The Kyoto Protocol is best regarded as a rather small first step towards controlling the enhanced Greenhouse Effect and preventing human induced climate change. As such the targets have been extremely minimal compared to the 80 percent emissions reductions on 1990 levels stated as needed by 2050 to stabilise atmospheric concentrations in order to stand a chance of avoiding temperature rises above 2oC (Parry et al., 2008). The agreement, ratified in 2001, requires an average 5 percent reduction in carbon dioxide (CO2)-equivalent emissions from 1990 levels by 2008-2012, for a limited range of industrialised countries. Various options and variable targets mean even high per capita emitters need not actually reduce their emissions. For example, Australia, as the highest per capita source of carbon dioxide emission,11990 levels control for minimal reductions, rather than effective means for meeting a set of targets necessary to minimise human enhancement of the Greenhouse Effect. As will be shown, Kyoto’s targets have been framed as part of an economic discourse where priority is given to creating gains from trade, extending the role of markets and protecting the profits of potentially vulnerable polluters. In this debate economic efficiency has been used as an argument favouring the trading of pollution permits. The rhetoric of textbook theory has then been adopted as the grounds for creating new multi-billion dollar international carbon markets. The divorce between the assumptions of economic theory and complex reality has been neglected. Controlling Greenhouse Gas (GHG) emissions involves, amongst other things, understanding the science and its limits, regulating powerful vested interest groups, and addressing the psychological and ethical motives for human motivation. In contrast to orthodox economics, this paper explores these issues and explains regulatory instrument choice, design and implementationis actually committed by Kyoto to increasing emissions by 8 percent over Interestingly then much attention has been focussed upon the efficient means of as integrally entwined with issues of power. Indeed the importance of addressing the topic from a political economy and public policy perspective is clear from the history behind the development of carbon markets.