What is the purpose of an Emission Reduction Unit (ERU) under the Kyoto Protocol?

The purpose of an Emission Reduction Unit (ERU) under the Kyoto Protocol is primarily to help countries meet their emissions reduction targets. ERUs are a type of market-based mechanism used within the framework of the Kyoto Protocol that allows countries with commitment obligations to achieve their targets more flexibly and cost-effectively.

ERUs are generated through projects that reduce emissions in countries with lower emissions or those that exceed a certain target. For instance, when a project successfully reduces greenhouse gas emissions, it creates ERUs that can be traded or used by other countries to offset their own emissions. This trading system is designed to encourage investment in emissions-reducing projects, thereby facilitating the overall goal of the Kyoto Protocol, which is to stabilize greenhouse gas concentrations in the atmosphere.

The correct answer highlights the central role of the ERU in emissions trading, contrasting with options focused on initiatives outside the trading framework, such as directly reducing energy consumption, providing subsidies, or penalizing companies for excessive emissions, which are not the primary objectives of ERUs.