The Kyoto protocol provides that industrialised countries can agree to invest in carbon efficient projects in each other's territory.

The first such deal, post-Kyoto, has been struck between two most likely partners: Russia and Japan. Japan has to meet a difficult target of six per cent cut from 1990 levels. Russia can easily meet its target of zero per cent rise in emissions because of the shutdown of inefficient industries due to economic crisis.

Under the agreement Japanese companies would invest in 20 Russian power plants and industries to cut greenhouse gas emissions. These reductions of Russian emissions would be added to the Japanese carbon dioxide balance sheet. Japan's trade ministry has allocated nearly US $20 million in the current annual budget to help Japanese firms to carry out feasibility studies for possible joint implementation in foreign countries.