Programmatic CDM: Background

Clean Development Mechanism (CDM) is a tool under the Kyoto Protocol that allows industrialized countries to meet part of their target greenhouse gas emission reductions by investing in or purchasing “carbon credits” from clean projects in developing countries, which do not have mandatory targets.

Carbon credits are the certified greenhouse gas emission reductions, measured in tons of carbon dioxide equivalent. The process of purchasing these credits helps developing countries achieve emission reductions while promoting development that is friendly to the environment.

But, the development of regular CDM projects can be time-consuming and can require considerable technical expertise. It could take a year or more to prepare a CDM project and get it approved. And transaction costs tend to be high.

This has created imbalance favoring sectors which offer large-sized projects and countries that have the technical strengths and financial capacity to develop them. As a result, more than 75 percent of CDM projects are in just four countries – Brazil, China, India and Mexico.

Programmatic CDM, approved by the United Nations Framework Convention on Climate Change (UNFCCC) in 2007, has the potential to redress this imbalance.

Instead of a single project at a single location, Programmatic CDM allows a large number of small-sized projects to be brought together under one umbrella program. The program involves more than one project type, which can be implemented over several locations and cover more than one sector. But there can only be one methodology for every program. Together, these small projects will achieve significant reductions of greenhouse gas emissions.

# # # # # # # #


For more information on the Programmatic CDM, contact Pongtip Puvacharoen,
(0) 2686-8362 or, email: ppuvacharoen@worldbank.org