Clean Development Mechanism
The Clean Development Mechanism (CDM) is an arrangement under the Kyoto Protocol allowing industrialised countries with a greenhouse gas reduction commitment (called Annex 1 countries) to invest in projects that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries. A crucial feature of an approved CDM carbon project is that it has established that the planned reductions would not occur without the additional incentive provided by emission reductions credits, a concept known as "additionality".
Distribution of CDM emission reductions, by country.
The CDM allows net global greenhouse gas emissions to be reduced at a much lower global cost by financing emissions reduction projects in developing countries where costs are lower than in industrialized countries. However, critics argue that by allowing "business as usual" projects some emission reductions under the CDM are false or exaggerated, and in early 2007 the CDM was accused of paying €4.6 billion for projects that would have cost only €100 million if funded by development agencies (see discussion below).
The CDM is supervised by the CDM Executive Board (CDM EB) and is under the guidance of the Conference of the Parties (COP/MOP) of the United Nations Framework Convention on Climate Change (UNFCCC).
1 History and Purpose
2 CDM project process
2.1 Outline of the project process
2.2 Establishing additionality
2.3 Establishing a baseline
3 Financial issues
4.1 Exclusion of forest conservation/avoided deforestation from the CDM
4.2 The risk of false credits
4.3 Excessive payments for emission reductions
5 CDM projects to date
7 See also
8 External links