Clean Development Mechanism

Clean Development Mechanism (CDM)

The Clean Development Mechanism (CDM) is a major component of the Kyoto Protocol (Article 12).

It allows a signatory country of the Kyoto Protocol that has signed up to an emission-reduction or emission-limitation commitment to implement an emission-reduction project in another, normally a 'developing' country.

The benefit of this is that the signatory country can earn saleable certified emission reduction (CER) credits, each equivalent to one tonne of CO2, which can be counted towards meeting Kyoto targets.

For further information refer to the UN's website http://cdm.unfccc.int/index.html

To be eligible, each Clean Development Mechanism project must account and deliver for emission reductions that are additional to what would otherwise have occurred. The projects must qualify through a rigorous and public registration, audit and issuance process. The approval can only be given by the Designated National Authorities.

The mechanism is overseen by the Clean Development Mechanism Executive Board which is answerable to the countries that have ratified the Kyoto Protocol.

The Clean Development Mechanism became operational in 2006 and is expected to produce CERs amounting to more than 2.9 billion tonnes of CO2 equivalent in the Kyoto Protocol's first budget period, 2008 to 2012.

The value of this approach is to enable industrialized countries some flexibility in how they meet their emission reduction or limitation targets, especially through export-led work such as a rural electrification project using solar panels or the installation of more energy-efficient boilers in a third world country.