All the same I expect Bolivia or whomever to be suddenly offered big bucks/yen to save trees.

And correct me if I'm wrong, but aren't those selling the credits responsible for ensuring they're real, not the buyers?

Japan... Hypocrites.

Nice broad brush there.

At least we have the targets. If we had no targets and just sailed on blythly, we would be in an even worse pickle than we are currently.
The trick is to get the CO2 down without wrecking the world (and local) economies.

Sid -

there may be a cultural difference here. Anglo-Saxons tend to think of international treaties as law that are to be obeyed. If it looks as though that will not be possible, they don't sign up to them in the first place.

Much of the rest of the world tends to interpret such treaties - except for outright prohibitions - as formal declarations of sincere intent, to be lived up to as well as possible. Failure is not so much a crime as an embarrassment. Clearly, Kyoto almost certainly will not prove sufficient to produce the desired result. Perhaps it really just shows how immature the concept of a market in emissions still is. In particular, handing out certificates free of charge to existing industries was politically expedient but has led to low prices and hence, little effect. Personally, I've always considered emissions certificates the modern-day equivalent of medieval indulgences, a moral hazard best avoided altogether.

If we decide we really want to curb GHG emissions substantially, it must become gradually, predictably and irreversibly more expensive to produce them - preferably via straightforward taxes at the national level. Of course, increasing the burden related to asset degradation is only possible if you simultaneously cut taxes on wealth generation (aka income). The point is not to tax more heavily but to do so according to a new philosophy. Unfortunately and regardless of the mechanism, once GHG emissions start costing serious money, there will also be a strong temptation to commit fraud. Law enforcement and the criminal justice system will need new tools to deal with that.

Countries that refuse to participate at all should suffer second-class terms of trade, e.g. revocation of MFN status in the US. There can be no free riders on this global environmental issue, though clearly there is great scope for discussion about the fair distribution of the burden.

Perhaps the US and Australia are smarter than they are given credit for, in not ratifying the Kyoto agreement, as this agreement is appearing to be unattainable. The US and Australia are making some small strides in improving quality, but its a major undertaking. Dont need an agreement to achieve that.

I also dont understand how companies that are purchasing emission credits, to be able to reach unattainable emission goals, are going to make the air, our air, any cleaner. All it does is shift/dilute blame to someone who is less liable to blame. The air still stays the same.........

Meanwhile China will pass the US in CO2 emissions a decade ahead of schedule, in 2009.

http://www.nytimes.com/2006/11/07/business/worldbusiness/07pollute.html

Andrey:

Did you know that 47% of Canada's GHG growth come from Alberta + Sask Oil - Tar Sands - Natural gas direct and indirect activities, to produce oil and gas for export?

Ontario, with numerous older coal fired power plants, is responsible for almost 1/3 the GHG growth. The solution is more nuclear plants, more wind power, convert coal to natural gas, purchase hydro power from neighbours + an effective energy conservation program?

Without addressing those two majors GHG sources, Canada will never come close to Kyoto's commitments. Meanwhile, our current PM runs away from international environmental meetings..