UNFCCC

In 1992, countries joined an international treaty, the United Nations Framework Convention
on Climate Change, to cooperatively consider what they could do to limit average global
temperature increases and the resulting climate change, and to cope with whatever impacts
were, by then, inevitable.

By 1995, countries realized that emission reductions provisions in the Convention were
inadequate. They launched negotiations to strengthen the global response to climate change,
and, two years later, adopted the Kyoto Protocol. The Kyoto Protocol legally binds
developed countries to emission reduction targets. The Protocol’s first commitment period
started in 2008 and ended in 2012. The second commitment period began on 1 January 2013
and will end in 2020.

There are now 195 Parties to the Convention and 192 Parties to the Kyoto Protocol.
The UNFCCC secretariat supports all institutions involved in the international climate
change negotiations, particularly the Conference of the Parties (COP), the Conference of the
Parties serving as the meeting of the Parties (CMP), the subsidiary bodies (which advise the
COP/CMP), and the COP/CMP Bureau (which deals mainly with procedural and
organizational issues arising from the COP/CMP and also has technical functions). For a
brief depiction of how these various bodies are related to one another, please see Bodies.

The question of what happens beyond 2020 was answered by Parties in Durban (2011). For
more information on the Durban Platform for Enhanced Action, click here.

Climate change is a complex problem, which, although environmental in nature, has

consequences for all spheres of existence on our planet. It either impacts on-- or is impacted
by-- global issues, including poverty, economic development, population growth, sustainable
development and resource management. It is not surprising, then, that solutions come from
all disciplines and fields of research and development.

At the very heart of the response to climate change, however, lies the need to reduce
emissions. In 2010, governments agreed that emissions need to be reduced so that global
temperature increases are limited to below 2 degrees Celsius.

Climate change in context

This time line detailing the international response to climate change provides a contextual
entry point to the Essential Background. You can also use the links on the left-hand column
under Essential Background to navigate this section.

2012 - The Doha Amendment to the Kyoto Protocol is adopted by the CMP at CMP8. More
on the Doha Amendment.

2011 — The Durban Platform for Enhanced Action drafted and accepted by the COP, at
COP17. More on the Durban outcomes.

2010 — Cancun Agreements drafted and largely accepted by the COP, at COP16. More on
the Cancun Agreements.

2009 — Copenhagen Accord drafted at COP15 in Copenhagen. This was taken note of by
the COP. Countries later submitted emissions reductions pledges or mitigation action
pledges, all non-binding.

2007 — IPCC's Fourth Assessment Report released. Climate science entered into popular
consciousness. At COP13, Parties agreed on the Bali Road Map, which charted the way
towards a post-2012 outcome in two work streams: the AWG-KP, and another under the
Convention, known as the Ad-Hoc Working Group on Long-Term Cooperative Action
Under the Convention. More about the Bali Road Map.

2005 — Entry into force of the Kyoto Protocol. The first Meeting of the Parties to the Kyoto
Protocol (MOP 1) takes place in Montreal. In accordance with Kyoto Protocol requirements,
Parties launched negotiations on the next phase of the KP under the Ad Hoc Working Group
on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP). What
was to become the Nairobi Work Programme on Adaptation (it would receive its name in
2006, one year later) is accepted and agreed on. More about the Nairobi Work Programme.

2001 — Release of IPCC's Third Assessment Report. Bonn Agreements adopted, based on
the Buenos Aires Plan of Action of 1998. Marrakesh Accords adopted at COP7, detailing
rules for implementation of Kyoto Protocol, setting up new funding and and planning
instruments for adaptation, and establishing a technology transfer framework.

1997 — Kyoto Protocol formally adopted in December at COP3. More about the Kyoto
Protocol.

1996 — The UNFCCC Secretariat is set up to support action under the Convention. More on
the Secretariat.

1995 — The first Conference of the Parties (COP 1) takes place in Berlin.

1994 — UNFCCC enters into force. An introduction to the United Nations Framework
Convention on Climate Change.

1992 — The INC adopts UNFCCC text. At the Earth Summit in Rio, the UNFCCC is
opened for signature along with its sister Rio Conventions, UNCBD and UNCCD. More
about the two other Rio Conventions: UNCBD and UNCCD.

1991 — First meeting of the Intergovernmental Negotiating Committee (INC) takes place.

1990 — IPCC's first assessment report released. IPCC and second World Climate
Conference call for a global treaty on climate change. United Nations General Assembly
negotiations on a framework convention begin.

