The importance of energy in the organization of society and economic performance is difficult to estimate. Practically all human activity consists of transforming one form of energy into another, as it is well defined by the first law of thermodynamics, and there is no way of production –and there has never been– that does not depend on the price and the characteristics of energy supply.       

A global expanding economy that records the arrival of new important players at the forefront of the world production system –such as China and India– presents renewed pressures on the structure and dynamism of its energy equation due to the constant increases in demand and to the evolution of reserves of the different types of fossil fuels. Moreover, their geographical concentration within a few regions of the planet –mainly in the case of oil reserves– causes deep concern.

On the other hand, a growing number of experts relate the current typical consumption of energy to the strong process of deterioration of the environment, generating justified concern for the long-term sustainability of the world production matrix for goods and services.

The international political response to the process of deterioration of the environment began in 1992 with the United Nations Framework Convention on Climate Change (UNFCCC). This convention was designed to sensitize public opinion and raise awareness about the challenges and barriers that stem form the climate change mitigation. Moreover, the UNFCCC sets out a framework for action aimed at stabilizing atmospheric concentrations of greenhouse gases to prevent dangerous human interference with the climate system.

The Kyoto Protocol, adopted in 1997 by more than 170 countries, significantly strengthened the UNFCCC by committing many industrialized countries and economies in transition, the so-called ’Annex 1 countries’, with individual, legally-binding targets to limit or reduce their overall emissions of greenhouse gases by at least 5% below the 1990 levels of emission during the period 2008-2012. In turn, in order to lower the overall costs of achieving emissions targets, the Kyoto Protocol established the following three innovative “Flexibility Mechanisms”:

·    Clean Development Mechanism (CDM): consists of emission reduction projects located predominantly in emerging countries. These projects generate Certified Emission Reductions (CERs).

·    Joint Implementation (JI): includes emission reduction projects located in Annex I countries, which generate Emission Reduction Units (ERUs).

·    Emission Trading (ET): consists of the trading of “surplus” allowances among Annex I countries.

Although United  States has not ratified the Kyoto Protocol, many American organizations have adopted a proactive stance with regard to climate change measures. This has led to the emergence of a Non-Kyoto or Voluntary Market that operates in parallel with the Kyoto Market. Within this market, the emission-reduction credits traded are known as Verified Emission Reductions (VERs), since they are not related to compliance with the Kyoto Protocol or other regulatory mandates.

These two important vectors –the relative virtual scarcity of fossil fuels and the environmental problems– represent a major source of technological innovations and of development of new potential products, as evidenced by the new techniques for the extraction of fossil fuels, the development of new energy storage and transportation mechanisms (such as the hydrogen cell) and the development of technologies aimed at the production of the so-called “renewable energies”.