Summary
The Clean Development Mechanism (CDM) is an offset mechanism under the Kyoto Protocol that allows the crediting of emission reductions from greenhouse gas (GHG) abatement projects in developing countries. The CDM has two purposes: it should assist developing countries in achieving sustainable development and help industrialised countries to reduce the costs of greenhouse gas abatement.
Ten years after the adoption of the Kyoto Protocol, the CDM has become an immense global market, having more than 800 registered projects and a value of several billion Euros. In this regard, the CDM has been a great success in developing a new market for GHG emission reduction projects. However, the CDM has also recently been heavily criticised for not delivering on its environmental and sustainable development objectives.
This report assesses the contribution of the CDM to meeting its environmental and sustainable development objectives and provides recommendations for improving the mechanism. The report’s findings are based on a systematic evaluation of 93 randomly chosen registered CDM projects as well as interviews and a literature survey. The report discusses selected areas which are deemed particularly important for achieving its environmental and sustainable development objectives, including: the role and performance of designated operational entities (DOEs) which are responsible for the validation of proposed CDM project activities and the verification of emission reductions; the demonstration of additionality (i.e. the demonstration that the project would not be implemented without the CDM); the contribution of CDM projects to sustainable development; the role of HFC-23 and N2O destruction projects; the participation of stakeholders in the process; the environmental integrity of "policy CDM" and "sectoral CDM"; and options for limiting the use of CDM and JI by Annex I countries and in emissions trading schemes.
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