CDM mechanism helps developed countries to achieve their Kyoto targets in a cost effective way by initiating these projects in developing countries. These renewable or clean energy projects can vary in size, sector, reduction targets and location. e.g. a company in the UK can start a 15MW windmill power project in India and the emission reduction produced by the project will be owned by them. These emission reductions can then be adjusted to meet their targets.

Process to start a CDM project have been simplified and streamlined.

1. The project initiating party have to get an approval from the local Designated National Authority (DNA)citing the project impact, planned reductions targets, cost, social impact etc.

2. Project once approved goes through other phases of development, implementation and monitoring.

3. Once the project is verified by the governing bodies for the impact the emission reduction certifications (CER) are issued.