The objective of this article is to review how this remarkable turn of events unfolded, to examine whether and to what extent the CDM has overcome the structural difficulties highlighted above, and to discuss the future of the CDM in the context of global climate mitigation in the medium and long run. The article is structured as follows. It first reviews the history of the CDMfrom Kyoto to the present day. Then it describes the current status of the CDM. Next it assesses the relationship between the CDM and sustainable development.