UNFCCC
Countries have met under the UN Framework Convention on Climate Change (UNFCCC) every year since 1992, where nations promised to cut emissions. The summit is normally held over two weeks with ministers attending for the final two days. However, this year’s meeting will be the first where most world leaders will attend.

Kyoto
Following a failure to cut emissions under the UNFCCC, some countries pledged in 1997 to be legally bound to cut emissions of six greenhouse gases under the Kyoto protocol. The treaty classified all countries in the world as either those with an absolute cap on emissions (Annex B) and those without (non-Annex B). It also established three market mechanisms to help cut emissions at the lowest cost. These were: government trade in emissions rights between Annex B countries; a mechanism to generate carbon credits from emission reduction projects in non-Annex B countries (under the clean development mechanism) and a mechanism to allow credits to be generated from reductions made in Annex B nations (joint implementation).

The Copenhagen Accord
At the December 2009 Copenhagen Summit, the heads of state of Brazil, China, India, South Africa and the US struck a deal that aims to limit temperature growth to 2C from pre-industrial levels by 2050. Another 20 countries backed the deal with more expected to follow. However, the accord did not set specified targets or actions for anyone, and was not adopted by the UN. Instead it will be brought into the negotiations set to take place in 2010. But while the outcome of talks is uncertain, it appears the market mechanisms will face changes under a new treaty.

CDM
Since 2005 the clean development mechanism has been successful in generating carbon credits on a wide scale. However, the environmental integrity of the scheme has been called into question, with green groups and some voices in the US criticising the scheme for awarding credits to emission reduction projects that would have happened anyway.

JI
JI struggles to generate many credits. Russia, potentially the largest supplier of carbon credits, has yet to approve a single project due to bureauctratic infighting, while Ukraine has generated only a handful of credits so far.

AAU
Trade in government emission rights, known as assigned amount units (AAUs) has been heavily criticised by green groups, who claim that many countries' surplus rights have emerged as a result of a collapse in their economies as opposed to any environmental policy. Trade has also been tainted by allegations of corruption and ministers in at least two countries have been forced to resign over deals. But despite the oversupply of AAUs following the US withdrawal, very few deals have been done.

Market reform
The private sector has slammed the CDM for taking too long to approve projects and issue credits, claiming that the bureaucracy is deterring private sector investment. This has spurred talks over reforming the scheme to be more streamlined, as well as prompted proposals for new, more simplified markets. Much of the private sector is also against banking AAUs as the size of the surplus may devalue carbon prices and deter future investment.

Options
Several new markets and a streamlined CDM could emerge from Copenhagen. CDM could be reformed so some project types would automatically qualify, while the process of generating credits could be made easier. New markets could see credits issued for emission cuts made in certain sectors, while some poor countries may be incentivised for cutting emissions through national plans to cut emissions.