Carbon finance is now a proven tool to support greenhouse
gas mitigation. Market mechanisms, such as the CDM for greenhouse gas (GHG) mitigation projects hosted in developing countries, and JI for projects located in economies in transition, have demonstrated that they can complement and leverage other resources to unlock low carbon investment by overcoming barriers, driving innovation, and creating a revenue stream that sustains projects over time. This report seeks to provide an objective assessment, based on practical operational experience, of the achievements as well as of the challenges that have been faced and that persist. It examines and explains the discrepancies between expectations and theoretical concepts, on the one hand, and practical reality, on the other. It also
draws on concrete project experience to provide practical
suggestions and recommendations to improve efficiency and effectiveness without compromising environmental integrity.