Clean Development Mechanism (CDM)
The industrialized countries may generally fulfil their obligations to reduce GHG at home or abroad. The instruments to be applied in developing countries are being called Clean Development Mechanism (CDM-project). CDM-projects can be launched already since the year 2000. In the year 2003 accredited independent third parties will investigate these projects, will validate the project design documents (PDD) and will certify the emission reduction units (CERs).
Clean Development Mechanism (CDM) is fast becoming reality. More and more nations are joining this initiative to save the planet. CDM and its stakeholders are still at a stage of evolution and hence, you need a trustworthy partner having exposure to the mechanics and competence to deal in an emerging field.
Benefits of CDM project
• As a result of the Kyoto Protocol, carbon has become a tradable commodity with an associated value. One tonne of CO2 (carbon dioxide) reduced through a CDM project, when certified by a designated operational entity, is known as a CER (certified emission reduction), which can be traded. Revenue from CERs can form part of your project's annual cash inflow, equity, or debt.
What types of projects can benefit from CDM finance?
All CDM projects must result in a net GHG reduction, as in the case of energy efficiency improvement, renewable energy generation, or carbon sequestration through a forestation and reforestation. Typical CDM projects fall into the following categories.