoto Protocol kick-off is also the start for the various tools or "flexible mechanisms" written into the treaty like Emissions Trading, Joint Implementation and the Clean Development Mechanism.

The trade in greenhouse gas emissions or carbon dioxide has already been underway and gaining pace with the launch of the EU Emissions Trading at the start of 2005. This allows member states struggling to meet their requirements under the Kyoto Protocol to purchase "carbon credits" from other nations who are well within their reduction targets, and now applies to all countries that have ratified the Kyoto Protocol.

The Clean Development Mechanism gives richer nations credits towards meeting their Kyoto targets if they invest in clean energy projects like wind or solar power in developing countries. Joint Implementation is a cooperative approach among industrialised nations to jointly set up projects that help each other reduce emissions.

Kyoto has essentially facilitated the trade in a new commodity – carbon, and it is likely to increase the flow of investment in clean energy projects around the world. But how will all this comply with the rules of the World Trade Organisation – the global trading body?