Explanation:

Three market-based mechanisms set up under Kyoto Protocol:
CDM allows an industrialized/developed country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol (called as Annex I Party or Annex B Party of the original Kyoto Protocol signed in 1997) to implement an emission-reduction project in any of those developing countries (which may otherwise be not financially capable of undertaking such projects), thereby earning them tradable Certified Emission Reduction (CER) credits, each equivalent to one tonne of CO2. The saleable CERs earned from such projects can be counted towards meeting the prescribed Kyoto targets.

Joint Implementation and  Emissions trading or commonly called as carbon trading [which provides for trading of (a) spare emission units available with any entity (savings from the assigned or permissible emission levels), (b) CERs created from CDM activities, (c) an emission reduction unit (ERU) generated by a Joint Implementation project and (d) removal units (RMU) created on the basis of land use, land-use change and forestry (LULUCF) activities such as reforestation]