Clean Development Mechanism
The Clean Development Mechanism (CDM) is a project-based flexible offset mechanism under the Kyoto Protocol that allows the crediting of emission reductions from greenhouse gas (GHG) abatement projects in developing countries. The CDM has two purposes: it should assist developing countries to achieve sustainable development and help industrialised countries to reduce the costs of greenhouse gas abatement.
CDM is one of the three market-based mechanisms set up under Kyoto Protocol, the other two being - Joint Implementation and emissions trading or commonly called as carbon trading, which provides for trading of (a) spare emission units available with any entity (savings from the assigned or permissible emission levels), (b) CERs created from CDM activities, (c) an emission reduction unit (ERU) generated by a Joint Implementation project and (d) removal units (RMU) created on the basis of land use, land-use change and forestry (LULUCF) activities such as reforestation.
The mechanism of Joint implementation (JI) is similar to CDM but with the difference that the emission reduction projects are undertaken by an Annex I country in another Annex I country
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