Environment and climate change

The international political response to environmental degradation process began in 1992 with the United Nations Framework Convention on Climate Change (UNFCCC).

The Kyoto Protocol, adopted in 1997 by over 170 countries, reinforced the UNFCCC by committing many industrialized countries and economies in transition.

It established three innovative mechanisms, seeking to stimulate the private sector to reduce emissions efficiently and competitively.

• Clean Development Mechanism (CDM): it covers emissions reduction projects in countries located primarily in the developing world, generating so-called CERs.

• Joint Implementation (JI): it includes the emission reduction from projects located in countries in transition, generating ERUs (Emission Reduction Units).

• Emissions trading: it refers to the trade of surplus on emissions quotas allowed among countries in Annex I.

Kyoto market works in parallel to the so-called Voluntary Carbon Asset Market, which is organized from the strong running start gotten by corporate social and environmental responsibility strategies in recent years. Its active marketing is emission reduction credits, known as "Verified Emissions Reductions."

The increased development of the carbon market schemes in new jurisdictions, with two of the world's biggest emitters (China and the United States) as home of carbon pricing instruments, strengthens the potential of these markets and shows a promising future despite of all its ups and downs.

Linking the interest and concern for the environment to its entrepreneurial capacity in the business world, Foresight 2020 decided to become an active player in the carbon market, internalizing the environmental variable in the core business of several Latin American companies through market mechanisms as the regulated scheme and voluntary carbon markets scheme.

 

National, sub-national and regional emissions trading schemes: Proportion of global emissions covered