Nearly two years after Kyoto, most OECD countries are looking towards ratification and implementation of their obligations under the Kyoto Protocol. What do historical emissions and policy trends tell us about the way forward? Which policies will be needed to combat climate change?

This book provides an overview of recent developments in OECD countries and a framework for policy making in the context of Kyoto targets. There is no single formula for domestic policies to mitigate greenhouse gas emissions. Every country will need to assess opportunities and constraints to develop a strategy adapted to their own situation. Yet, it is possible to outline some main lines for action in OECD countries at the national level. National strategies should prioritise market, subsidy and fiscal reform policies to establish conditions for competitive markets and remove distortions that harm the environment. And governments should implement a comprehensive mix of mutually reinforcing and integrated policies, using a wide range of economic instruments (green taxes, green tax reform and domestic emission trading) as well as other measures such as product policies, voluntary approaches and public awareness programmes. Unless OECD countries establish more effective frameworks for action now, achieving the Kyoto targets is likely to be costly and difficult.