Kyoto Protocol


DEFINITION of 'Kyoto Protocol'

An international agreement that aims to reduce carbon dioxide emissions and the presence of greenhouse gases. Countries that ratify the Kyoto Protocol are assigned maximum carbon emission levels and can participate in carbon credit trading. Emitting more than the assigned limit will result in a penalty for the violating country in the form of a lower emission limit in the following period.

BREAKING DOWN 'Kyoto Protocol'

The Kyoto Protocol separates countries into two groups. Annex I includes developed nations, while Non-Annex I refers to developing countries. Emission limitations are only placed on Annex I countries. Non-Annex I nations participate by investing in projects that lower emissions in their own countries. For these projects, they earn carbon credits. These credits can be traded or sold to Annex I countries, which allow them a higher level of maximum carbon emissions for that period.

  1. Carbon Dioxide Tax

    A tax on businesses and industries that produce carbon dioxide ...
  2. Cap And Trade

    A regulatory system that is meant to reduce certain kinds of ...
  3. True Cost Economics

    An economic model that seeks to include the cost of negative ...
  4. Green Economics

    A methodology of economics that supports the harmonious interaction ...
  5. Carbon Trade

    An exchange of credits between nations designed to reduce emissions ...
  6. Globalization

    The tendency of investment funds and businesses to move beyond ...
Related Articles
  1. Investing

    Clean Or Green Technology Investing

    Innovations in energy and consumption grow as companies adopt them to reduce costs.
  2. Personal Finance

    What Is International Trade?

    Everyone's talking about globalization, so we explain what is it and why some oppose it.
  3. Mutual Funds & ETFs

    Getting Into International Investing

    Diversifying can mean not only investing in various asset classes but also venturing beyond domestic exchanges.
  4. Investing News

    Keystone XL Rejected: Which Stocks Will Win, Lose?

    Are investors overestimating the Keystone XL Pipeline news? Here's a look at some of the stocks they're likely liking right now.
  5. Investing

    Will Eni’s Discovery Affect Oil Prices?

    Following a massive natural gas discovery in the Mediterranean, Egypt's energy concerns will be coming to an end, but how does this affect oil prices?
  6. Stock Analysis

    How Oil and Ethanol Combine to Make Valero Rich

    Despite a lagging oil sector, Valero continues to have good results with its ethanol and oil refinery businesses.
  7. Stock Analysis

    Does Arch Coal Have a Fighting Chance?

    Whether or not investors want to admit it, Arch Coal's future path is obvious.
  8. Stock Analysis

    In Focus: Water Scarcity

    After a discussion, sponsored by CDP, we share the importance of water disclosure as it relates to businesses operating amid increasing water scarcity.
  9. Investing Basics

    The Inner Workings of a Big Regional Utility (DUK)

    Duke Energy is one of the quietest large companies in America. Few people outside of the Southeastern U.S. know about this highly profitable utility.
  10. Mutual Funds & ETFs

    Top 2 Vanguard Energy ETFs and Mutual Funds

    Read detailed analyses of an energy exchange-traded fund (ETF) and an energy mutual fund issued by Vanguard, and learn about their characteristics and historical statistics.
  1. What is the carbon trade?

    The carbon trade came about in response to the Kyoto Protocol. Signed in Kyoto, Japan, by some 180 countries in December ... Read Full Answer >>
  2. Do all oil companies received the quoted price of West Texas Intermediate for their ...

    The quoted, or spot, price of West Texas Intermediate, or WTI, crude oil is just one of several benchmark oil prices. The ... Read Full Answer >>
  3. How do the costs of oil sands producers compare to traditional drillers?

    The oil sands of Canada are some of the most expensive crude oil assets in the world to produce. Each asset type, such as ... Read Full Answer >>
  4. How do the average costs compare for the different types of oil drilling rigs?

    Average costs vary widely between different types of oil rigs, starting at around $20 million and ranging as high as close ... Read Full Answer >>
  5. How long does it take an oil and gas producer to go from drilling to production?

    Depending on the depth of drilling required and the type of drilling method used, a standard oil well can commonly advance ... Read Full Answer >>
  6. How does an oil and gas company measure and state its production?

    Measuring Oil and Gas Production Oil and gas exploration and production companies, or E&P companies, use three basic ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  4. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  5. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  6. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
Trading Center