Much progress has been made by scientists and economists in understanding the science, technologies, and policies involved in climate change and reducing emissions. Notwithstanding this progress, it has up to now proven difficult to induce countries to join in an international agreement with significant reductions in emissions. The Kyoto Protocol was an ambitious attempt to construct an international climate change agreement to harmonize the policies of different countries. High-income countries agreed to limit their emissions to 5% below 1990 levels for the 2008-2012 budget period. Under the protocol, important institutional features were established, such as reporting requirements and methods for calculating the relative importance of different greenhouse gases. The most important innovation was an international cap-and-trade system for emissions as a means of harmonizing policies among countries through equalizing the market price of carbon dioxide (CO_2) emissions.
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