The central feature of the Kyoto Protocol (66 kB)
is its requirement that countries limit or reduce their greenhouse gas emissions. By setting such targets,
emission reductions took on economic value. To help countries meet their emission targets, and to encourage
the private sector and developing countries to contribute to emission reduction efforts, negotiators of the
Protocol included three market-based mechanisms – Emissions Trading, the Clean Development Mechanism and
Joint Implementation.
Clean Development Mechanism
The CDM allows emission-reduction (or emission removal) projects in developing countries to earn certified emission
reduction (CER) credits, each equivalent to one tonne of CO2. These CERs can be traded and sold, and used by industrialized
countries to a meet a part of their emission reduction targets under the Kyoto Protocol.
The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries
some flexibility in how they meet their emission reduction limitation targets.
The projects must qualify through a rigorous and public registration and issuance process designed to ensure real,
measurable and verifiable emission reductions that are additional to what would have occurred without the project.
The mechanism is overseen by the CDM Executive Board, answerable ultimately to
the countries that have ratified the Kyoto Protocol.
Operational since the beginning of 2006, the mechanism has already registered more than 1,000 projects and is anticipated to produce
CERs amounting to more than 2.7 billion tonnes of CO2 equivalent in the first commitment period of the Kyoto Protocol, 2008–2012.
The mechanism is seen by many as a trailblazer. It is the first global, environmental investment and credit scheme of its kind,
providing a standardized emissions offset instrument, CERs.
Issues related to the CDM
The implications of the establishment of new hydrochlorofluorocarbon-22 (HCFC-22)more >>
Implications of possible changes to the limit established for small-scale afforestation and reforestation CDM project activitiesmore >>
Carbon dioxide Capture and Storage (CCS) as CDM project activities more >>
