Global compliance reduction targets for emitters of GHGs in developed countries can be met by corresponding reductions in developing nations where the cost of implementation is significantly lower or in other developed nations where circumstances for implementation may be more favourable..

The Carbon Markets have developed in response to global supply and demand, to facilitate this exchange of investment and emission abatement.

The Kyoto Protocol set the first international GHG reduction targets in 1997 and established flexible mechanisms creating the market-based solution to aid the participation of all, including:

To aid the commoditisation of emissions reductions, all GHGs are measured in their impact on global warming in comparison to the impact of Carbon Dioxide (CO₂)

One ton of carbon dioxide equivalent
(tCO₂e)
forms the basis of a tradeable carbon credit which currently exists in the following formats:

Certified Emission Reductions (CER)
created by registered CDM projects

Emission Reduction Unit (ERU)
generated by registered JI projects.

European Allowance (EUA)
allowance unit issued to installations covered by the European Union Emissions Trading Scheme (EU ETS)