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The 1997 Kyoto Protocol outlined an architecture for international action to cope with climate risk. The framework combines greenhouse-gas emission targets that are legally binding on individual countries and a mechanism for trading these quotas. We use a canonical model to study the economics of emission permit markets applied to greenhouse gases. We stress that in this case, in the absence of a higher authority, the quota market needs to be set up through negotiations between countries. Using the model as a benchmark, we review the issues currently under discussion regarding changes in the United Nations Framework Convention on Climate Change (UNFCCC).