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The United Nation Convention on Climate Change (UNCCC) was developed to meet the challenge of climate change. The Kyoto protocol was developed to operationalise the convention. The key element of the Kyoto protocol is its legally binding commitment for 39 industrial countries to reduce their green house gas (GHG) emissions by an average of 5.2 % relative to the 1990 levels. The CDM is the only flexible mechanism that involves developing countries. CDM projects in developing countries can either be projects that reduce emissions, or projects that sequester (bind) carbon through reforestation or afforestation activities. Official development assistance cannot be used to fund CDM projects. Most developing countries lack information about the opportunities, likely costs, benefits and risks associated with carbon projects.

The effect of CDM projects on emission reductions, poverty alleviation and environmental benefits depends, as for other types of projects, on how the projects are planned and implemented. This report shows that CDM projects in relation to land-use activities can be an effective tool for desertification control and rural development provided that due consideration is given to these issues in project planning and implementation. Projects focusing on rehabilitation of forests on degraded land can be of particular interest for desertification control and rural development. Development of CDM projects must therefore be seen in relation to the UN Convention to Combat Desertification and involvement in CDM projects can be a way of financing desertification control.  CDM projects focusing on reforestation and agroforestry can also make people in dryland areas less vulnerable to climate change.