Clean Development Mechanism

CDM – Clean Development Mechanism

Ø      A mechanism by which Industrialised Nations can achieve part of their reduction obligations through projects that reduce or fix/sequester carbon in Developing Countries.

Ø      The Certified Emission Reductions (CERs) are a unit of carbon that is reduced or sequestered.

CDM Concept

Developed Country

n      Govt and companies want to reduce GHG emissions

q     Invest in their own country

q     Invest in a project in Developing Country

Developing Country

n      Many opportunities for projects that reduce emissions eg

q     Forestry planting

q     Renewable electricity

q     Energy efficiency

q     Clean transport

q     Biomass energy

n      Project Produces CERs

Purpose of CDM

1. To assist developing countries in achieving sustainable development
2. To assist developed countries in achieving compliance with part of their quantified emission reduction commitments. 

Carbon Trade:

The carbon trade came about in response to the Kyoto Protocol. Signed in Kyoto, Japan, by some 180 countries in December 1997, the Kyoto Protocol calls for 38 industrialized countries to reduce their greenhouse gas emissions between the years 2008 to 2012 to levels that are 5.2% lower than those of 1990.

The idea behind carbon trading is quite similar to the trading of securities or commodities in a marketplace. Carbon would be given an economic value, allowing people, companies or nations to trade it. If a nation bought carbon, it would be buying the rights to burn it, and a nation selling carbon would be giving up its rights to burn it. The value of the carbon would be based on the ability of the country owning the carbon to store it or to prevent it from being released into the atmosphere. (The better you are at storing it, the more you can charge for it.)






links:


www.unfccc.int
www.carbonyatra.com