Clean Development Mechanism (CDM)

A market-based mechanism defined in Article 12 of the Kyoto Protocol that allows industrialized countries to reach their greenhouse gas (GHG) reduction targets by implementing emission-reduction projects in developing countries. “A CDM project activity might involve, for example, a rural electrification project using solar panels or the installation of more energy-efficient boilers.” Such projects earn a country certified emission reduction (CER) credits, each equaling one ton of CO2. This landmark cost-effective mechanism stimulates green investment and sustainable development.