This project aims to i) assess the merits and shortcomings of the Clean Development Mechanism (CDM) according to a set of criteria, ii) inform action at both UN and EU levels to improve the current CDM system and explore a transition from the CDM to sectoral mechanisms, iii) to address these issues particularly in large hydro and energy intensive sectors. This project is led by AEA in collaboration with CEPS, the Stockholm Environment Institute, and CO2logic.