CDM (Clean Development Mechanism) not only brings high social efficiency but also an opportunity to achieve sustainable development for countries in general and businesses in particular. So, what is the nature of CDM?
The Clean Development Mechanism (CDM) is a cooperation mechanism established under the Kyoto Protocol of 1997, which has the potential to support developing countries in achieving sustainable development by promoting environmentally friendly investment from governments and businesses in industrialized countries.
Background: To enhance the importance of protecting the environment as well as achieving sustainable development, in December 1997, the Kyoto Protocol was established as an important milestone marking the first time governments have accepted legal constraints on the greenhouse effect.
Since then, CDM has become a provision of the Protocol, which allows governments or private organizations in industrialized countries to implement emissions reduction projects in developing countries and receive carbon credits in the form of ” Emission Reduction Certification ” (CERs).
1CER = 1 TON CO2
CDM project development process in carbon market
Overall, CDM contributes to promoting sustainable development in developing countries, while allowing developed countries to achieve their goal of effectively reducing greenhouse gas emissions – not only economically effective but also useful for environmental protection.