The Clean Development Mechanism (CDM) is an arrangement under the Kyoto Protocol that allows industrialized countries with a greenhouse gas reduction commitment (so-called Annex 1 countries) to invest in emission reducing projects in developing countries. Such an investment is seen as an alternative to what is generally considered more costly emission reductions in their own countries.

In theory, the CDM allows for a drastic reduction of costs for the industrialised countries, while achieving the same amount of emission reductions as without the CDM.