Combating climate change

Signed in 1997, the Kyoto Protocol is an amendment to an international treaty on global warming - the United Nations Framework Convention on Climate Change (UNFCCC). Over 150 countries have ratified this protocol (including Canada, Japan, New Zealand and the countries of the European Union) committing to reduce their greenhouse gas (GHG) emissions during the years 2008 through 2012 by 5.2% relative to a 1990 baseline. At the 2005 Montreal Conference, a commitment was made to go further after 2012.

There are many ways of reducing greenhouse gas emissions - including energy efficiency, renewable energy and carbon sequestration - and markets are the most economically efficient way to allocate capital amongst these methods. Emissions trading is particularly important in combating climate change and is at the heart of international policies to alleviate global warming.