Clean Development Mechanism

A mechanism defined under Article 12 of the Kyoto Protocol through which investors (governments or companies) from developed (Annex B) countries may finance greenhouse gas emission reduction or removal projects in developing (Non-Annex B) countries, and receive Certified Emission Reduction Units for doing so, which can be credited towards the commitments of the respective developed countries. The CDM is intended to facilitate the two objectives of promoting sustainable development in developing countries and of helping industrialized countries to reach their emissions commitments in a cost-effective way.