Explanation: The Clean Development Mechanism (CDM), defined in Article 12 of the Protocol, allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol (Annex B Party) to implement an emission-reduction project in developing countries.

• Such projects can earn saleable certified emission reduction (CER) credits, each equivalent to one tonne of CO2, which can be counted towards meeting Kyoto targets.
• The mechanism is seen by many as a trailblazer. It is the first global, environmental investment and credit scheme of its kind, providing standardized emissions 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 industrialized countries some flexibility in how they meet their emission reduction or limitation targets.

 Source: https://unfccc.int/process-and-meetings/the-kyoto-protocol/mechanisms-under-the-kyoto-protocol/the-clean-development-mechanism