The bulk of greenhouse gases emissions caused by human activity come from the energy sector, primarily as a result of burning fossil fuels (coal, oil, and natural gas) to provide electrical power, heat, transportation, and energy for industrial production processes. Burning fossil fuels produces carbon dioxide, which is by far the most significant of the greenhouse gases. Improved energy efficiency, and greater use of renewable sources of energy, such as solar, wind, hydro and modernized biomass technologies, can provide opportunities for people to enjoy essential energy services while consuming much less fuel and generating lower emission levels. In addition, they can help address local and national environmental problems like urban air pollution and acid rain, as well as climate change.


The CDM User’s Guide is designed as a reference tool primarily for UNDP Country Offices to learn more about the opportunities and challenges of the CDM and implement projects efficiently and equitably in a variety of national and sectoral contexts. We also hope that other interested individuals and organizations will also find it useful. This document addresses issues of climate change and sustainable development including UNDP’s CDM strategy, the CDM project cycle, development of the project design document, procedures for small-scale projects, governance and transaction costs, CDM transactions, the carbon market, and further information on such issues (Annexes).

The UNDP CDM User’s Guide can be accessed by clicking on each of the following sections:

The Clean Development Mechanism: A User's Guide
UNDP/BDP Energy and Environment Group, 2003, 84 pages
Executive Summary and Chapter 1
: Furthering Sustainable Development and Emissions Reductions
Chapter 2: The CDM Project Cycle
Chapter 3: Developing the Project Design Document
Chapter 4: Simplified Procedures for Small-Scale Projects
Chapter 5: Issues of Governance, Transaction Costs and Efficiency
Chapter 6: CDM Transactions
Chapter 7: The Carbon Offset Marketplace
Annexes Section

The Clean Development Mechanism, CDM


What is CDM?
The Clean Development Mechanism (CDM) was set up under the Kyoto Protocol to the UN Framework Convention on Climate Change. It is designed to provide new energy financing opportunities for developing countries based on public and private investments from industrialized countries required to reduce their greenhouse gas emissions under the provisions of the Kyoto Protocol. The mechanism permits governments or companies in industrialized countries to finance emission-reduction projects in developing countries as a means of meeting their obligations under the protocol. Developing countries can benefit by receiving financing for the adoption of low-emission energy technologies, while industrialized countries can fulfill their emission reduction commitments at lower costs than they would incur through actions at home.

UNDP is supporting knowledge sharing and capacity building activities that will allow developing countries to take maximum advantage of the new financing opportunities provided by the Clean Development Mechanism. These include 'learning by doing' capacity development projects as well as information workshops and the development of UNDP's CDM Manual.

MDGs and CDM
Use of the Millennium Development Goals (MDGs) as Sustainable Development Indicators in CDM

For the success of CDM it is important to explore and ensure robust mitigation options that are responsive to cost effectiveness and long-term capacity building for sustainable development. It is the prerogative of the host developing country to develop and determine appropriate sustainable development criteria for CDM projects. While the selected criteria may vary from country to country, it is vital that the principles are clearly defined, transparent, build up on the exiting knowledge base of the three pillars of sustainability, viz., environment, social and economic and that they are arrived at in an open participatory method. By aligning the principles of equity and efficiency, criteria for project selection can be developed which ultimately support the longer-term goal of sustainable development.

Developing countries are increasingly becoming aware of the need to have clearly defined sustainable development criteria that will allow them to explore the possibility of the ability of CDM activities to address the needs of the poorest segments of the population. The MDGs serve as a comprehensive, long-term benchmark to ensure that CDM projects are in line with sustainable development objectives. The success of the CDM is contingent on short-term capacity needs sufficiently developed so that the long-term objective of an actively linked global carbon emissions market is successfully implemented and that developing countries can yield sustainable development benefits from emissions reduction projects. The MDGs would allow developing countries to place the CDM within a larger rubric of sustainable development with concrete development outcomes such as hunger and poverty reduction, education and health goals, gender equality and empowerment, reduction in child mortality, environmental sustainability and global partnerships for development achieved through the benefits of reducing GHG emissions, receiving new technologies, and reaping the benefits of economic growth and FDI.

CDM Activities
Learning by Doing CDM Capacity Development Activities on engaging the private sector in Brazil and South Africa

Learning by doing CDM Capacity Development projects in Nicaragua - joint activity of RBLAC, BDP and Nicaragua Country office

Learning by doing CDM capacity development activities in Peru and Trinidad & Tobago (Joint Project RBLAC, BDP and UNDP Peru and UNDP Trinidad & Tobago respectively);

CDM Projects
Lessons learnt from UNF funded CDM Project: "Learning by Doing CDM Capacity Development Activities on engaging the private sector in Brazil and South Africa".

CoP-9 side-event held in Milan, Italy, Dec 5, 2003.

UNF funded CDM Project: Promoting innovative Public-private Partnerships for efficient CDM Operations -Preparatory Phase

Other Activities on CDM
Lessons learned from establishing of Designated National Authorities in selected countries. CoP-9 side-event series held in Milan, Italy, Dec 2, 6 a and 8, 2003.

Asia Pacific workshop on Efficient Implementation of CDM organized in partnership with The World Bank, Government of Canada, Government of Malaysia, RBAP and UNDP Malaysia

CDM workshop in collaboration with the Government of Indonesia and NEDO.. 15-16 Sept, 2003

CDM Connect UNDP's Clean Development Mechanism Network: a web-based knowledge-sharing portal on CDM issues.