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The Clean Development Mechanism (CDM)
is one of the Kyoto Protocol programs for the reduction of
greenhouse gas (GHG) emission. Under the CDM, an
industrialized country with a GHG reduction target can
invest in a project in a developing country without a target
and claim credit for the emissions that the project
achieves. German companies, for instance, invested in a wind
power project in Egypt, thus replacing electricity that
would otherwise have been produced from coal. Egypt then
sold the credit for the emissions that have been avoided to
Germany which, in turn, used them to meet its own GHG
reduction target.
Both sides benefit from CDM projects. For industrialized
countries, the CDM greatly reduces the cost of meeting the
reduction commitments that they agreed to under the Kyoto
Protocol. Developing countries receive financial and
technical assistance in upgrading their energy
infrastructure and can sell certified emission reductions
for profit. This diversification of external earnings will
reduce oil-exporting countries' dependence on the highly
volatile world oil price.
Egypt is striving to develop efficient, transparent and
strong criteria and institutions for the marketing, approval
and control of CDM projects, thus making the country
attractive for international CDM investors and ensuring the
efficient implementation of CDM projects. The private sector
will play an important role in this process, be it as
project hosts, in project design and implementation, or in
the verification of emission reductions. Donors and
governmental authorities are the potential facilitators of
CDM projects. Environment 2007 therefore intends to increase
awareness and bring together businesses and the various
financing institutions in order to ensure their full
participation in the CDM process.
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