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Clean Development Mechanism

The United Nations’ benchmark mechanism for reducing emissions in developed countries is the Clean Development Mechanism (CDM). Defined in Article 12 of 1997′s Kyoto Protocol, the CDM has made significant political and regional advances since its inception.

Generally regarded as the most efficient and effective long-term means to reduce/offset greenhouse gas (GHG) or carbon emissions, the CDM was seen as the first steps towards establishing a fungible global carbon market. The rules of which were subsequently refined in 2001 via the Marrakech Accords.

The uniqueness of the CDM lies in its novel project approach. The goal of the United Nations’ Framework Convention on Climate Change (UNFCCC) was to create a system by which low-cost carbon reductions in developing countries can be exploited with the help of funds from developed countries in exchange for offset credits known as Certified Emission Reductions (CERs). One CER technically allows the holder to offset one metric tonne of CO2 (equivalent) of their own emissions.

CDM projects undertaken in developing countries are intended to meet two overall objectives: firstly, to address the sustainable development needs of the host country; and secondly, to reduce/limit carbon emissions to generate CERs that are deemed valid compliance instruments in all Annex I (developed) countries that are Party to the Kyoto Protocol emission reduction targets for 2008-2012 and thus increase their compliance options.


 

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