THE Clean Development Mechanism: Making it Operational

The Clean Development Mechanism (CDM) is a facility for trading `certified emission reductions (CERs) between developing and developed countries, thus saving non-renewable carbon emissions by promoting renewable energy, energy efficiency and/or carbon sequestration projects in LDC's. The purpose of the CDM is to help these latter countries meet their obligations under the Kyoto Protocol while at the same time promoting “sustainable” development in the former countries, thereby reducing the build-up of greenhouse gases (GHG). This paper examines the progress in achieving a workable CDM in time for the first commitment period (2008–2012), and the kinds of initiatives that can be pursued in the agricultural, land-use and forestry sector in tropical countries. The critical element for the success of the CDM is the participation of a broad cross-section of buyers (ultimately from developed countries) and sellers (from developing countries) of CERs. Trading is the final step, which starts with project formulation, through successful implementation and then certification. This paper lays out a market-based framework for promoting CDM transactions between private sector project developers and traders and public sector policy makers, with regulators, governed by CDM rules, overseeing the smooth running of the CDM. However, as there are numerous players; it is proposed that trial CDM projects be demonstrated with the support of National/International bodies to iron out the problems and come up with practical solutions so that carbon trading can become a reality. Most rules for the CDM were clarified at the 7th Conference of Parties (CP) in October/November of 2001 in Marrakesh. An executive Board (EB) was appointed and this EB is in charge of proposing workable ground rules to promote the CDM. These have to be submitted for approval by the 8th CP in late 2002. Three broad kinds of projects qualify for the CDM, these are: renewable energy projects that will be alternatives to fossil fuel projects; sequestration projects that offset GHG emissions; and energy efficient projects that will decrease the emissions of GHG. It is possible to have a combination of these initiatives. A fourth type covering GHG reduction is omitted. As elaborated in the text, in order to qualify for the CDM, the proposed projects may have to have additional costs when compared to the alternative(s). Two time frames have been agreed for CDM projects to qualify for the first commitment period, namely 7 years (with an option of two 7-year renewals) and 10 years. Also, for land-use, land-use change and forestry projects only afforestation/reforestation initiatives are recognized as being permissible for the first commitment period. These rules seem rather shortsighted, as forestry and/or renewable energy projects usually require more than 21 years to be fully effective. Also, the major cause of deforestation is clearing land for agriculture, not harvesting wood. Therefore, improving agricultural productivity may be the best way to reduce deforestation and its subsequent release of GHGs. These conditionalities should be re-examined when rules for the second commitment period are decided. However, various agricultural and land-use projects are discussed under the existing guidelines which could qualify as CDM projects in the first period.     

The Role of Development Finance Institutions (DFIs) in␣Promoting the Clean Development Mechanism (CDM) in Africa

This article outlines some of the latest developments and opportunities for development finance institutions¹ (DFIs) to become directly supportive of the Clean Development Mechanism (CDM²) in Africa. In striving to make development financing more environmentally friendly and sustainable, DFIs can play a key role in promoting the CDM on the African continent by providing monetary incentives through their project financing activities; encouraging and facilitating partnerships in support of sustainable development, particularly with reference to the CDM, and; providing technical advice and support to clients with regard to project design, planning and implementation. DFIs have traditionally focused on financing infrastructure and poverty alleviation projects. However, the emergence of the CDM has brought about a shift towards investments in services and products that reduce carbon dioxide emissions and encourage investments in environmentally friendly technologies. This can be ascribed in part to the development of a “carbon market” under the auspices of the Kyoto Protocol that took effect in February 2005. The carbon market and emerging carbon funds are some of the main drivers enabling DFIs to play an increasingly important role in promoting the CDM in Africa.     

A Comparative Study on the Implementation of CDM Projects in India

Since the Clean Development Mechanism(CDM) under the Kyoto Protocol was initiated,China and India have overwhelmingly led other developing countries regarding CDM projects development.A comparative study of the CDM in India and China is conducted as there are many similarities between both India and China with regard to the CDM implementation due to the fact that India is another major developing country with a large population and a potential source of GHG emissions rivaling China in the near future.Through examining the development of and legal issues for CDM projects in India,its experience and lessons regarding developing and managing CDM projects that China can critically learn are discussed.     

