Carbon Pulse dossiers are regularly updated databanks on carbon pricing policies and programmes. Each builds into a powerful online research tool with key news, analysis, opinion, data, charts, tables, timelines, supporting documents and links, all in one place. Full access to Carbon Pulse dossiers is available with a subscription.
The Kyoto Protocol
Kyoto Protocol – 1st compliance period (CP1) (2008-2012)
There were three carbon market mechanisms defined under the UNFCCC’s 1997 Kyoto Protocol: The Clean Development Mechanism (CDM), Joint Implementation (JI) and International Emissions Trading (IET).
Targets for the first Kyoto Protocol commitment period 2008-2012 initially seemed tough for developed country parties with targets-mainly Kyoto host Japan, and southern European economies Spain and Italy. This spurred demand for trade in the carbon credits created under the three mechanisms, respectively Certified Emission Reductions (CERs), Emission Reduction Units (ERUs) and Assigned Amount Units (AAUs) and briefly pushing prices to above €20 each as developers raced to built the projects.
However, most of that demand outlook was based upon a global successor to the Kyoto Protocol being struck in 2009 in Copenhagen. That deal, which could have resulted in a post-2012 global carbon market, collapsed and resulted in great uncertainty as countries dithered in negotiating a new pact and prices for Kyoto credits plunging to unprofitable levels below $1/tonne. The rate of project registration and issuance nonetheless climbed until 2013 as developers rushed to get their schemes to market, though they have tailed off since to very low levels.
Most AAUs were bought by Japan and Japanese companies, as well as southern European nations, though their demand profile was substantially reduced as their industries slowed drastically following the 2008 economic downturn.
<CONTENT BELOW IS BY CARBON PULSE AND AVAILABLE ONLY TO SUBSCRIBERS>