Will Joint Implementation Survive International Emissions Trading? Distinguishing the Kyoto Mechanisms

The Kyoto Protocol stipulates that industrialised countries and countries with economies in transition, i.e. the group of Annex I countries, shall reduce their overall emissions of carbon dioxide and other five greenhouse gases by at least 5% as compared to their 1990 emission levels. This should be achieved by the first commitment period 2008 - 2012. In order to meet these targets cost-effectively, at an international level the Kyoto Protocol allows the use of the market-based Kyoto Mechanisms Joint Implementation, Clean Development Mechanism and International Emissions Trading. What strikes at first glance is that the Kyoto Protocol provides for two forms of international mitigation activities among Annex I countries, i.e. Joint Implementation and International Emissions Trading. Against this background, this paper analyses how Joint Implementation and International Emissions Trading might be distinguished and how they relate to each other. Based on this discussion, the paper explores moreover how the Clean Development Mechanism could be interpreted from an economic perspective. A clear understanding of distinctions of and interrelations between the Kyoto Mechanisms is important for both further research, and implementation and design efforts in practice