The clean development mechanism and community forests in Sub-Saharan Africa: reconsidering Kyoto’s “moral position” on biocarbon sinks in the carbon market

Negotiations of the Kyoto Protocol reached what has been called a moral position on biocarbon sinks which saw important limitations on their use in the Clean Development Mechanism (CDM), the Protocol’s main carbon offset system. After outlining this moral position, this article examines the consequences of these limitations on the viability of community forest participation in the CDM through a case study of three community forests in West Africa. Results suggest that there is significant carbon mitigation potential from forest conservation, reforestation as well as from improved fuelwood cookstoves at the community level. Yet under the current rules of the CDM, little of this overall carbon mitigation potential is able to be realized. Using qualitative research methodologies, it was learned that community respondents showed a pragmatic, yet cautious interest in the CDM while also emphasizing a need for land-use flexibility. The paper closes with a political discussion of the “‘moral position” on biocarbon sinks in the carbon market and concludes with policy recommendations for biocarbon sinks, in both the CDM and REDD, in the post-Kyoto climate change regime.     

Comparison of marginal abatement cost curves for 2020 and 2030: longer perspectives for effective global GHG emission reductions

This study focuses on analyses of greenhouse gas (GHG) emission reductions, from the perspective of interrelationships among time points and countries, in order to seek effective reductions. We assessed GHG emission reduction potentials and costs in 2020 and 2030 by country and sector, using a GHG emission reduction-assessment model of high resolution regarding region and technology, and of high consistency with intertemporal, interregional, and intersectoral relationships. Global GHG emission reduction potentials relative to baseline emissions in 2020 are 8.4, 14.7, and 18.9 GtCO₂eq. at costs below 20, 50, and 100 $/tCO₂eq., corresponding to +19, −2, and −7 %, respectively, relative to 2005. The emission reduction potential for 2030 is greater than that for 2020, mainly because many energy supply and energy-intensive technologies have long lifetimes and more of the current key facilities will be extant in 2020 than in 2030. The emission reduction potentials in 2030 are 12.6, 22.0, and 26.6 GtCO₂eq. at costs below 20, 50, and 100 $/tCO₂eq., corresponding to +19, −2, and −7 %, respectively, relative to 2005. The emission reduction potential for 2030 is greater than that for 2020, mainly because many energy supply and energy-intensive technologies have long lifetimes and more of the current key facilities will be extant in 2020 than in 2030. The emission reduction potentials in 2030 are 12.6, 22.0, and 26.6 GtCO₂eq. at costs below 20, 50, and 100 /tCO₂eq., corresponding to +33, +8, and −3 %, respectively, relative to 2005. Global emission reduction potentials at a cost below 50 $/tCO₂eq. for nuclear power and carbon capture and storage are 2.3 and 2.2 GtCO₂eq., respectively, relative to baseline emissions in 2030. Longer-term perspectives on GHG emission reductions toward 2030 will yield more cost-effective reduction scenarios for 2020 as well.     

CDM Projects under the Kyoto Protocol: A Methodology for Sustainability Assessment – Experiences from South Africa and Uruguay

Under the Clean Development Mechanism (CDM) of the Kyoto Protocol, industrialised countries may finance greenhouse gases mitigation projects in developing countries. The Kyoto Protocol explicitly requires that the CDM shall assist developing countries to achieve sustainable development. However, a clear definition of sustainability for CDM projects is still debatable. MATA-CDM (Multi-Attributive Assessment of CDM Projects) is an approach that facilitates a quantitative assessment of potential projects regarding their contribution to sustainable development. This paper presents applications of MATA-CDM in two different countries. In South Africa, the application was done mainly for academic and demonstrative purposes, whereas in Uruguay it was implemented together with the responsible Designated National Authority (DNA). The work in both countries included the selection of sustainability criteria and measurable indicators. Experts weighted the criteria using personal interviews and a multi-stakeholder workshop. This method was applied to three potential CDM projects in South Africa and one in Uruguay. Results show that under the conditions of this study, the MATA-CDM approach yet fails to yield a perfect quantitative overall sustainability assessment of CDM projects but that several findings could be useful to further develop the approach with the aim to translate the vague term sustainable development to a mainstream project level. Valuable experience was in particular collected with different stakeholder processes to perform criteria weighting.     

