Clean Development Mechanism (CDM) is a key component of the Kyoto Protocol, allowing developed countries to invest in greenhouse gas emission reduction projects in developing countries. This mechanism aims to promote sustainable development while enabling developed nations to meet their emission reduction targets.

Through CDM, developed countries can purchase carbon credits generated from projects such as renewable energy installations, energy efficiency improvements, and waste management initiatives in developing countries. In return, they receive credits that count toward their emission reduction goals.

This mechanism not only facilitates financial investment and technology transfer but also encourages developing nations to adopt environmentally friendly practices. CDM thus serves as a bridge between economic growth and environmental sustainability, fostering global cooperation in combating climate change.