The Kyoto Protocol, adopted in 1997, introduced the Kyoto mechanisms, including the Joint Implementation Mechanism, Clean Development Mechanism, and Emissions Trading System, to reduce greenhouse gases. These mechanisms promote cooperation between developed and developing countries, and are designed to allow them to pursue economic benefits and environmental protection at the same time.
The Kyoto Protocol, adopted in December 1997, was the first international binding agreement to reduce greenhouse gas emissions, a major contributor to global warming and climate change, and was designed to harmonize environmental protection with economic benefits. By imposing legally binding reduction targets on industrialized countries, the Kyoto Protocol set a clear baseline for reducing greenhouse gas emissions globally. It marked a major turning point in the global fight against climate change and is significant in the history of global environmental conservation.
The Kyoto Protocol introduced three main regimes to effectively and economically reduce greenhouse gases. These are the Joint Implementation Mechanism, the Clean Development Mechanism, and the Emissions Trading System, collectively referred to as the Kyoto Mechanism. The Kyoto Mechanism is a recognition that developed countries cannot meet all of their GHG reduction obligations within their borders alone, and is designed to allow countries to work together to achieve reductions more efficiently.
The Joint Implementation System regulates GHG trading among industrialized countries and allows two or more industrialized countries to undertake GHG reduction projects jointly, i.e., one country can invest in another country and receive credit for a portion of the GHG reductions in the investor country. This system can increase the cost-effectiveness of achieving reduction targets and promote cooperation and technology exchange among developed countries. Although Korea was not a GHG reduction obligated country at the time, it is important to be aware of and prepare for the trends in the Joint Implementation System discussions, given the international pressure and the possibility of expanded reduction obligations in the future. In particular, as South Korea’s GHG emissions have increased rapidly during the industrialization process, it is necessary to examine the possibility of leveraging technology and capital from developed countries through a joint implementation system to efficiently manage its own mitigation efforts.
The Clean Development Mechanism is a system in which developed countries, which are obligated to reduce greenhouse gas emissions, carry out mitigation projects in developing countries and receive part of the results as credits for their own reductions. It is more than just mitigation, it is an important mechanism for closing the technological and financial gap between industrialized and developing countries. Not only does the Clean Development Mechanism allow developed countries to meet their emissions targets at a lower cost, but it also gives developing countries the opportunity to adopt environmentally friendly technologies and develop their industries. In the long run, this can contribute to strengthening global climate change response capacity. Although South Korea became a mandatory GHG emissions reducer in 2013, it had been voluntarily reducing its emissions before then, so its reductions were retroactively recognized, giving it an advantage in future international negotiations.
Cap-and-trade is a system that allows obligated countries to trade their excess emission reductions with other countries if they exceed their obligations. By allowing greenhouse gas reductions to be traded like a commodity on the market, the international community has created new economic incentives. Cap-and-trade allows countries to reduce their emissions as much as possible to earn revenue from selling credits, and conversely, countries with high abatement costs can purchase relatively cheap carbon credits to reduce their abatement costs. This is expected to minimize the overall cost of abatement. In addition, cap-and-trade is an important part of global cooperation to combat climate change and plays an important role in realizing greenhouse gas emission reduction targets. Governments and companies have utilized the system to promote their own economic interests while fulfilling their international responsibility to preserve the global environment.
Since the introduction of the Kyoto mechanism, although some countries have not participated in the system, many ratifying countries have been active in clean development projects. In 2003, the Netherlands launched a methane-to-energy project in Brazil, and in just over two years, 126 projects were underway around the world. The total amount of greenhouse gases to be reduced through these projects was expected to reach 1,153 tons by 2012. As such, the international community is moving toward a common goal of reducing greenhouse gases through the Kyoto mechanism. The success of these projects emphasizes that continued cooperation between developed and developing countries is essential to combatting climate change, and this cooperation will become increasingly important in the future.
The carbon emissions trading market has also grown rapidly, with more than KRW 30 trillion worth of transactions in 2007 alone. These developments underscore the need to approach the issue of greenhouse gas reduction from an economic perspective, not just an environmental one. Although greenhouse gases are blamed for global warming, the reduction of greenhouse gases is now transforming into a huge economic sector, with new terms such as “carbon economy,” “carbon market,” and “carbon fund” being coined. This heralds a new era in which the environment and the economy can work complementarily, and suggests that international efforts to achieve sustainable development must continue.