可持续发展目标下的清洁发展机制项目评价

清洁发展机制（CDM）是《京都议定书》规定的发达国家和发展中国家之间项目级的合作机制，CDM项目的目标之一是促进发展中国家的可持续发展。在京都议定书最终生效的背景下．CDM项目的开发与能力建设成为热点。本文基于多目标决革理论。讨论CDM促进可持续发展与否的评价方法。以国际最新的研究为基础。作者构建了CDM项目可持续评价的指标化体系。建立了评价过程。并将其应用刭具体的案例——内蒙古辉腾锡勒风电CDM项目的评价中。研究可以为中国的CDM潜在项目的选择、比较和批准等实践活动提供定量的方法和思路。这对于中国成为CDM国际合作中的重要参与者以及促进中国的可持续发展都具有重要的意义。     

How developing countries can engage in GHG reduction: a case study for China

It has been clearly recognized that future global climate change will limit the possibilities for sustainable development in China. To minimize these negative effects, as a practical strategy, we suggest that the Chinese government engage in international cooperation as a key contributor in the prevention of global warming. This suggestion results from numerical estimations of China’s greenhouse gas (GHG) emission trends accompanied with economic growth up to 2100. The results show that China’s gross domestic product (GDP), measured in terms of purchasing power parity (PPP), may overtake the sum of the GDPs of the United States and Canada in 2020. It is predicted that GDP per capita may reach US$20,000 and $80,000 in 2050 and 2100, respectively; meanwhile, CO₂ emissions in China will increase from 6.6 billion tons (in carbon equivalent units) in 1990 to 54.6 billion tons in 2100. This means that the global peak concentration of GHG cannot be practically reduced without significant contributions from China. For international cooperation in mitigating global climate change, we introduce a new option, “per-capita emission restricted by assigned amount,” as an accounting rule for GHG reduction. This baseline classifies global CO₂ reduction actions into three categories: compulsory reduction, self-imposed reduction, and voluntary reduction. We suggest that China contribute to world CO₂ reduction according to the following timetable: voluntary reduction until 2012, self-imposed reduction until 2020, and compulsory reduction from 2020. The simulation results also indicate that China can benefit from this strategy in terms of improvements in its domestic economy and environment, for instance, by reducing fossil fuel consumption and the emission of pollutants.

The benefits of the Kyoto Protocol to developing countries

The Kyoto Protocol relies on incentive-based regulations layered underneath a global cap on net emissions of greenhouse gases. Within the Kyoto Protocol are opportunities and constraints for signatory nations. Of concern to developing nations are the constraints the Kyoto Protocol could place on future growth. We examine the constraints and the opportunities offered to developing countries within the Kyoto Protocol. By identifying the potential costs and benefits the Kyoto Protocol has to offer to developing countries and by examining the incentives each create, we hope to spark serious investigations into ways to minimize the potential costs of entering the Kyoto Protocol and take full advantage of the potential benefits.

Sustainability indicators for clean development mechanism projects in Vietnam

The Clean Development Mechanism (CDM) is one of the flexible instruments of the Kyoto Protocol designed to combat climate change so as to bring advantages to developing countries and developed countries alike. Indeed, CDM projects have a two-fold objective: to offset greenhouse gas emissions and to contribute to sustainable development in the host country. However in many cases, the latter objective appears to be marginalized. This is at least partly due to the difficulties surrounding the definition and the measurement of sustainability, in particular in a developing country context. To assess CDM projects’ contribution to sustainable development in the host country, scholars and practitioners need adapted indicator sets. A set of indicators were developed by way of an iterative Delphi approach amongst selected Vietnamese experts. The Delphi approach allowed a systematic collection of the experts’ judgements on the sustainability indicators through a set of sequentially applied questionnaires, interspersed with feedback from earlier responses. This exercise resulted in the selection of a set of 36 indicators, which emphasise economic efficiency, public health and pollution issues. The exercise yielded a locally supported and context-specific set of sustainability indicators that will allow Vietnamese decision-makers to enhance the sustainability of the approved CDM projects. In the future this set should be continually improved through real-life application and further participation from local stakeholders. This study is a first step in a long-term process towards developing an adapted toolkit for sustainability assessment of CDM projects in Vietnam.     

