Home 
Publications Catalog Online Publications Document
ADB Basics
|
|
The Clean Development Mechanism facility at the Asian Development Bank provides opportunities to developing member countries to access additional financial resources through efficient emissions reduction to promote sustainable development.
The Clean Development Mechanism (CDM), defined in Article 12 of the Kyoto Protocol to the United Nations Framework Convention on Climate Change, is a flexible financing instrument that enables developing countries to benefit from reductions of emissions of harmful greenhouse gases (GHGs) and promote sustainable development. A typical CDM project produces a marketable commodity, namely emissions reduction (ER) credits. The sale of ER credits to developed countries and companies with ER targets can help generate additional revenue for a CDM project in the developing country.
A project should meet three essential requirements to qualify as a CDM project: reduce emissions below the level in the absence of the project, be located in a developing member country (DMC) of the Asian Development Bank (ADB), and provide benefits that contribute to sustainable development in the DMC.
For the DMC, benefits include additional financial resources, appropriate technology, and achievement of its sustainable development objectives. For developed countries, benefits include cost-effective ER to meet their Kyoto commitments, experience in international trade in environmental goods, and increased commercial interactions with developing countries.
The CDM Facility at ADB is set up to assist its member countries address the global climate change issues and benefit individual DMCs. The main objectives of ADB’s CDM facility are to
Current initiatives in other ER trading are driven by buyers of ER credits, either individually or through multilateral institutions. ADB’s CDM facility expects to fulfill a unique function within the global CDM initiative in three ways
|
For several years, ADB has been actively promoting clean energy initiatives. These initiatives are an integral part of Energy 2000, ADB’s energy policy, that recommends a reorientation of the energy sector activities to address regional and global environmental impacts.
Under its Asia Least-cost Greenhouse Gas Abatement Strategy program, ADB took the lead in developing the first set of national level GHG inventories and in identifying mitigation projects for 11 countries (Bangladesh, People’s Republic of China, India, Indonesia, Republic of Korea, Mongolia, Myanmar, Pakistan, Philippines, Thailand, and Viet Nam).
ADB’s efforts have contributed significantly to developing capacity among selected DMCs to integrate climate change issues in their development process. Subsequent to the Kyoto Protocol, at the request of several DMCs, ADB undertook a capacity building program for Implementation of the Kyoto Protocol and the Clean Development Mechanism in 15 DMCs, targeting the relevant government departments and organizations in each country. This also enabled more meaningful participation by these countries in the international negotiations.
The next step in the process was to focus on project-specific capacity building to prepare a shelf of bankable project concepts. In 2001, ADB brought together several trust-fund initiatives provided by the governments of Canada, Denmark, and the Netherlands to launch its Renewable Energy, Energy Efficiency, and Climate Change (REACH) Program promoting sustainable development.
Assisting DMCs to access and mobilize additional resources for their development projects that mitigate GHG emissions is the next step in ADB’s initiatives on climate change. The CDM facility aims to do just that.
© 2009 Asian Development Bank Privacy | Terms of Use |
 Top of page |
Information Brochures and Other Publications