Q. Consider the following statements:

1. Clean Development Mechanism (CDM) in respect of carbon credits is one of the Kyoto Protocol Mechanisms.
2. Under the CDM, the projects handled pertain only to the Annex-I countries.

Which of the statements given above is/are correct? (UPSC Prelims 2008)
Answer: 1 only
Notes: Statement 1 is correct. The Clean Development Mechanism (CDM) is one of the three flexible mechanisms under the Kyoto Protocol, facilitating carbon credit trading and emission reduction projects. Statement 2 is incorrect because CDM projects are implemented in developing (non-Annex I) countries, while Annex I countries invest in these projects to earn carbon credits.