The Clean Development Mechanism (CDM), defined in Article 12 of the Kyoto Protocol, has been set up in order to tackle two issues:
- assisting developing countries (non-Annex I countries) in achieving sustainable development
- assisting developed countries (Annex I countries) in achieving compliance with their emission-reduction or emission-limitation commitment under the Kyoto Protocol.
In order to do so, the CDM allows an Annex I country to implement an emission-reduction project in a non-Annex I country. Such a project can earn saleable certified emission reduction (CER) credits. One CER credit is equivalent to one tonne of CO2, helping the Annex I country meeting the aims set by the Kyoto Protocol. These credits can be sold privately or in the international market, hence being transferred between countries. At the same time, the CDM reduces the cost of implementing such projects for non-Annex I countries.
Projects registered in the CDM are very often performed at a local small scale, such as: improved cooking stoves in Nigera and Bangladesh, municipal waste compost program in Uganda or solar water heater program in Tunisia. CCS would be one of the fewer programs implemented at a large scale within the CDM.
The CDM is supervised by the CDM Executive Board and is under the guidance of the Conference of the Parties (COP) of the UNFCCC, also called Meeting of the Parties (MOP).
The COP is advised by the Subsidiary Body for Scientific and Technological Advice (SBSTA) on questions of technology, methodology and science.