CDM is one of the Kyoto flexible mechanisms through which industrialised countries (Annex I countries) may finance GHG emission reductions or emissions removals (see carbon sinks) in developing countries (non-Annex I countries), and receive emissions credits (CERs) for doing so. These emission credits can then be applied to meet mandatory limits on their own emissions (cf. Annex B).
In CDM projects, credits are granted only to emissions having been reduced or removed in comparison with a baseline scenario (BAU) estimating the "normal" trend of GHG emissions in the host country.
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