The Kyoto Protocol is an international agreement created by the United Nations. Its goal is for developed countries to reduce greenhouse gas emissions by an average of 5.2% below 1990 levels, by 2012. As of August 30, 2002, 89 countries have ratified the Protocol. This includes 18 developed countries that account for 25% of the world's greenhouse emissions. India, China, and Mexico do not have to make emission reductions because they are developing countries. These countries along with the United States produce 60% of global greenhouse gas emissions. .
There will be many impacts to many countries in the world if the Kyoto Protocol is approved. One country that will have various effects will be Canada. Despite being a small contributor (2%), Canada will pay heavily because of its fossil fuel, natural resource production. Estimates suggest the economic risk to Canada will be four times that of the European Economic Community and 10 times that of Japan. Reports suggest that 450,000 jobs could be lost if it is approved, incomes taxes could rise substantially, electricity costs could increase by 100%, natural gas prices could go up by 60%, gasoline could reach $1.10 per liter. .
Other problems affecting Canada would be the following. Their Industry will have to modify technologies, resulting in higher product prices. Petroleum producers and other industries will have to purchase credits from countries not using their allotment. $2 to $6 billion dollars worth of credits may have to be purchased each year, with costs ultimately passed on to consumers; money spent on credits would leave Canada. Resources and products would become less competitive in global markets. Industries that consume large amounts of energy would face rising prices. Emission targets could make oil sands projects uneconomical to continue. Investors would favor countries that do not have the extra costs associated with the Protocol, and jobs would be lost because of the difficulty of remaining competitive with the U.