The Clean Development Mechanism (CDM) is an arrangement under the Kyoto Protocol allowing industrialized countries with a Greenhouse Gas (GHG) reduction commitment (so-called Annex 1 countries) to invest in emission reducing projects in developing countries ( Non-Annex-1). Now, Annex-1 parties having emission caps on their total emission, can buy those credits from Non-Annex-1 parties to fulfill their limitations. This will create an economical market for carbon credits and also more interest for GHG reduction projects. In a simple way, when a developing country (Non Annex-1) like India , implements a project which can reduce certain amount of Green House Gases, this amount gives credits, which are called Certified Emission Reductions (CERs).
Salient Features of CDM
- Participation in CDM project activity is voluntary and investments in CDM is market driven.
- CDM activities must lead to quantified reductions in emissions.
- The emissions reductions achieved are transferable in the form of CERs to the investor country, the CERs are a marketable commodity under the Kyoto Protocol.
Objectives of a CDM Project
- GHG Emission Reduction.
- Sustainable Development.
Availing of CERs
- RRBEL provides Carbon Advisory service for availing of CERs.