Hydro Division

Kyoto Protocol envisages three market-based "flexible mechanisms":

  • International Emissions Trading,
  • Joint Implementation and.
  • The Clean Development Mechanism.

These are to allow industrialized countries to meet their targets through trading emission allowances between themselves and gaining credits for emission-curbing projects abroad. Joint Implementation refers to projects in countries that, too, have emission targets, and the Clean Development Mechanism refers to projects in developing countries with no targets.

The rationale behind these three mechanisms is that greenhouse gas emissions are a global problem and that the place where reductions are achieved is of less importance. In this way, reductions can be made where costs are lowest, at least in the initial phase of combating climate change.

Detailed rules and supervisory structures have been set up to ensure that these mechanisms are not abused.

Key Players in CDM Mechanism cycle:

  • CDM Executive Board (UNFCCC – Secretariat)
  • Designated Operational Entity (DOE)
  • Designated National Authority (DNA)
  • Project Developer/Investor
  • Verifiers and Certifiers
  • Certified Emission Reduction (CER) Buyer (World Bank, KfW etc.)
  • JISC Joint Implementation Supervisory Committee (UNFCCC-Secretariat)
  • Designated focal point (dfp)
  • Emission Reduction Unit (ERU)
  • Project Developer/Investor
  • Verifier and Certifier
  • Buyer (Funds, Companies, EBRD, KfW etc.)

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