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The Clean Development Mechanism

Getting developing countries involved

* The Kyoto Protocol does not set limits on the greenhouse-gas emissions of developing nations. Yet the greenhouse-gas emissions of developing countries are growing, especially in the case of enormously populous states such as China and India, which are rapidly expanding their industrial output.

* Because the atmosphere is equally damaged by greenhouse-gas emissions wherever they occur and equally helped by emissions cuts wherever they are made, the Protocol includes an arrangement for reductions to be "sponsored" in countries not bound by emissions targets. The so-called Clean Development Mechanism is loaded with complicated details and acroynyms, but in simplified form it works this way: Industrialized countries pay for projects that cut or avoid emissions in poorer nations -- and are awarded credits that can be applied to meeting their own emissions targets. The recipient countries benefit from free infusions of advanced technology that allow their factories or electrical generating plants to operate more efficiently -- and hence at lower costs and higher profits. And the atmosphere benefits because future emissions are lower than they would have been otherwise.

* The mechanism has drawn extensive interest from rich and poor countries alike, and steps have been taken to put it into operation even before the Protocol takes effect. In particular, it is cost-effective and offers a degree of flexibility to industrialized countries trying to meet their targets. It can be more efficient for them to carry out environmentally useful work in developing countries than at home, where land, technology, and labor are generally more costly. The benefits to the climate are the same.

* The system also appeals to private companies and investors. The mechanism is meant to work bottom-up -- to proceed from individual proposals to approval by donor and recipient governments to the allocation of "certified emissions reduction" credits. Countries earning the credits may apply them to meeting their emissions limits, may "bank" them for use later, or may sell them to other industrialized countries under the Protocol's emissions-trading system. Private firms are interested in the mechanism because they may earn profits from proposing and carrying out such work and because they may develop good reputations for their technology which will lead to further sales. A possible benefit for everyone is that the potential for profits may lead these businesses to develop even more useful technologies.

* The Clean Development Mechanism is overseen by an Executive Board. To be certified, by the Clean Development Mechanism Executive Board, a project must be approved by all involved parties, demonstrate a measurable and long-term ability to reduce emissions, and promise reductions that would be additional to any that would otherwise occur.

 

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Other Relevant Chapters

A summary of the Kyoto Protocol more >>

Emissions trading more >>

Joint Implementation more >>

Key Link
UNFCCC CDM site

 

Next Steps

Ad Hoc Working Group, AWG
 
Information Resources on the WWW

Climate change and CDM (UNDP) more>>

Information and guidebook on the CDM (UNEP) more >>

 

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