Earlier today, Canada's Environment Minister, John Baird, announced a contribution of $1.5 million (US) to the United Nations Clean Development Mechanism (CDM).

The CDM is an arrangement under the United Nations Framework Convention on Climate Changewhich allows developed countries to meet their emissions reductions targets through investments in projects that meet specific criteria.  They must be:

• undertaken in a developing country;
• generate reductions in greenhouse gas emissions;
• contribute to the host developing country's sustainable development; and
• be eligible for emission reduction credits.

Companies which invest in CDM projects earn credits that can be used to contribute to their emission reduction commitments.  An advantage for industry is that global greenhouse gas emissions can be reduced more cheaply as the costs of reducing emissions in developing countries are generally lower than in industrialized countries.

Companies which wish to implement emissions-reducing projects must show that the reduction in emissions would not have happened without the incentive provided by emissions credits.

The Executive Board of the CDM ensures that projects meet the required criteria by carrying out evaluations under the rules determined by the Conference of the Parties of the United Nations Framework Convention on Climate Change.

More information can be found at: http://unfccc.int/kyoto_protocol/mechanisms/items/2998.php