evidence: Such projects do not represent net emission reductions and can compromise the integrity of programsincluding the ETSthat allow the use of CDM credits for compliance. We also found that the cost- effectiveness and overall scale of emission reductions are limited by the current project approval process, although proposed changes may improve its effectiveness. Key lessons from the CDM include: (1) the resources necessary to obtain project approval may reduce the cost- effectiveness and quality of projects; (2) the need to ensure the credibility of emission reductions presents a significant regulatory challenge; and (3) due to the tradeoffs with offsets, the use of such programs may be, at best, a temporary solution.