1988 — The Intergovernmental Panel on Climate Change is set up. More about the science
of climate change.

1979 — The first World Climate Conference (WCC) takes place.

Where are we now?
The year 2007 marked a new and disturbing global realization. The world learnt that year
that climate change was human-made, definitely happening, and that the collective global
effort so far to keep greenhouse gases to a “safe” level was grossly insufficient.

The Intergovernmental Panel on Climate Change (IPCC) had released its Fourth Assessment
Report (AR4), in the wake of an unusual number of severe weather-related disasters, and at
the head of an almost unbroken series of the hottest years on record. Any child under the age
of 10 in 2007 was part of this worrying global trend: almost every year he or she had lived on
Earth had been among the hottest in living record.

These are some basic well-established links:

 the concentration of greenhouse gases in the earth’s atmosphere is directly linked to

the average global temperature on Earth;
 the concentration has been rising steadily, and mean global temperatures along with it,
since the time of the Industrial Revolution; and
 the most abundant greenhouse gas, carbon dioxide, is the product of burning fossil
fuels.

Greenhouse gases occur naturally and are essential to the survival of humans and millions of
other living things, through keeping some of the sun’s warmth from reflecting back into
space and making Earth livable. But it’s a matter of scale. A century and a half of
industrialization, including clear-felling forests and certain farming methods, has driven up
quantities of greenhouse gases in the atmosphere. As populations, economies and standards
of living grow, so does the cumulative level of GHG emissions.

AR4 took stock of where we are and what we now know. Thanks to the IPCC, here's a quick
snapshot of what we know:

The average temperature of the earth’s surface has risen by 0.74°C since the late 1800s. It is
expected to go up another 1.8°C to 4°C by the year 2100 if no action is taken. That’s a fast
and intense change in geological time. Even if it “only” gets another 1.8°C hotter, it would
be a larger increase in temperature than any century-long trend in the last 10,000 years.

 About 20-30% of plant and animal species is likely at higher risk of extinction if the
global average temperature goes up by more than 1.5 to 2.5°C.
  Nine of the last 10 years were the hottest years on record, according to the United
States’ National Oceanic and Atmospheric Administration (NOAA). 2005 and 2010
tied for first place. In second place was 1998.
 The average sea level rose by 10 to 20 cm over the 20th century. An additional
increase of 18 to 59 cm is expected by the year 2100. Higher temperatures cause
ocean volume to expand. Melting glaciers and ice caps add more water. And as the
bright white of ice and snow give way to dark sea green, less and less rays from the
sun are reflected back into space, intensifying the heating.

What we know we don’t know, and what we don’t know we don’t know

But, these days, it is what we don’t know that is the most worrying— because you can’t
properly prepare for what you can’t foresee. Knock-on effects of even small changes in many
natural systems show just how delicate a balance nature strikes.

Scientists talk about “tipping points”, where a gradual change suddenly moves into a self-
fuelling spiral. How much methane is trapped in the melting permafrost and in sea-beds in a
warming ocean, and, if some or all of that methane is released, what effect will it have on the
global temperature and climate? If the ice cover in the poles keeps shrinking so that there is
less bright white surface and more dark liquid sea surface, how much more heat from the sun
will the dark surface trap, and how much less can the ice packs reflect back into space? Sea
mass expands when warm— how much will this add to sea level rise?

Each of these is among the simplest examples of potential vicious cycles identified by
scientists.

There is also another unknown. At some point, bright children ask questions about
electricity, light and heat, and, inevitably, "where does oil come from?". The simple answer
is that, hundreds of thousands of years ago, before humans, the animals and plants that died
accumulated on the bottom of water bodies, mixing with sand and mud. Sediment kept piling
over the top of that, and the heat and pressure eventually transformed into oil, petroleum or
natural gas. These are trapped in porous layers in the earth, prevented from escaping by a
non-porous layer of rock.

That's the leading scientific theory on that, in any case. And no one has the definite answer
on whether the world's oil reserves will, eventually, run out.

Right now, coal, oil and natural gas power the economies of the world; almost all modern
human endeavour produces carbon dioxide. This makes climate change extremely complex,
tied up in other difficult issues such as poverty, economic development and population
growth. Clearly, dealing with climate change is not easy. It is not about to get any easier. But
ignoring it would be worse.
How did we get here?
It’s a familiar story if you grew up reading Rachel Carson’s Silent Spring on the devastating
effects of DDT or lived under the widening hole in the ozone layer. You may have felt a
sense of déjà vu as the world woke up to an environmental problem - and came together to
take action.

