Clean Development Mechanism (CDM)

A UN-administered scheme that allows industrialized countries and companies with greenhouse gas emissions reduction targets to invest in ‘emissions-saving projects’ that are supposed to compensate for their continued pollution. The CDM has over 4,000 projects registered to date, and is the world’s largest source of carbon offsets.

A September 2012 review commissioned by the Executive Board that administers the CDM found that it has ‘essentially collapsed’, with prices falling dramatically on the basis of a lack of ambitious climate targets.

The CDM has been criticized for the inadequacies of additionality testing. The use of CERs in cap and trade systems (notably, the EU Emissions Trading System) serves to delay and displace greenhouse gas emissions reductions at source in industrialized countries.


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