Clean Development Mechanism (CDM)

The CDM allows emission-reduction (or emission removal) projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one ton of CO2. The mechanism is seen by many as a trailblazer as it is the first global, environmental investment and credit scheme of its kind, providing a standardized emissions offset instrument, CERs. These CERs can be traded and sold, and used by industrialized countries to meet a part of their emission reduction targets under the Kyoto Protocol. 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 and answerable ultimately to the countries that have ratified the Kyoto Protocol. In order to be considered for registration, a project must first be approved by the Designated National Authorities (DNA). As of March 2010, there has been over 2,100 registered projects in about 60 countries with continued growth in 2009. Ultimately, CDM is anticipated to produce CERs amounting to more than 2.9 billion tons of CO2 equivalent in the first commitment period of the Kyoto Protocol, 2008–2012.