The Purpose of the CDM

The Clean Development Mechanism (CDM) is a project-based mechanism designed to promote investment in projects that reduce or sequester emissions of greenhouse gases in developing countries. Developing countries are referred to Non-Annex I countries to the UN Framework Convention on Climate Change (UNFCCC). The CDM is the only mechanism under the Protocol promoting partnerships between developed (also referred to Annex I countries to the UNFCCC) and developing countries. The CDM rules, however, do not explicitly exclude projects from being undertaken by partnership between one or more developing countries; these are referred to as ‘unilateral' or ‘South-South' projects.

The CDM has three stated objectives:

• To assist Parties not included in Annex I (i.e. developing countries) in achieving sustainable development;
  
  
• To contribute to the ultimate objective of the Convention to stabilise greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system; and
  
  
• To assist Parties included in Annex I (developed countries) in achieving compliance with their quantified emission limitation and reduction commitments under Article 3 of the Kyoto Protocol.