The Clean Development Mechanism (CDM) allows emission-reduction projects in developing countries to generate certified emission reduction (CER) credits. Each CER is equivalent to one ton of CO2. These CERs can be traded and sold, and used by industrialized countries to meet a part of their emission reduction targets under the Kyoto Protocol. CDM allows industrialized countries to invest in projects that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries.

Up to 04th August 2008, there are more than 3000 CDM projects in pipeline and of which 1133 have been registered by the CDM Executive Board as CDM projects. These projects reduce GHG emissions by an estimated 219,955,338 tons CO2 equivalent per year.

Pakistan deposited its instrument of accession to the Kyoto Protocol on 11th January 2005, and thus became eligible to benefit from CDM. CDM is a tool that is available for Pakistan to assist it in achieving sustainable development and contributing to the ultimate objective of the Convention.