The Clean Development Mechanism (CDM) allows Annex I countries that have ratified the Kyoto Protocol and must meet greenhouse gas reduction targets to do so in part by purchasing emission reductions from projects registered with the United Nations Framework Convention on Climate Change (UNFCCC) in developing countries. These projects, in theory, result in additional emission reductions that would not have occurred otherwise because they rely on the CDM revenues for their existence. The goals of the CDM are to reduce greenhouse gas emissions in the most economical way possible and promote sustainable development. Thus far, the bulk of these emission reductions come from industrial gas mitigation projects. For successful renewable energy CDM project registration and emission reduction issuance into the future, the project must overcome a variety of political, economic, social, and technical barriers. This guide seeks to make these barriers to renewable energy projects in Latin America more well-known as a first step towards better achieving the CDM goal of promoting sustainable development. Some solutions are presented, but this section is limited as a full discussion of these solutions merits another book altogether. The two most important barriers to project development are politically and bureaucratically-related. The first major barrier to CDM project entry in a given country is related to the openness of its electrical sector. Fully privatized electrical sectors are more receptive to Independent Power Producer (IPP) participation. This IPP involvement is necessary because state-run utilities have little incentive to and in some cases cannot by law implement CDM projects. State-run utilities are bound to develop the least-cost project, which, by definition, cannot be a CDM project since it must rely on the emission reduction revenues for its existence. These emission reduction revenues are so new and risky since they must be successfully registered with the UNFCCC that they are not incorporated in state utility least-cost planning processes. Therefore, countries with open electrical sectors that allow IPPs to develop CDM projects typically have the most CDM renewable energy development. The second major CDM barrier is that countries with strong renewable energy incentives or mandates are at a disadvantage since for CDM registration, projects must be additional to what would have occurred otherwise. If a project that is applying for CDM registration helps fill a renewable energy mandate, then its regulatory additionality is put in question. Likewise, if a feed-in tariff for renewable energy makes a project financial viable, then its financial additionality is negated. The CDM Executive Board’s silence on this important issue of additionality has created a perverse incentive for developing countries to do nothing to address climate change. These and a host of other types of barriers are explained in this book.