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The Kyoto Protocol has created two markets or investment mechanisms to achieve global climate protection and cost minimisation; Clean Development Mechanism (CDM) and Joint Implementation (JI).
These schemes have generated investment in technology and employment. The Certified Emission Reductions (CERs) and Emission Reduction Units (ERUs) are an excellent international carbon currency.
Clean Development Mechanism (CDM)
The Clean Development Mechanism (CDM) allows industrialised countries to finance emissions-reduction projects in developing countries and receive credit for doing so. Such projects can earn saleable CER credits, each to the value of one tonne of CO2 equivalent, which can be counted towards meeting Kyoto targets.
CDM is the first global, environmental investment and credit scheme of its kind, providing a standardised emission offset instrument, CERs. A CDM project activity might involve, for example, a rural electrification project using solar panels or the installation of more energy-efficient boilers. The mechanism stimulates sustainable development and emission reductions, while giving industrialised countries some flexibility in how they meet their emission reduction or limitation targets.
Joint Implementation (JI)
Industrialised countries can finance certain kinds of projects in other developed countries and acquire Emission Reduction Units (ERUs) through a mechanism known as Joint Implementation. In this way countries can lower the cost of meeting their Kyoto targets by investing in greenhouse gas reductions in countries where reductions are cheaper.
Most JI projects are implemented in “transition economies” – particularly in Eastern Europe and the former Soviet Union.
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Additional risk management services to help you manage the cost of emissions compliance.