Climatologists were the first to sound the alarm in the 1960s and 1970s. These scientists
noticed that concentrations of CO2 in the atmosphere were increasing, and that it was
correlated to a steady increase in global temperatures. Ice core research backed up this
observation, and anecdotal evidence - which had long been trickling in from scientists in
many disciplines, farmers and fishermen, as well as amateur nature observers and enthusiasts
— began to add up.

More than two decades after these first urgent calls, governments created the United Nations
Framework Convention on Climate Change. As far as international agreements went,
negotiation of the Convention was fast - especially one on such a vastly complex issue. It
was ready for signature at the Earth Summit (formally known as the 1992 United Nations
Conference on Environment and Development in Rio de Janeiro).

What led to the creation of the UNFCCC was the first assessment report of the
Intergovernmental Panel on Climate Change, released in 1990. The Panel was created by the
World Meteorological Organization and the United Nations Environment Programme in
1988, and this first report reflected the views of 400 scientists. Its primary message: global
warming was happening and something had to be done about it.

The most recent assessment report currently available is AR4, released in 2007. This is a
sample of the observations in AR4 that finally propelled climate change into popular
consciousness.

 Snow cover. Since 1978, annual average Arctic sea ice has shrunk, with larger and
larger decreases in summer observed each decade. Mountain glaciers and snow cover,
on average, have declined in both hemispheres.
 Rain and drought. Since the Industrial Revolution, there have been significant changes
in precipitation patterns globally - it now rains much more in eastern parts of North
and South America, northern Europe and northern and central Asia, but less in the
Sahel, Mediterranean, southern Africa and parts of southern Asia. Globally, the area
affected by drought is likely to have increased since the 1970s.
 A hotter world. Over the past 50 years, cold days, cold nights and frosts have become
less frequent over most land areas, and hot days and hot nights, more frequent.
 Extreme weather. An increase in intense tropical cyclone activity in the North Atlantic
has been observed since about 1970. Warm air is fuel for cyclones and hurricanes.
 The seasons. Spring events come earlier and plants and animals are moving upwards
 and polewards because of recent warming trends.
 Nature. Scientists have observed climate-induced changes in at least 420 physical
processes and biological species or communities.

The IPCC now has a well-established role. It reviews worldwide research, issues regular
assessment reports, and compiles special reports and technical papers. Its findings reflect
global scientific consensus and are apolitical in character, providing a crucial counterbalance
to the often highly charged political debate over how to respond to climate change. Its
assessment reports now reflect the work and observations of thousands of scientists.

IPCC reports are frequently used as the basis for decisions made under the Convention. They
played a major role in negotiations leading to the Kyoto Protocol.

Where are we going?

Scientists, economists, political scientists, financial experts and all manner of other
researchers use historical observations and known links to create models and project
outcomes. The IPCC collates published and reviewed science, including projections of what
is to come based on a scale of warming scenarios. These collective projections paint quite a
clear picture.

On a worldwide level:

 Agricultural yields are expected to drop in most tropical and sub-tropical regions (and
in temperate regions, too) if the temperature increase is more than a few degrees.
They will be affected, for example, by changing river flows (from ice pack behavior)
and rainfall patterns, to the changing behavior of pests, of friendly species required
for pollination and pest-control, of the effectiveness of herbicides.
 Diseases, especially those carried by vectors like mosquitoes, could spread to new
areas in the world. Imagine what happens when a disease is introduced to a
population with no previous contact and therefore little to no immunity to it. Many
mosquito species, such as those which carry malaria and dengue, survive and breed
more efficiently in hotter temperatures. Then there is increased risk of heatstroke and
food-related illnesses.
 Millions of people are expected to be exposed to increasing water stress as ice packs
that feed melt-water into rivers that keep millions of people alive, shrink
progressively over the decades; or pump extra water into the rivers in the summer,
causing damaging, unprecedented flooding.
 More intense weather-related disasters combine with rising sea levels and other
climate-related stresses to make the lives of those living on coastlines, particularly the
world’s poor, misery. Computer models predicting more “extreme weather events”
have in the last decade proven to be on target.
  Extinctions are expected from the current warming trends. Large numbers of plant and
animal species, already weakened by pollution and loss of habitat, probably will not
survive the next 100 years.

First steps to a safer future: Introducing The United Nations Framework Convention on
Climate Change

The UNFCCC entered into force on 21 March 1994. Today, it has near-universal
membership. The 195 countries that have ratified the Convention are called Parties to the
Convention.

