In the Kyoto Protocol to the UN Framework Convention on Climate Change, industrialized countries agreed on binding absolute targets for greenhouse gas emissions and on the admission of flexible market-economy instruments - such as emissions trading, joint implementation and the clean development...

A whole bundle of so-called "flexible mechanisms" has been foreseen by the Kyoto Protocol in order to help industrial countries to fulfil their agreed reduction targets in the most costeffective way. Emission permits will act as the backbone of all market-orientated mechanisms. Therefore, their...