The Clean Development Mechanism established under the Kyoto Protocol allows industrialized Annex I countries to offset part of their domestic emissions by investing in emissions-reduction projects in developing non-Annex I countries. This article analyzes the background，as well as the development and the characteristics of the international and domestic carbon markets. Also，taking the CDM projects of China Three Gorges New Energy Corp. as an example，this article states that the impact that CDM has on the sustainable development of clean energy，which lies in the stimulation of revenue contribution，financing and commercial mode innovation. Finally，this article summarizes the limitations and problems in the operation of CDM at present. Based on the conclusion，the paper gives our expectations to the future international and domestic carbon markets.