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and all participants have an economic incentive to improve their
energy efficiency.
Developing countries are at this time exempt from greenhouse gas
emissions reductions because they have historically contributed a very
small share of emissions. In addition, their per capita emissions are
still relatively low, and they still have significant social needs. None-
theless, Kyoto requires that developed nations assist developing ones
by paying for and providing technology for climate- related studies and
projects. Countries are also rewarded credits for protecting forests and
other carbon dioxide sinks.
Unfortunately, Kyoto has many flaws, the most glaring being the
countries that are not bound by it. The United States, which produced
21% of the total greenhouse gas emissions in 2000 and would have a
cap of 7% below 1990 emissions, refused to sign because politicians
feared that emissions restrictions would slow down the nation’s eco-
nomic growth. Although the nation engages in voluntary cutbacks,
by 2005 greenhouse gas emissions of the United States were 19%
Cap- and- Trade Programs
Cap- and- trade programs are a popular,
market- based approach for encouraging
entities such as businesses, cities, or coun-
tries to reduce emissions. A neutral body
sets an emissions cap for each program
participant, usually based on the partici-
pant’s past emissions. In most programs,
the allowances can be used, traded to
another participant, or banked for future
use. Because allowances can be traded
for cash, participants have a monetary
incentive for developing emissions- saving
technologies. If a participant exceeds its
total allowances, it may be fined. In many
programs, the emissions cap lessens over
time until a permanent cap is reached.
A cap-and-trade program for sulfur oxide
(SO
2
) emissions has been extremely suc-
cessful in reducing this acid rain– causing
pollutant in the United States. When the
permanent cap is reached, in 2010, emis-
sions will be approximately 50% below
1980 levels. Cap- and- trade systems have
been proposed for wider adoption for deal-
ing with other pollution problems. However,
some extremely toxic pollutants that might
concentrate in a single area, such as mer-
cury, are not well suited for such plans.
Human Response