The UNFCCC is a “Rio Convention”, one of three adopted at the “Rio Earth Summit” in
1992. Its sister Rio Conventions are the UN Convention on Biological Diversity and the
Convention to Combat Desertification. The three are intrinsically linked. It is in this context
that the Joint Liaison Group was set up to boost cooperation among the three Conventions,
with the ultimate aim of developing synergies in their activities on issues of mutual
concern. It now also incorporates the Ramsar Convention on Wetlands.

Preventing “dangerous” human interference with the climate system is the ultimate aim of
the UNFCCC.

First steps to a safer future: the Convention in summary

The Convention:

Recognized that there was a problem.

 This was remarkable for its time. Remember, in 1994, when the UNFCCC took
effect, there was less scientific evidence than there is now. The UNFCCC borrowed
a very important line from one of the most successful multilateral environmental
treaties in history (the Montreal Protocol, in 1987): it bound member states to act in
the interests of human safety even in the face of scientific uncertainty.

Related reading: Methods & Science

Sets a lofty but specific goal.

 The ultimate objective of the Convention is to stabilize greenhouse gas

 concentrations "at a level that would prevent dangerous anthropogenic (human
induced) interference with the climate system." It states that "such a level should be
achieved within a time-frame sufficient to allow ecosystems to adapt naturally to
climate change, to ensure that food production is not threatened, and to enable
economic development to proceed in a sustainable manner."

How do we know what is "dangerous anthropogenic interference"? See IPCC's 4th

Assessment Report
Puts the onus on developed countries to lead the way.

 The idea is that, as they are the source of most past and current greenhouse gas
emissions, industrialized countries are expected to do the most to cut emissions on
home ground. They are called Annex I countries and belong to the Organization for
Economic Cooperation and Development (OECD). They include 12 countries with
"economies in transition" from Central and Eastern Europe. Annex I countries were
expected by the year 2000 to reduce emissions to 1990 levels. Many of them have
taken strong action to do so, and some have already succeeded.

What compelled these countries to act? See The Kyoto Protocol

Directs new funds to climate change activities in developing countries.

 Industrialized nations agree under the Convention to support climate change

activities in developing countries by providing financial support for action on
climate change-- above and beyond any financial assistance they already provide to
these countries. A system of grants and loans has been set up through the
Convention and is managed by the Global Environment Facility. Industrialized
countries also agree to share technology with less-advanced nations.

Related reading: Cooperation & Support

Keeps tabs on the problem and what's being done about it.

 Industrialized countries (Annex I) have to report regularly on their climate change

policies and measures, including issues governed by the Kyoto Protocol (for
countries which have ratified it).

 They must also submit an annual inventory of their greenhouse gas emissions,
including data for their base year (1990)and all the years since.

 Developing countries (Non-Annex I Parties) report in more general terms on their

actions both to address climate change and to adapt to its impacts - but less
regularly than Annex I Parties do, and their reporting is contingent on their getting
 funding for the preparation of the reports, particularly in the case of the Least
Developed Countries.

You can find all Parties' submitted reports and the inventories of Annex I Parties
here: National Reports
Charts the beginnings of a path to strike a delicate balance.

 Economic development is particularly vital to the world's poorer countries. Such

progress is difficult to achieve even without the complications added by climate
change. The Convention takes this into consideration by accepting that the share of
greenhouse gas emissions produced by developing nations will grow in the coming
years. Nonetheless, in the interests of fulfilling its ultimate goal, it seeks to help
such countries limit emissions in ways that will not hinder their economic progress.
One such win-win solution was to emerge later, when the Kyoto Protocol to the
Convention was conceived.

Related reading: the Clean Development Mechanism of the Kyoto Protocol

Kicks off formal consideration of adaptation to climate change.

 The Convention acknowledges the vulnerability of all countries to the effects of

climate change and calls for special efforts to ease the consequences, especially in
developing countries which lack the resources to do so on their own. In the early
years of the Convention, adaptation received less attention than mitigation, as
Parties wanted more certainty on impacts of and vulnerability to climate change.
When IPCC's Third Assessment Report was released, adaptation gained traction,
and Parties agreed on a process to address adverse effects and to establish funding
arrangements for adaptation. Currently, work on adaptation takes place under
different Convention bodies. The Adaptation Committee, which Parties agreed to
set up under the Cancun Adaptation Framework as part of the Cancun Agreements,
is a major step towards a cohesive, Convention-based approach to adaptation.
KYOTO PROTOCOL

The Kyoto Protocol is an international agreement linked to the United Nations Framework
Convention on Climate Change, which commits its Parties by setting internationally binding
emission reduction targets.

