Clean Development Mechanism

An arrangement under the Kyoto Protocol that allows industrialized countries to invest in greenhouse gas emission reduction projects in developing countries as a way to meet their own emissions reduction targets. By financing and implementing projects that reduce or remove emissions, such as renewable energy installations or energy efficiency improvements, these countries earn carbon credits (Certified Emission Reductions or CERs) that can be used to offset their emissions. The CDM aims to promote sustainable development in developing countries while assisting developed nations in meeting their climate goals.