The article explores how rules and systems from international agreements like the Kyoto Protocol influence the carbon markets. It looks at how emissions trading worked in the first three years, especially in Europe where prices were unpredictable. The study focuses on the connections between the European market and Certified Emission Reductions (CERs) created by projects in developing nations under the Clean Development Mechanism (CDM). It discusses the successes of CDM but also its shortcomings. The research suggests there are challenges and possibilities ahead for these markets.