The Kyoto Protocol defines three mechanisms to assist Annex I Parties in meeting their emission targets.
"Joint implementation" (Article 6) allows Annex I Parties to implement projects that reduce greenhouse gas emissions by sources, or enhance removals by "sinks", in the territories of other Annex I Parties, and to credit the resulting "emission reduction units" against their own emission targets. (The term "joint implementation" does not appear in Article 6, but it has entered into common usage as convenient shorthand).
The clean development mechanism (CDM) defined in Article 12 allows Annex I Parties to implement projects that reduce greenhouse gas emissions in non-Annex I Parties and has the additional goal of assisting non-Annex I Parties in achieving sustainable development and contributing to the ultimate objective of the Convention. Under the CDM, Annex I Parties may use "certified emission reductions" generated by project activities in non-Annex I Parties to contribute to compliance with their emission commitments. The CDM will be supervised by an executive board, and a "share of the proceeds" from project activities will be used to assist particularly vulnerable developing countries in meeting the costs of adaptation.
Emissions trading, as set out in Article 17, permits an Annex I Party to transfer part of its "assigned amount" (the amount of emissions the Party may emit during the commitment period) to another Annex I Party.
At COP 4, Parties agreed on a work programme to elaborate principles, modalities, rules and guidelines on all three mechanisms (with priority to be given to the CDM), with a view to taking decisions on these at COP 6 (see decision 7/CP.4).
Negotiations on the mechanisms have been conducted jointly by both subsidiary bodies. In addition, as part of the work programme agreed at COP 4, two technical workshops were held in Bonn in April 1999. Informal consultations were also convened in Kuala Lumpur in March 2000 and in Bonn in August 2000.