The purpose of the Clean Development Mechanism (CDM) is defined in Article 12 of the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

The CDM has a two objectives:  
  • To assist developing country Parties in achieving sustainable development, thereby contributing to the ultimate objective of the Convention
  • To assist developed country Parties in achieving compliance with part of their quantified emission limitation and reduction commitments under Article 3.  
CDM projects that reduce emissions of greenhouse gases will create Certified Emissions Reductions (CERs) which can then be used by Annex 1 Parties to achieve compliance with their Kyoto quantified emission limitation and reduction commitments. The CDM mechanism therefore works to directly facilitate investment by Annex 1 Parties (and their private entities) in greenhouse gas reduction projects as well as to facilitate the transfer of new technologies that reduce greenhouse gas (GHG) emissions in non-Annex 1 countries.
  1. The "Participation Requirements" for Parties to the Kyoto Protocol ratify the Kyoto Protocol.
  2. Establish an effective institutional and legal frameworks for approving such projects. In particular, the modalities and procedures for a Clean Development Mechanism or CDM ( Annex decision 17/CP.7 ) require that Parties participating in the CDM shall designate a National Authority (DNA) for the CDM. While the DNA shall be responsible for evaluating and approving the projects and serve as a point of contact, no further guidance is given in the CDM rules as to its role and function. Each Host country has the responsibility to determine the approach to pursue.
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