Sustainable finance
Sustainable Development Mechanism (SDM)
The proposed successor to the Clean Development Mechanism — a crediting mechanism designed to contribute to sustainable development as well as mitigation.
Definition
The Sustainable Development Mechanism is a proposed international carbon crediting mechanism, advanced notably by Japan in the Paris era, intended to succeed the Clean Development Mechanism by generating credits from mitigation activities while demonstrably contributing to sustainable development in host countries. Its lineage runs into the Article 6.4 mechanism established by the Paris Agreement — itself long referred to informally as the "sustainable development mechanism" — which operationalises UN-supervised crediting with sustainable development criteria and mandatory share of proceeds for adaptation.
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