Although current schemes do not particularly cater to their inclusion, it is possible for local government and local communities to participate in and benefit from carbon markets. This can be done through the Kyoto Protocol’s Clean Development Mechanism (CDM), which provides for carbon offset projects in developing countries. Local authorities can register and own CDM projects, and earn revenue from the sale of project Certified Emissions Reductions (CERs).
Local governments have independently, or in cooperation with other local entities, set up local and regional carbon schemes on a voluntary basis. While creating and joining these schemes are voluntary, members are then legally bound by the imposed emission caps.
The extent to which carbon offset projects, under both the CDM and the voluntary market, produce local community benefits depends largely on project design and on national priorities. Some carbon offset projects are designed to promote local sustainable development. Other benefits include technological transfer and training in order to implement carbon offset projects, which are often complex.