The purpose of the CDM is to promote clean development in
developing countries, i.e., the "non-Annex I" countries. The CDM is
one of the Protocol's "project-based" mechanisms; in that the CDM is
designed to promote projects that reduce emissions. The CDM is based on the
idea of emission reduction "production". These reductions are
"produced" and then subtracted against a hypothetical
"baseline" of emissions. The emissions baselines are the emissions
that are predicted to occur in the absence of a particular CDM project. CDM
projects are "credited" against this baseline, in the sense that
developing countries gain credit for producing these emission cuts.
The economic basis for including developing countries in
efforts to reduce emissions is that emission cuts are thought to be less
expensive in developing countries than developed countries. For example, in
developing countries, environmental regulation is generally weaker than it is
in developed countries. Thus, it is widely thought that there is greater
potential for developing countries to reduce their emissions than developed
countries.
From the viewpoint of bringing about a global reduction in
emissions, emissions from developing countries are projected to increase
substantially over this century. Infrastructure decisions made in developing
countries could therefore have a very large influence on future efforts to
limit total global emissions. The CDM is designed to start off developing
countries on a path towards less pollution, with industralized countries paying
for these reductions.
There were two main concerns about the CDM. One was over the additional of emission reductions produced by the CDM. The other was whether
it would allow rich, northern countries, and in particular, companies, to
impose projects that were contrary to the development interests of host
countries. To alleviate this concern, the CDM requires host countries to
confirm that CDM projects contribute to their own sustainable development.
International rules also prohibit credits for some kind of activities, notably
from nuclear power and avoided deforestation.
