In December 1997, a global treaty to reduce emissions of gases which may be changing the Earth's climate was agreed in Kyoto. The discussions had almost collapsed because of political infighting. India and China nearly destroyed the treaty by objecting to an international trade in pollution permits on the grounds that emissions trading was not fair to poor countries.

THE MAIN KYOTO COMMITMENT

The Kyoto protocol commits developed countries to making legally-binding reductions in their emissions of carbon dioxide by 2010, the European Union countries by eight per cent, the United States by seven per cent and Japan by six per cent. Other nations were expected to offer six per cent.

Russia, New Zealand, and Ukraine are to stabilize their emissions, while Norway may increase emissions by up to 1%, Australia by up to 8%, and Iceland 10%.  Demonstrable progress on these commitments will have to be shown by 2005.  The Kyoto agreement gives countries some flexibility in measuring and achieving their emissions reductions.

A clean development mechanism enables industrialized countries to finance emissions-reduction projects in developing countries and receive credit for doing so.  An international emissions trading regime is planned to allow industrialized countries to buy and sell excess emissions credits amongst themselves.

MARKETABLE POLLUTION PERMITS - A STEP CLOSER

One important aspect of the Kyoto Summit is the progress made in introducing traded pollution permits as a means of pricing the use of carbons.  Within a decade, under the treaty, industries are likely to have to buy permits to pollute, if they wish to allow their emissions to grow. Alternatively they will have to fit energy-saving equipment.  These permits will be tradeable allowing each country to meet some of their targets by buying up rights to pollute in other countries.  In 1998, the Labour Government published it's own proposals to reduce carbon dioxide emisions. Arising from this is the introduction of the climate change levy.