Recognizing that developed countries are principally responsible for the current high levels of
GHG emissions in the atmosphere as a result of more than 150 years of industrial activity, the
Protocol places a heavier burden on developed nations under the principle of "common but
differentiated responsibilities."

The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force
on 16 February 2005. The detailed rules for the implementation of the Protocol were adopted at
COP 7 in Marrakesh, Morocco, in 2001, and are referred to as the "Marrakesh Accords." Its first
commitment period started in 2008 and ended in 2012.

In Doha, Qatar, on 8 December 2012, the "Doha Amendment to the Kyoto Protocol" was
adopted. The amendment includes:

 New commitments for Annex I Parties to the Kyoto Protocol who agreed to take on
commitments in a second commitment period from 1 January 2013 to 31 December
2020;

 A revised list of greenhouse gases (GHG) to be reported on by Parties in the second

commitment period; and

 Amendments to several articles of the Kyoto Protocol which specifically referenced

issues pertaining to the first commitment period and which needed to be updated for
the second commitment period.

On 21 December 2012, the amendment was circulated by the Secretary-General of the United
Nations, acting in his capacity as Depositary, to all Parties to the Kyoto Protocol in accordance
with Articles 20 and 21 of the Protocol.

During the first commitment period, 37 industrialized countries and the European Community
committed to reduce GHG emissions to an average of five percent against 1990 levels. During
the second commitment period, Parties committed to reduce GHG emissions by at least 18
percent below 1990 levels in the eight-year period from 2013 to 2020; however, the composition
of Parties in the second commitment period is different from the first.
Under the Protocol, countries must meet their targets primarily through national measures.
However, the Protocol also offers them an additional means to meet their targets by way of three
market-basedmechanisms.

The Kyoto mechanisms are:

 International Emissions Trading

 Clean Development Mechanism (CDM)

 Joint implementation (JI)

The mechanisms help to stimulate green investment and help Parties meet their emission targets
in a cost-effective way.

Monitoring emission targets

Under the Protocol, countries' actual emissions have to be monitored and precise records have to
be kept of the trades carried out.

Registry systems track and record transactions by Parties under the mechanisms. The UN
Climate Change Secretariat, based in Bonn, Germany, keeps an international transaction log to
verify that transactions are consistent with the rules of the Protocol.

Reporting is done by Parties by submitting annual emission inventories and national reports
under the Protocol at regular intervals.

A compliance system ensures that Parties are meeting their commitments and helps them to meet
their commitments if they have problems doing so.

Adaptation
The Kyoto Protocol, like the Convention, is also designed to assist countries in adapting to the
adverse effects of climate change. It facilitates the development and deployment of technologies
that can help increase resilience to the impacts of climate change.

The Adaptation Fund was established to finance adaptation projects and programmes in
developing countries that are Parties to the Kyoto Protocol. In the first commitment period, the
Fund was financed mainly with a share of proceeds from CDM project activities. In Doha, in
2012, it was decided that for the second commitment period, international emissions trading and
joint implementation would also provide the Adaptation Fund with a 2 percent share of proceeds.

The road ahead

The Kyoto Protocol is seen as an important first step towards a truly global emission reduction
regime that will stabilize GHG emissions, and can provide the architecture for the future
international agreement on climate change.

In Durban, the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) was
established to develop a protocol, another legal instrument or an agreed outcome with legal force
under the Convention, applicable to all Parties. The ADP is to complete its work as early as
possible, but no later than 2015, in order to adopt this protocol, legal instrument or agreed
outcome with legal force at the twenty-first session of the Conference of the Parties and for it to
come into effect and be implemented from 2020.

Targets for the first commitment period

The targets for the first commitment period of the Kyoto Protocol cover emissions of the six
maingreenhousegases,namely:
• Carbon dioxide (CO2);
• Methane (CH4);
• Nitrous oxide (N2O);
• Hydrofluorocarbons (HFCs);
• Perfluorocarbons (PFCs); and
• Sulphur hexafluoride (SF6)

The maximum amount of emissions (measured as the equivalent in carbon dioxide) that a Party
may emit over a commitment period in order to comply with its emissions target is known as a
Party’s assigned amount. The individual targets for Annex I Parties are listed in the Kyoto
Protocol's Annex B.