Technological feasibility and costs of achieving a 50 % reduction of global GHG emissions by 2050: mid- and long-term perspectives

In this article we examine the technological feasibility of the global target of reducing GHG emissions to 50 % of the 1990 level by the year 2050. We also perform a detailed analysis of the contribution of low-carbon technologies to GHG emission reduction over mid- and long-term timeframes, and evaluate the required technological cost. For the analysis we use AIM/Enduse[Global], a techno-economic model for climate change mitigation policy assessment. The results show that a 50 % GHG emission reduction target is technically achievable. Yet achieving the target will require substantial emission mitigation efforts. The GHG emission reduction rate from the reference scenario stands at 23 % in 2020 and 73 % in 2050. The marginal abatement cost to achieve these emission reductions reaches 150/tCO < sub > 2 < /sub > -eq in 2020 and150/tCO₂-eq in 2020 and 600/tCO₂-eq in 2050. Renewable energy, fuel switching, and efficiency improvement in power generation account for 45 % of the total GHG emission reduction in 2020. Non-energy sectors, namely, fugitive emission, waste management, agriculture, and F-gases, account for 25 % of the total GHG emission reduction in 2020. CCS, solar power generation, wind power generation, biomass power generation, and biofuel together account for 64 % of the total GHG emission reduction in 2050. Additional investment in GHG abatement technologies for achieving the target reaches US6.0 trillion by 2020 and US 6.0 trillion by 2020 and US 73 trillion by 2050. This corresponds to 0.7 and 1.8 % of the world GDP, respectively, in the same periods. Non-Annex I regions account for 55 % of the total additional investment by 2050. In a sectoral breakdown, the power generation and transport sectors account for 56 and 30 % of the total additional investment by 2050, respectively.     

A quantitative integrated assessment of pollution prevention achieved by Integrated Pollution Prevention Control licensing

This paper presents an innovative, quantitative assessment of pollution avoidance attributable to environmental regulation enforced through integrated licensing, using Ireland's pharmaceutical-manufacturing sector as a case study. Emissions data reported by pharmaceutical installations were aggregated into a pollution trend using an Environmental Emissions Index (EEI) based on Lifecycle Assessment methodologies. Complete sectoral emissions data from 2001 to 2007 were extrapolated back to 1995, based on available data. Production volume data were used to derive a sectoral production index, and determine ‘no-improvement’ emission trends, whilst questionnaire responses from 20 industry representatives were used to quantify the contribution of integrated licensing to emission avoidance relative to these trends. Between 2001 and 2007, there was a 40% absolute reduction in direct pollution from 27 core installations, and 45% pollution avoidance relative to hypothetical ‘no-improvement’ pollution. It was estimated that environmental regulation avoided 20% of ‘no-improvement’ pollution, in addition to 25% avoidance under business-as-usual. For specific emissions, avoidance ranged from 14% and 30 kt a^− 1 for CO₂ to 88% and 598 t a^− 1 for SO_x. Between 1995 and 2007, there was a 59% absolute reduction in direct pollution, and 76% pollution avoidance. Pollution avoidance was dominated by reductions in emissions of VOCs, SO_x and NO_x to air, and emissions of heavy metals to water. Pollution avoidance of 35% was attributed to integrated licensing, ranging from between 8% and 2.9 t a^− 1 for phosphorus emissions to water to 49% and 3143 t a^− 1 for SO_x emissions to air. Environmental regulation enforced through integrated licensing has been the major driver of substantial pollution avoidance achieved by Ireland's pharmaceutical sector — through emission limit values associated with Best Available Techniques, emissions monitoring and reporting requirements, and performance targets specified in environmental management plans. This compliant sector offers a positive, but not necessarily typical, case study of IPPC effectiveness.     

