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 Credit

    A permit that allows the holder to emit one ton of carbon dioxide. ...
  2. Carbon Trade

    Carbon trade is an exchange of credits between nations designed ...
  3. Carbon Dioxide Tax

    A tax on businesses and industries that produce carbon dioxide ...
  4. Carbon Disclosure Rating

    A numerical score that indicates the level of reporting of a ...
  5. International Petroleum Exchange ...

    A London-based futures and option exchange, dealing predominantly ...
  6. Green Levy

    A tax imposed by a government on sources of pollution or carbon ...
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  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 Answer >>
  2. How do I transfer my credit card history from one country to another?

    Find out about some of the reasons why it is currently impossible to transfer your credit history to another country if you ... Read Answer >>
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