In 1998, Dr. James Hansen, director of NASA's Goddard Institute of SpaceStudies, testified before the United States Congress that "the greenhouse effect has been detected and is now changing the our climate". His statements made international headlines and led to greater public awareness of climate change, making it a salient issue for the general public. In response to public concerns and what climate scientists have known for years, the United Nations and other international bodies have established policies to limit greenhouse gas emissions. International agreements established by the United Nations Kyoto Protocol and the European Union Emissions Trading Scheme (EUETS) have attempted to provide monetary incentives to reduce greenhouse gas emissions through the establishment of carbon credit programs and artificial markets of carbon exchange. Under the Kyoto Protocol, countries are given carbon credits to emit specific amounts of greenhouse gases based on previous emission levels. Nations that split credits between their emitters and deficit industries can purchase surplus credits to ensure they meet their emissions requirements. Through the supply and demand of credit, a monetary value is established for carbon pollution. This cost will, in principle, motivate polluters to develop technologies and change practices to limit carbon emissions. However, many critics of the policy deem it ineffective and say “nothing more than a reorganization of society and technology that will leave most remaining fossil fuels safely in the ground.” [Lohmann, 2006] Industries that are most dependent on fossil fuels and that contribute most to global warming will require the most costly long-term structural changes, and are therefore left...... middle of paper.... ..from instability because the supply of carbon credits is highly inelastic.[ Nordhaus, 2007 ] As demonstrated by William Nordhaus in his 2007 article on carbon taxation, a HICT is “more easily and flexibly integrating economic costs and benefits of emissions reductions, while the Kyoto Protocol approach has no obvious link to final environmental or economic objectives”. Revenue from the tax can allow the government to invest in large-scale clean energy projects and invest in green technologies. It is clear from the failures of the CDM that industry cannot be responsible for investing in these tasks. The harmonized fiscal solution, unlike the placebo policies of the Kyoto Protocol, addresses the main cause of global warming by providing stable monetary incentives for emissions reductions and will provide governments with the resources needed to finance clean energy reform.