The Kyoto Protocol set up the Clean Development Mechanism (CDM) – one of three flexible mechanisms, alongside Joint Implementation and Emissions Trading – as a key part of this new global aspiration. The CDM allowed countries with emission-reduction targets to partly meet their commitments by buying Certified Emission Reductions (CERs), one tonne of CO2 equivalent each, from projects that reduced or avoided emissions in developing countries. This also meant that crucial funding for sustainable development flowed to countries and communities that needed it. By allowing companies to develop projects and trade CERs, the CDM mobilized the private sector – essentially sending project developers off in search of low-cost climate change mitigation opportunities in developing countries. Thousands of companies were engaged, pumping money into a wide range of projects: wind, biomass and solar energy production; efficient cookstoves; landfill and waste management; afforestation and reforestation; and more.
Major investors and banks employed thousands of people to find and register projects, achieve emission reductions and buy and sell the resulting CERs – the first globally traded climate currency. Work under the CDM shows that actions to mitigate climate change bring many co-benefits in human health, green jobs, poverty reduction and other aspects of development. As we look towards establishing a new sustainable development mechanism under Article 6 of the Paris Agreement, we should bear these successes in mind.