The Kyoto Protocol is effective until 2012 after which it will be replaced by an agreement likely to be reached by the UN Climate Change Conference in Mexico in late 2010. Follow developments in this regard at http://unfccc.int.

The aim of the Kyoto protocol is to reduce the emission of green-house gases. The protocol makes a distinction between the Developed World and the Developing World based on the argument that the Developed World has been responsible for the bulk of the historical emissions of green-house gases. As such, the Developed World (as defined by the Kyoto Protocol, but with the exception of the USA and Australia) is expected to bear the initial burden of reducing their green-house gases. These countries (mostly Europe, Japan and Canada) have accepted caps on their annual green-house emissions.

In order to promote the participation of the Developing World in the efforts to reduce green-house gases, the so-called Clean Development Mechanism (CDM) was developed. After the Kyoto Protocol came into effect in 2005, it became possible for companies in the Developing World (including in South Africa) to initiate projects with the aim of reducing green-house gas emissions, obtain Certified Emission Reduction (CER) certificates for these projects and to sell these CER’s (carbon credits) into the carbon market.

The Clean Development Mechanism is governed by the Executive Board of the UNFCCC. The Executive Board has created a strict regulatory environment to govern the issue of the CER’s. The regulatory environment includes standard processes, methodologies, tests and parameters for the destruction of green-house gases in order to ensure that a CER issued in one country destroys the same amount of green-house gases as a CER issued in another country. Approved CDM methodologies cover such diverse green-house destruction activities as the destruction of methane from landfill sites, the generation of electricity from renewable sources, the substitution of fossil fuels with alternative fuels, the generation of electricity from coal-bed methane and many more.

The following link to the Executive Board provides insight into the many different ways in which green-house gases emissions can be minimised or eliminated in return for carbon credits - http://cdm.unfccc.int/methodologies

The implementation of CDM projects has taken off and it is possible to see a list of the CDM projects registered by following the link - http://cdm.unfccc.int/Projects