UNFCCC Executive Secretary Yvo de Boer said in Bali yesterday that industrialized countries must continue to take the lead and must reduce their emissions by 25-40% by 2020.

"what is clear to everyone is that industrialized countries must continue to take the lead and must reduce their emissions by 25-40% by 2020. That is the agreed range for industrialized countries," he said at a daily press briefing for the ongoing United Nations Climate Change Conference in Bali.

He explained that in order to reach these ambitious targets, it is important in future negotiations to focus on the toolbox required to forge international cooperation and create the necessary market mechanisms.

The Kyoto Protocol, by putting a price on carbon, has created a "unique environmental commodity on the international market," he said. The Protocol has developed three innovative mechanisms which give Parties a certain degree of flexibility in meeting their emission reduction targets.

Emissions trading - known as the carbon market - is "truly global and growing," he said, amounting to US$30 billion in 2006 and expected to be much higher this year. The International Transaction Log (ITL), the computer trading system which allows Parties to trade emission reduction rights among each other, was launched recently by the UNFCCC Secretariat, thereby rendering the market internationally operational from a technical point of view.

The Clean Development Mechanism (CDM) and Joint Implementation (JI) are the two project-based mechanisms of the Kyoto Protocol. All three mechanisms, said Mr. de Boer, play an important part in the international response to climate change by stimulating investments in innovative technology and encouraging public-private partnerships in efforts to achieve clean energy growth in developing countries.

Of particular interest to developing countries are the ongoing discussions on technology transfer. Mr. de Boer explained that he was encouraged to see not only governments, but also the private sector engaging in the technology debate and offering solutions on the way forward.

He referred to a new publication by the World Business Council for Sustainable Development (WBCSD) which discusses technological solutions for a clean future and the action governments need to take to enable the private sector "to go that extra green mile".

In connection with the recent reports by the Intergovernmental Panel on Climate change (IPCC), which have been crucial in setting the scene for the Bali conference, Mr. de Boer mentioned a suggestion that the IPCC should be asked to update these reports in 2009, coinciding with the time negotiations on the future are expected to be completed.

Mr. de Boer described information received earlier from Washington that the US Senate and Environment and Public Works Committee had approved America's Climate Security Act setting mandatory cuts on power plants, industry and transportation as "encouraging news".

The UN climate change conference opened in Bali on Monday and marathon discussions are underway for an international climate change regime after the first phase of implementation for the 1997 Kyoto Protocol expires in 2012.