In 1992 over 180 countries at the "Earth Summit" in Rio de Janeiro adopted the United Nations Framework Convention on Climate Change (UNFCCC). The UNFCCC is a legal framework that enables Parties to the Convention to start the process of stabilizing greenhouse gases (GHG) in the atmosphere.

Parties to the UNFCCC have been meeting every year since 1994 to implement and define this framework. At the third meeting of the Parties, COP 3, the Kyoto Protocol was adopted and set legally binding GHG reductions for industrialized countries, or so called Annex I Parties.

The Kyoto Protocol enters into force when at least 55 countries ratify the treaty and these countries represent at least 55% of the Annex I countries' 1990 emissions levels.

In time for the first compliance period (2008- 2012), Annex I Parties will have to encourage or regulate private companies and individuals to reduce GHG emissions. Most of these reductions will occur within the borders of each Annex I country, but the Kyoto Protocol identifies mechanisms by which credit can be received for GHG reduction projects in non-Annex I countries.