At meetings in Bonn and Marrakech in 2001, the Conference of the Parties to the Framework Convention on Climate Change broke through an impasse on the detailed provisions needed to allow the Kyoto Protocol to enter into force. Key ingredients in the breakthrough included US withdrawal from the process, an effective relaxation of emissions targets for Japan, Canada, and Russia, and provision of access to unrestricted emissions trading. We analyze the costs of implementation and the environmental effectiveness of the Bonn-Marrakech agreement, and its effect on the relative roles of CO2 versus non-CO2 greenhouse gases. The ability of the major sellers of permits, notably Russia and Ukraine, to restrict access to permits, and the ability to trade across all greenhouse gases controlled under the Protocol, are both found to have a significant effect for both costs and effectiveness. Nevertheless, the current agreement requires reductions that do not constitute a significant step in accomplishing the long-term objectives of the Framework Convention. While the letter of the agreement does not require substantive action, individual nations have indicated an interest in actions that will affect the distribution of costs and could improve the environmental effectiveness of the agreement. The Bush administration proposal allows for emissions growth that exceeds even that found under the weakened Protocol, but is important for re-engaging the US and offering a possible approach for developing countries in future commitment periods. Finally, the potential for reconciling competing systems is explored. © 2002 Elsevier Science Ltd.