The Clean Development Mechanism (CDM) is a flexible mechanism based on the provision of Article 12 of the Kyoto Protocol. It is a scheme for greenhouse gas (GHG) emission reduction through cooperation between a developed country (Annex I Party to the United Nations Framework Convention on Climate Change, UNFCCC) which is committed to certain GHG emission reduction targets under the Kyoto protocol and a developing country (non-Annex I Party) which does not have any commitments to reduce GHG emissions. The purpose of the CDM is to assist in the accomplishment the of GHG targets of developed countries under the Kyoto Protocol and to contribute to the sustainable development in non-Annex I Parties (host countries).
Under the CDM, an Annex I Party implementing projects (e.g. generating power from recovering landfill gases such as methane) resulting in a reduction of greenhouse gas emissions within the territories of a non-Annex I Party. Annex I Parties are able to acquire all or parts of the credits (Certified Emission Reductions, CERs) which are issued by the UN Executive Board after the project has been successfully implemented.