The CDM allows emission-reduction (or emission removal) projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2.

These CER's can be traded and sold, and used by industrialized countries to a meet a part of their emission reduction targets under the Kyoto Protocol.

The mechanism stimulates sustainable development and emission reductions whilst giving industrialized countries some flexibility in how they meet their emission reduction limitation targets.

The projects must qualify through a rigorous, public registration and issuance process designed to ensure real, measurable and verifiable emission reductions that are additional to what would have occurred without the project.

The mechanism is overseen by the CDM Executive Board, answerable ultimately to the countries that have ratified the Kyoto Protocol.

http://cdm.unfccc.int/index.html