Climate change has emerged as a contentious environmental issue, occurring due to increasing concentration of green house gases in atmosphere since the pre industrial times. The cost-effective reduction of GHG emissions to avert the most severe impacts of climate change remains one of the widely accepted priorities for global action. The Kyoto Protocol, adopted under the United Nations Framework Convention on Climate Change in 1997, was designed to address this priority while promoting sustainable development. The report discusses certain salient features on development of methane recovery from wastewater treatment and elucidates their interrelationship. To elaborate the modalities, a case study of a power generation project from two Sewage treatment plants has been incorporated. The objective is to estimate the emission reductions that will be achieved after the implementation of the project activity and hence establish the baseline. It also elaborates on the principle and concept of CDM and how it can help project to become viable by the additional income generated from the CDM component which acts as a driving force for developing nations to promote waste to energy projects.