The Kyoto Protocol, if it enters into force, would establish emission limitation commitments for the developed countries and a full international emissions trading system for greenhouse gases. This has forced each nation to give the emissions trading consideration and prepare its domestic climate policies. Domestic greenhouse gas (GHG) emissions trading systems (ETS) are already being in operation in UK and Denmark, and European Union has decided to introduce compulsory domestic GHG emissions trading from year 2005. Other non-European developed countries such as Japan and Canada are actively considering the introduction of domestic ETS. In the United States, even though it is still refusing to ratify the Protocol, many states are implementing or considering programs that would limit GHG emissions and a growing number of major companies are undertaking significant efforts to address climate change including participating in emissions trading. The United States Congress tries to establish the compulsory reduction target and a nation-wide ETS combined with its traditional climate policy.



This study analyzed the results of recent international climate change negotiations related to the credit transaction of Clean Development Mechanism and Joint Implementation, and the international GHG ETS which was stated in the Kyoto Protocol. This study also provides an overview of the UK emissions trading scheme, describing its main elements and limitations and difficulties associated with the scheme. The major elements of the EU Emissions Trading Scheme, which begins in 2