The Clean Development Mechanism (CDM) Market Driven By Global Emission Reduction Needs
The Clean Development Mechanism (CDM) market comprises carbon credits issued for emission reduction projects in developing countries. CDM projects aim to combat climate change by assisting nations in achieving sustainable development targets. Certified Emission Reduction (CERs) credits are generated when a CDM activity is verified to have reduced emissions. These credits can be traded and sold, with the proceeds supporting sustainable infrastructure and technology in developing nations. The CERs are a tradable commodity and provide value to both emission reduction projects and buyer countries or companies.
The Global Clean Development Mechanism (CDM) Market is estimated to be valued at US$ 225.43 Bn in 2024 and is expected to exhibit a CAGR of 8.5% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the Clean Development Mechanism are World Bank, Gold Standard Foundation, Verra, EcoSecurities, SouthSouthNorth, ClimateCare, Carbon Trust, Deloitte, Ernst & Young (EY), KPMG, PwC (PricewaterhouseCoopers), Natural Capital Partners, Sustainable Development Solutions Network (SDSN), and International Emissions Trading Association (IETA).
The growing demand for carbon offsets to achieve sustainability goals and net-zero emissions targets is fueling growth in the Clean Development Mechanism Market Size . More companies and countries are purchasing CERs to balance high emission activities in theirown jurisdictions and meet international climate commitments.
The global expansion of emissions trading schemes and the emergence of new carbon markets in Asia, Africa and South America is further widening opportunities for CDM projects. Developing nations can attract foreign investments by undertaking high-quality CDM programs to generate CERs for compliance and voluntary carbon markets worldwide.
Market Drivers
The rising needs of emission intensive economies to cost-effectively achieve emission reduction obligations under the Paris Agreement is a key driver for the CDM market. CDM provides a flexible mechanism to develop emission reduction projects in developing countries and procure compliance-ready credits at lower prices compared to domestic decarbonization programs. This fosters global climate action while supporting infrastructure development with technology transfers in emerging nations.
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