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Emissions Regulation

The Paris Agreement (Accord de Paris) is a 2015 agreement between the 195 Member States of the United Nations Framework Convention on Climate Change (UNFCCC), with the aim of climate protection following the Kyoto Protocol.

Adopted by consensus 12 December 2015, the agreement was negotiated by representatives of 195 countries at the 21st Conference of the Parties of the UNFCCC. By December 2016, 194 UNFCCC members have signed the treaty, and 132 have ratified it. By October 2016, there were enough ratifications (accounting for 55% of global greenhouse gas emissions) for the agreement to come into force, which it did so on 4 November 2016.


Article 2 of the Agreement states the aims as enhancing the implementation of the UNFCCC through 3 means:

  1. Holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change;
  2. Increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production;
  3. Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.

Under the Clean Development Mechanism, emission-reduction projects in developing countries can earn certified emission reduction credits. These saleable credits can be used by industrialized countries to meet a part of their emission reduction targets under the Kyoto Protocol.

The purpose of the mechanism is to help developing countries - according to the definition of the United Nations Framework Convention on Climate Change (UNFCCC), which are countries not included in Annex I to the Climatic Convention - to achieve sustainable development and contribute to the prevention of dangerous climate change. At the same time, the mechanism is intended to assist the industrialized countries listed in Annex I to meet their quantified emission limitation and reduction commitments under Article 3 of the Kyoto Protocol.

Under this mechanism, emission reduction measures can be implemented in developing countries and these savings can be certified. The resulting CER (Certified Emission Reduction) certificates can be calculated for the reduction targets in industrialized countries.

An industrialized country subject to reduction obligations, which is listed in Annex B of the Kyoto Protocol, can generate CERs in a country which is not listed there by the implementation of emission reduction measures. A CER confirms a reduction in emissions by one tonne of CO2 equivalents. These CERs can then be included in the emission targets received. The basic idea of ​​the CDM is that it is often cheaper to reduce greenhouse gas emissions in developing countries than in industrialized countries. For example, the conversion of existing industries and infrastructures in the industrialized countries is more cost-intensive than the sustainable development of the (old technology) existing industries in the developing countries. The financial and technological investments by the Annex II countries are to promote the sustainable economic development of the host countries in the same way. The CDM should ultimately be a win-win situation for industrialized and developing countries. In the EU, the national reduction targets have largely been transferred to the main private sector. This is done through EU emissions trading (EU-ETS), which feeds to a large extent the demand for CERs. The transfer of obligations to the private sector has resulted in a number of regulated companies participating in the development of CDM projects.