**GAO-09-151**                      Published: Nov 18, 2008. Publicly Released: Dec 02, 2008.                  

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## Highlights

International policies to address climate change have largely relied on market-based programs; for example, under the European Union's Emissions Trading Scheme (ETS) phase I (2005 to 2007) carbon dioxide emissions reductions were sought by setting a cap on each member state's allowable emissions and distributing tradable allowances to covered entities, such as power plants. Beginning operation in 2002, the Kyoto Protocol's Clean Development Mechanism (CDM) has relied on offsets, allowing certain industrialized nations to pay for emission reduction projects in developing countries--where the cost of abatement may be less expensive--in addition to reducing emissions within their borders. Legislative proposals to limit greenhouse gas emissions are under consideration in the United States. In this context, GAO was asked to examine the effects of and lessons learned from (1) the ETS phase I and (2) the CDM. GAO worked with the National Academy of Sciences to identify experts in market-based programs and gathered their opinions through a questionnaire, interviewed stakeholders, and reviewed available information.

## Recommendations

## Matter for Congressional Consideration

See All 6 Recommendations

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## Topics

Natural Resources and Environment

Air pollutionAir pollution controlAllowancesCarbon dioxideClimateClimate changeCongressional oversightData collectionData integrityDecision makingDeveloping countriesEmissions tradingIndustrial pollutionLessons learnedPollution controlPollution monitoringProgram evaluationProgram managementProposed legislationProtocolsTechnology