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close this bookClimate, Biodiversity, and Forests - Issues and Opportunities Emerging from the Kyoto Protocol (WRI, 1998, 40 pages)
close this folderThe Treatment of Forests and Land-Use Change in Industrialized Countries
close this folderThe Treatment of Forests and Land-Use Change Under the Market Mechanisms for Reductions Between Developed Countries
View the document(introduction...)
View the documentProject-Based Credit Trading
View the documentEmissions Trading


The Protocol describes three distinct market mechanisms, two of which are reserved for Annex I parties-project-based credit trading and emissions trading. It is unclear what types of forest and land-use change projects will be eligible under any of these mechanisms.

If Annex I countries sell greenhouse gas reductions through emissions or project-based credit trading, the seller nation must exceed its emission reduction target by at least the amount sold. One project from the Activities Implemented Jointly (AIJ) pilot phase illustrates how these two mechanisms may operate. The United States and Russia are undertaking a reforestation project in Russia, RUSAFOR, and dividing the emission reductions evenly

The project is estimated to sequester approximately 29,000 tons of carbon over its lifetime, half of which, 14,500 tons of carbon, will be transferred to the United States from Russia.53 In order to do so, Russia's emissions reductions must exceed its commitment by the amount traded to the United States. Because rules and guidelines are not yet in place, it is unclear when Russia must show that it has met its commitments, or what sanctions will be in place if the seller country fails to meet its commitments.