This paper discusses how there is an
international recognition of the immediate need to reduce
greenhouse gases (GHGs) and
remedy the problem of global warming. The Kyoto Protocol was established in December 1997 as an agreement between over 160 countries to set targets for the reduction of GHGs and determined available options to achieve them. It shows how the Protocol includes three Kyoto mechanisms, which are three market-based instruments that enable nations to buy or earn credits on an
international scale. It examines how developed countries that have accepted a Kyoto target throughout the world are developing emissions trading programs in order to achieve these targets in a cost-effective manner.