The Clean Development Mechanism (CDM) permits industrialised countries that maintain binding emission reduction objectives in accordance with their Kyoto obligations, to invest in climate protection projects in developing countries without reduction objectives. By doing so, they are able to generate certificates (so-called Certified Emission Reductions, CERs), that compensate for the increase in emissions in their own country. Furthermore, CDM should contribute to the sustainable development of the host countries, in particular through the transfer of environment-friendly technologies.

Find out more about the exact procedure of CDM projects here.

In contrast to the Clean Development Mechanism, Joint Implementation projects (JI) are carried out in industrialised countries or newly industrialised countries. These countries (so-called Annex 1 countries) are under obligation to bring about reductions in accordance with the Kyoto protocol-(contrary to the newly industrialised countries: so-called Annex 2 countries). Generally speaking, the JI host country in which the project is carried out is a newly industrialised country and has lower costs for emission reduction than the country which is investing. The project host country issues the certificates, which are then deducted from the state-own emissions. As only a transfer from one country into another is taking place, the total authorised emissions remain the same (zero-sum game; not as in the CDM case, where additional certificates are generated). Certificates from JI projects are called Emission Reduction Units (ERUs) and are only valid as from 2008, even though JI projects having been authorised since 2000.

The so-called "Supervisory Committee", created afterwards, is responsible for JI project supervision. In general, the criteria for JI projects are much the same as those for CDM projects, although due to the pre-mentioned zero-sum game, one can conclude that controls are likely to be less rigorous than those of CDM projects. Joint Implementation should also lead to the transfer of modern technologies into the host countries.

Considering the rapid growth and exponential energy consumption in many developing and newly industrialised countries, the project-based mechanisms of the Kyoto protocol are pioneering instruments for the promotion of a clean development and a sustainable energy system.