The clean development mechanism (CDM) is one of the most hotly debated instruments of carbon governance. This paper evaluates the pros and cons of the CDM from the perspective of emerging economies. The argument presented is that the CDM is a classic case of the need not to "throw the baby out with the bathwater" because, although the mechanism needs reform, it should not be abandoned. Although many problems have rightfully been detected, the CDM is partially successful economically, environmentally and politically regarding its output, its outcome and its impact. This reading of the CDM as a specific form of effective carbon governance is being supported by various examples from the three major host countries of the CDM: namely, Brazil, China and India.