A heuristic for setting effective standards to ensure global environmental sustainability

Most environmental professionals and decision-makers, and certainly the public at large, hold the view that the integrity of earth’s natural environment will be conserved for posterity and sustainable development achieved if all the nations rigorously enforced their environmental and emission standards. It is argued in this paper that this view, sincerely held by many as an “axiomatic truth,” is mistaken and misplaced. This is because as a biogeochemical entity the Earth has limited self-regenerative capacity (SRC) to cope with anthropogenic pollution, and all kinds of environmental problems ensue when that limit is exceeded. Indeed, mounting environmental problems now occurring on all fronts amply testify to the fact that the limit has already been exceeded. They also provide necessary and sufficient proof that environmental and emission standards have been woefully inadequate for protecting earth’s natural environment and life-support systems. It is argued that true global environmental sustainability will be achieved, paving the way to true global sustainable development, if and only if global environmental and emission standards are set so that global anthropogenic pollution does not exceed the limit of earth’s natural SRC to cope with such pollution. These and related issues are discussed in this paper. A simple mathematical model using basic mathematics is also presented to explain how the phenomenon of “positive feedback” works in some of the environmental problems to exacerbate environmental degradation and progressively to erode nature’s SRC.

国际碳减排活动中的利益博弈和中国策略的思考

博弈论能够解释许多经济活动和国际关系中出现的现象和问题。利用博弈论的相关理论。对《京都议定书》各利益集团之间的利益争斗进行了分析。指出各利益集团之间斗争的内在原因。并对中国在新一轮谈判中的策略提出了一些建议：由于《京都议定书》生效,而美国仍拒绝批准《京都议定书》。并同时抛出自己的减排方案。这必然会引起新一轮的减排博弈。面对美国等一些国家施加的压力,中国在这场新的博弈中要有所准备。提出具有建设性的建议和意见。既要维护中国和大多数发展中国家的利益。又要有助于减排。     

Is the Clean Development Mechanism delivering benefits to the poorest communities in the developing world? A critical evaluation and proposals for reform

This paper explores whether the Clean Development Mechanism (CDM), a flexibility mechanism under the Kyoto Protocol, has contributed to poverty alleviation in countries that host CDM projects. We argue that the CDM should deliver pro-poor benefits to the communities in which projects are established, since poverty alleviation is integral to sustainable development, which is one of the main purposes of the CDM. After briefly discussing the background of the CDM, we discuss assessment difficulties to which research is prone when evaluating CDM projects for alleged sustainable development contributions. Section 4 brings together and analyses available empirical research on the pro-poor benefits the CDM purportedly delivers to host country communities, concluding that the CDM has failed to deliver poverty alleviation. Therefore, without attempting to be exhaustive, we suggest policy reforms that aim to redirect the CDM to those most in need of assistance.     

Economic growth and CO<Subscript>2</Subscript> emissions

This article considers a planner’s optimum control exercise with environmental pollution and derives a testable link between the growth rates of consumption and pollution. The link is then empirically estimated for the case of CO₂ emissions for a sample consisting of the union of top 25 countries in terms of CO₂ emissions, population and per capita GNP. The analysis suggests that the interrelationship between the growth rates of CO₂ emission and economic development is mostly significant for countries that have a high level of CO₂ emissions and population.     

