CDM Clean Development Mechanism

The Clean Development Mechanism was developed from the concept of "Joint Implementation Mechanism" (JI) and was put forward in the Kyoto Protocol of 1997.

According to the Kyoto Protocol, it is a kind of cooperation mechanism that improves the sustainable development of the third countries with application of alternative resources to help achieve the ultimate goal of the Kyoto Protocol; at the same time, it facilitates the fulfillment of GHG reduction goals for the developed countries.

The CDM and JI mechanisms are developed based on the fact that the mitigation costs in different regions vary although the impact of GHG on the earth climate has nothing to do with the location where the GHG mitigation happens. Therefore, for the sake of economic efficiency, it would be best to mitigate GHG at the lowest cost possible. Generally, the GHG mitigation costs in regions where power facilities are low-efficient are lower than those in regions with modern high efficiency production and utilization performances and energy demands are semi-stagnant.

Under the CDM, the ANNEX B parties might invest in clean energy projects in the third countries to comply with their emission reduction commitments. In this aspect, the CDM provides a double-win strategy.