Countries included in Annex B to the Kyoto Protocol for the first commitment period and
their emissions targets

Target (1990** -
Country
2008/2012)

EU-15*, Bulgaria, Czech Republic, Estonia, Latvia,Liechtenstein,

-8%
Lithuania, Monaco, Romania,Slovakia,Slovenia, Switzerland

US*** -7%

Canada,**** Hungary, Japan, Poland -6%

Croatia -5%

New Zealand, Russian Federation, Ukraine 0

Norway +1%

Australia +8%
Iceland +10%

* The 15 States who were EU members in 1997 when the Kyoto Protocol was adopted, took on
that 8% target that will be redistributed among themselves, taking advantage of a scheme under
the Protocol known as a “bubble”, whereby countries have different individual targets, but which
combined make an overall target for that group of countries. The EU has already reached
agreement on how its targets will be redistributed.
** Some EITs have a baseline other than 1990.
*** The US has indicated its intention not to ratify the Kyoto Protocol.
**** On 15 December 2011, the Depositary received written notification of Canada's withdrawal
from the Kyoto Protocol. This action became effective for Canada on 15 December 2012.

Amendment to Annex B of the Kyoto Protocol

The Protocol mirrors the Convention in recognizing the specific needs and concerns of
developing countries, especially the most vulnerable among them. Annex I Parties must thus
provide information on how they are striving to meet their emissions targets while minimizing
adverse impacts on developing countries.

An Adaptation Fund was established to finance concrete adaptation projects and programmes in
developing countries that are Parties to the Kyoto Protocol. The Fund is financed with the share
of proceeds from clean development mechanism (CDM) project activities and other sources.

Prototype Carbon Fund (PCF)

Introduction
Climate change, and accompanying disrupted weather patterns—caused by the greenhouse effect
through atmospheric loading of greenhouse gases (carbon dioxide, methane, etc) could wreak
havoc on the planet, particularly large parts of the developing world. The cost-effective reduction
of greenhouse gas emission to avert the most severe impacts of climate change remains one of
the widely accepted priorities for global action.

Recognizing that climate change will have the most impact on its borrowing client countries, on
July 20th, 1999 the Executive Directors of the World Bank approved the establishment of the
Prototype Carbon Fund (PCF). The PCF, with the operational objective of combating climate
change, aspires to promote the Bank’s tenet of sustainable development, demonstrate the
possibilities of public/private partnerships, and offer a "learning-by-doing" opportunity to its
stakeholders.

PCF Operations

The PCF will pilot production of Emission Reductions within the framework of Joint
Implementation (JI) and the Clean Development Mechanism (CDM). The PCF will invest
contributions made by companies and governments in projects designed to produce Emission
Reductions fully consistent with the Kyoto Protocol and the emerging framework for JI and the
CDM. Contributors, or "Participants" in the PCF, will receive a pro rata share of the Emission
Reductions, verified and certified in accordance with agreements reached with the respective
countries "hosting" the projects.

PCF Strategic Objectives

From its inception, the PCF has followed three primary strategic objectives:

 High-Quality Emission Reductions: to show how project-based greenhouse gas

Emission Reduction transactions can promote and contribute to sustainable development
and lower the cost of compliance with Kyoto Protocol;
 Knowledge Dissemination: to provide the Parties to the UNFCCC, the private sector,
and other interested parties with an opportunity to "learn-by-doing" in the development of
policies, rules, and business processes for the achievement of Emission Reductions under
CDM and JI;
 Public-Private Partnerships: to demonstrate how the World Bank can work in
partnership with the public and private sectors to mobilize new resources for its
borrowing member countries while addressing global environmental problems through
market-based mechanisms.

Committed to Reduce Carbon

Companies can supplement their commitments at home by purchasing potentially lower-cost

emission reductions in developing countries and countries with economies in transition. As a
result, projects in these countries will get a new source of financing for sustainable development
in the energy, industrial and waste management sectors, land rehabilitation, and in the
introduction of clean and renewable technologies. Industrialized countries can meet part of their
Kyoto obligation, while the threat of climate change is reduced at a lower overall cost. The
Prototype Carbon Fund (PCF) was created as a response to the need to understand and test the
procedures for creating a market in project-based emission reductions under the Kyoto Protocol's
flexible mechanisms. The PCF has played a pioneering role in developing the market for
greenhouse gas emission reductions, while promoting sustainable development, and offering a
learning by doing opportunity to its stakeholders, and has paved the way for the additional
carbon funds established by the World Bank.