TAKING ACTION ON SUPPRESSED DEMAND

This policy brief by the LDC Environment Centre, supported by the Climate and Development Knowledge Network (CDKN), argues for the inclusion of 'suppressed demand' in the baseline and monitoring methodologies of the Clean Development Mechanism (CDM). It contends that current CDM methodologies disadvantage Least Developed Countries (LDCs) and African nations by using actual constrained consumption as a baseline, which ignores the unmet needs of poor populations and reduces the volume of tradable carbon credits (CERs). The document outlines the barriers causing suppressed demand and calls for capacity building and the operationalization of guidelines adopted by the CDM Executive Board and the Conference of the Parties (CMP).

• Suppressed demand is defined as the unmet desire to consume a product or service due to barriers such as low income, poor infrastructure, and technology costs. These barriers can act individually or in combination, such as the 'energy cost effect,' which combines physical access issues with high unit costs of existing energy services.
• The Clean Development Mechanism (CDM) currently disadvantages projects in LDCs and African countries because most methodologies use 'actual consumption' (constrained consumption) as the baseline for calculating certified emission reductions (CERs). This approach ignores the fact that consumption would inevitably increase as income or technology penetration rises, resulting in lower carbon credit quantities that are unattractive to investors.
• Including suppressed demand in CDM baselines would increase the number of CERs, making projects more attractive to the private sector and providing direct social benefits to poor groups, such as increased income and improved access to electricity grids and transportation.
• The distribution of registered CDM projects is heavily skewed toward advanced developing countries, with China dominating the Asia and Pacific region, while LDCs and African countries have the lowest number of registered projects.
• The Conference of the Parties serving as a meeting of Parties to the Kyoto Protocol (CMP7) requested the CDM Executive Board to accelerate the implementation of suppressed demand guidelines, specifically prioritizing LDCs, Small Island Developing States (SIDS), and African countries.
• To fully realize the potential of suppressed demand guidelines, the document advocates for fast-tracking capacity building through skills enhancement, institutional strengthening, and the development of application systems for LDCs and African countries.

APA

Climate and Development Knowledge Network (n.d.). TAKING ACTION ON SUPPRESSED DEMAND. https://cdkn.org/sites/default/files/files/CDKN-policy-Paper_190612.pdf

Chicago

Climate and Development Knowledge Network. TAKING ACTION ON SUPPRESSED DEMAND. n.d. https://cdkn.org/sites/default/files/files/CDKN-policy-Paper_190612.pdf.

Wikipedia

{{cite report |author=Climate and Development Knowledge Network |title=TAKING ACTION ON SUPPRESSED DEMAND |url=https://cdkn.org/sites/default/files/files/CDKN-policy-Paper_190612.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climateanddevelopmentknowledgenetworkndtaking, author = {{Climate and Development Knowledge Network}}, title = {{TAKING ACTION ON SUPPRESSED DEMAND}}, institution = {Climate and Development Knowledge Network}, url = {https://cdkn.org/sites/default/files/files/CDKN-policy-Paper_190612.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }