Legal and Policy Challenges for the World Economy
Edited by Benjamin J. Richardson, Yves Le Bouthillier, Heather McLeod-Kilmurray and Stepan Wood
Chapter 10: The Deadlock of the Clean Development Mechanism: Caught between Sustainability, Environmental Integrity and Economic Efficiency
Christina Voigt* 1. INTRODUCTION At first sight, the Clean Development Mechanism (CDM)1 tells a story of success. It has rapidly been developing as an important element in international climate policy by providing to industrialized nations a cost-effective means of complying with their greenhouse gas (GHG) reduction commitments in the Kyoto Protocol. By early 2009, there were more than 1,300 registered CDM projects in 50 developing countries, and approximately another 4,500 projects in the project registration pipeline.2 As of early 2009, the registered projects have resulted in some 140 million issued certified emission reductions (CERs). The CDM is expected to generate more than 1.4 billion CERs by the time the first commitment period of the Kyoto Protocol ends in 2012, each equivalent to one tonne of carbon dioxide.3 Despite these encouraging responses so far, it has become clear that the CDM is burdened with structural flaws, which must be dealt with if the mechanism is to achieve long-term climate benefits. These flaws can be linked to the conflicting interests informing the mechanism. The protection of the CDM’s contribution to sustainable development and its environmental integrity, on the one hand, are counterweighted by demands of procedural efficiency and economic feasibility on the other. Because most of the participants in the CDM cycle, such as investors, project developers, host countries and Annex I governments, have a strong interest in realizing low-cost emission reductions and receiving many CERs, this means that ensuring the environmental integrity and contribution to sustainable development of...
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