However, human activities have resulted in a steady increase in greenhouse gas concentration (for example, in 1750 the CO2 concentration was 275 part per million (ppm), and in 2000 the CO2 concentration was 370 ppm), and this raised the possibility that the earth would be heating up, and more than we would like. Scientific studies confirmed that this was happening, and indeed, that the climate was changing. The ways in which the climate changes are diverse - in some places the Earth gets colder, in other places it gets hotter, in some places wetter, in some places dryer, sometimes more variable, sometimes less variable. More predictable and less predictable. More or less extreme weather incidents. On average, the Earth is heating up: Since the end 1800s, the Earth average temperature increased by 0.6°C, and in the coming 100 years a further increase of between 1.4 to 5.8 °C is expected.

Weighing all the scientific evidence and after assessing the likely impacts of climate change, most of the nations decided to take actions and decided in 1992 to adopt the United Nations Framework Convention on Climate Change (UNFCCC). The UNFCCC is important for various reasons:

• It expresses the long-term goal of stabilizing the greenhouse gas concentrations at a level that prevents dangerous human-induced changes in the climate system.
• It established a framework for further discussions and decisionmaking on the basis of new evidence. Related to this, the UNFCCC encourages scientific research on climate change - forecasts, how to mitigate climate change, and how to adapt to it.
• The UNFCCC also encourages actions that reduce the emission of greenhouse gases, without making emission reductions binding.
• The UNFCCC recognizes that those countries most responsible for climate change are the ones that might be least affected by it, and that these countries with highest responsibility are the best able to take actions to reduce greenhouse gas emissions. Therefore, the UNFCCC recognizes the category Annex I countries (OECD countries and some of the former communist countries in Europe), and creates special obligations for them.
• It created an infrastructure for dealing with climate change - the secretariat of the UNFCC. One of the activities of the secretariat is maintaining a website: www.unfccc.int.

One thing the UNFCCC did not do - it did not specify binding emission reduction or limitation targets, just a soft target of returning, at the end of the decade, to earlier levels of greenhouse gas emissions. Binding obligations to reduce greenhouse gas emissions were only agreed during the third Conference of Parties in Kyoto, Japan: The Kyoto Protocol.

The Kyoto Protocol was adopted in December 1997 and includes binding emission reduction or

The Kyoto Protocol obliges countries that historically have had high emissions of greenhouse gases and that have a relatively high income (the so-called Annex I countries) to reduce emissions of 6 greenhouse gases:

• CO2 (carbondioxide - produced by the burning of fossil fuel and the cutting of forest, removed by growing forests)
• CH4 (methane - produced by anaerobic decomposition of organic wastes, by coal mining, and released by for example oil drilling)
• N2O (Nitrous oxide - for example, from the application of fertilizers)
• HFCs (Hydrofluorocarbons - this is a category of industrial gases used to replace CFCs, which the Montreal Protocol requires to be phased out)
• PFCs (Perfluorocarbons - this is a category of industrial gases used to replace CFCs)
• SF6 (Sulphur hexa fluoride - another industrial gas)

Each of these gases has a different impact on climate change. However, each can be 'converted' to a common unit, tons CO2 equivalent. Thus, 1 ton of CH4 is equivalent to 21 tons of CO2, 1 ton of N2O is equivalent to 310 tons of CO2, 1 ton of SF6 is equal to 3200 tons of CO2, 1 ton of HFCs ranges from 140 to 11700 tons of CO2, depending on the compound, and 1 ton PFCs is equivalent to 6500-9200 tons of CO2.

The GHG emission reductions from projects in countries like China - countries that ratified the Kyoto Protocol but do not have a binding obligation to reduce Greenhouse Gas (GHG) emissions - can be sold to countries with obligations to reduce GHG emissions. There are now many Buyers of GHG emission reductions, including governments, companies and multilateral funds.

The following steps are key. The order in which they are taken may differ.

1. Writing of Project Design Document (PDD). The first step is the writing of the Project Design Document. The PDD should follow an internationally agreed format, which can be downloaded from http://cdm.unfccc.int. It should use already existing approved baseline and monitoring methodologies, or it should develop new methodologies that subsequently would need to be approved by the Executive Board for CDM of the UNFCCC. For more information on methodologies, see http://cdm.unfccc.int/methodologies.
2. Obtain host government approval. CDM requires that the host country's government approve the project. For projects in China, this means that the Chinese government should approve the project.
3. Negotiate and Emission Reduction Purchase Agreement (ERPA). At some point, the project owner should get some payments for the greenhouse gas emission reductions. The project owner will need to identify buyers, and negotiate with the buyer(s) a purchase agreement for the emission reductions.
4. Validate the PDD. The internationally agreed rules of CDM require that an independent validator, a kind of carbon-auditor, check the Project Design Document.
5. Register the project with the UNFCCC. After success validation, the project can be registered with the UNFCCC as a CDM project.
6. Implement the project and generate emission reductions. After the successful registration, the project implementation can continue, and the project will generate emission reductions.
7. Verify emission reductions. An independent organization, the verifier, will verify that the emission reductions that are claimed have indeed been generated. The verifier will check that the monitoring of the emission reductions follows the 'monitoring and verification plan' in the Project Design Document.
8. Certification of emission reductions (CERs). After the verification, emission reductions can be certified. The result, certified emission reductions or CERs, are the product that is delivered through CDM.
9. The project owner delivers the CERs to buyer(s).
10. The buyer(s) pay(s) for the CERs.