Estimation of the impact of oil palm plantation establishment on greenhouse gas balance

Estimates of emissions indicate that if tropical grassland is rehabilitated by oil palm plantations, carbon fixation in plantation biomass and soil organic matter not only neutralises emissions caused by grassland conversion, but also results in the net removal of about 135 Mg carbon dioxide per hectare from the atmosphere. In contrast, the emission from forest conversion clearly exceeds the potential carbon fixation of oil palm plantings. Forest conversion on mineral soils to promote continued oil palm mono cropping causes a net release of approximately 650 Mg carbon dioxide equivalents per hectare, while the emission from peat forest conversion is even higher due to the decomposition of drained peat and the resulting emission of carbon oxide and nitrous oxide. The conversion of one hectare of forest on peat releases over 1,300 Mg carbon dioxide equivalents during the first 25-year cycle of oil palm growth. Depending on the peat depth, continuous decomposition augments the emission with each additional cycle at a magnitude of 800 Mg carbon dioxide equivalents per hectare. The creation of ‘flexibility mechanisms’ such as the clean development mechanism and emission trading in the Kyoto Protocol could incorporate plantations as carbon sinks in the effort to meet emission targets. Thus, for the oil palm industry, grassland rehabilitation is an option to preserve natural forest, avoid emissions and, if the sequestered carbon becomes tradable, an opportunity to generate additional revenue. Readers should send their comments on this paper to BhaskarNath@aol.com within 3 months of publication of this issue.     

Relationship between carbon emissions and economic development: case study of six countries

There is much discussion within the sustainable development community regarding climate stabilization and particularly, finding environmentally equitable ways to address emission reductions. Knowing the current level of emission is only one variable in this complex picture. While the rate of emissions is clearly a problem, the overall increase in GHG concentration in the atmosphere is ultimately the main driver of anthropogenic warming. Therefore, it is also important to understand the cumulative emissions, those which have taken us to the current condition. This research presents a case study of six countries to compare the emissions per capita and cumulative emissions during the past 200 years. It is known that carbon emissions are closely related to economic activities, but here we show that some countries have reached per capita emissions plateaus at different levels while others are still rising. Specifically, one approach toward socioeconomic development, in terms of energy–economy, reaches a plateau at 10 Mt carbon per person, which the United Kingdom and South Korea have attained. The US occupies another emission regime at 20 Mt carbon per person. Developing economies such as India and China are considerably below these levels, and unless they follow other integrated economic/environmental solutions, they will continue to increase their per capita emissions during development.     

CO2 emissions in German, Swedish and Colombian manufacturing industries

This study evaluates and compares the trends in CO₂ emissions for the manufacturing industries of three countries: two developed countries (Germany and Sweden) that have applied several measures to promote a shift towards a low-carbon economy and one developing country (Colombia) that has shown substantial improvements in the reduction of CO₂ emissions. This analysis is conducted using panel data cointegration techniques to infer causality between CO₂ emissions, production factors and energy sources. The results indicate a trend of producing more output with less pollution. The trends for these countries’ CO₂ emissions depend on investment levels, energy sources and economic factors. Furthermore, the trends in CO₂ emissions indicate that there are emission level differences between the two developed countries and the developing country. Moreover, the study confirms that it is possible to achieve economic growth and sustainable development while reducing greenhouse gas emissions, as Germany and Sweden demonstrate. In the case of Colombia, it is important to encourage a reduction in CO₂ emissions through policies that combine technical and economic instruments and incentivise the application of new technologies that promote clean and environmentally friendly processes.     

Reaching National Kyoto Targets in Germany and Sustainable Development

Within this paper, we analyze the fulfillment of the Kyoto emissions reduction commitment particularly in Germany and its implication on the long-term paths of all macro-variables. Germany, like all other industrial or Annex-B countries, must reduce its emissions by 2010 according to what we call a Kyoto Forever scenario. We specifically investigate tradable permits as reduction measures in a national overlapping generations (OLG) model, where we change the discounting technique by using generation adjusted discounting (GAD) in comparison to conventional OLG discounting. We show that within our model framework Germany is able to develop along growing paths of, for example, gross domestic product (GDP) in sharp contrast to conventional results of OLG simulations. At the same time, current generations must share higher burdens in terms of lower GDP, per capita consumption and employment which can be initially interpreted as contemporary costs for reaching sustainable paths and, second, contributions for internalizing external effects. However, all costs in terms of lower macro-variables for current living generations are re-compensated through higher future values. This effect can be interpreted as an intergenerational application of full cost bearance, or, in other words, the polluter pays principle which is oriented towards sustainability of greenhouse gases abatement.