Trading in Fake Carbon Credits: Problems with the Clean Development Mechanism (CDM)

Written by Barbara Haya (International Rivers) and Karen Orenstein (Friends of the Earth)

What is the CDM?

The Clean Development Mechanism (CDM) is the world's biggest carbon offsets market. In theory, the CDM allows industrialized countries to support projects that decrease emissions in developing countries and then use the resulting emissions reduction credits towards their own reduction targets under the Kyoto Protocol. Industrialized countries supported the establishment of the CDM because it would provide them with flexibility in how they can meet their Kyoto targets, particularly if domestic reductions turn out to be more costly than expected. Developing countries supported the CDM because they would receive funds for "sustainable development."

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