TAKING ACTION ON SUPPRESSED DEMAND

The document examines how 'suppressed demand'—the unmet desire for products or services due to barriers like low income, poor infrastructure, and high technology costs—leads to the underestimation of emission baselines in LDCs and African countries. It argues that because the CDM currently relies on actual (constrained) consumption rather than desired consumption, these regions are marginalized in the carbon market. The author advocates for the operationalization of guidelines adopted by the CDM Executive Board and the Conference of the Parties serving as a meeting of Parties to the Kyoto Protocol (CMP) to incorporate suppressed demand into baselines, which would increase the number of Certified Emission Reductions (CERs) and encourage investment in sustainable development projects in poor regions.

• Suppressed demand occurs when a desire to consume a product or service is not met due to three primary barriers: infrastructure (e.g., inaccessible electricity grids), low income (where basic needs like food are prioritized over energy for lighting), and technology (e.g., the high initial cost of Compact Fluorescent Light bulbs compared to incandescent lamps).
• The distribution of registered Clean Development Mechanism (CDM) projects is skewed toward advanced developing countries, with LDCs and African countries having the lowest number of projects, partly because these regions are less attractive to investors due to constrained energy consumption levels.
• Excluding suppressed demand from CDM baselines results in an underestimation of the baseline emissions, which reduces the quantity of Certified Emission Reductions (CERs) a project can generate, thereby undermining the mechanism's sustainable development objectives in low-income countries.
• To create credible baselines that account for suppressed demand without inflating them, the document suggests establishing a 'minimum service level,' such as setting a baseline based on a desired number of light bulbs for a rural household rather than their actual current usage.
• While the CDM Executive Board (EB) and the CMP (through decisions 2/CMP.5 and 3/CMP.6) have recognized suppressed demand and adopted guidelines for its inclusion in baselines, these actions must be operationalized through fast-tracked capacity building, skills enhancement, and institutional strengthening in LDCs and African countries.
• The inclusion of suppressed demand in carbon market mechanisms would provide social and economic benefits by generating income for poorer groups and encouraging private sector investment in renewable energy, low-emission waste management, and efficient infrastructure.

APA

Climate and Development Knowledge Network (n.d.). TAKING ACTION ON SUPPRESSED DEMAND. https://cdkn.org/sites/default/files/files/CDKN-Technical-Paper_1906121.pdf

Chicago

Climate and Development Knowledge Network. TAKING ACTION ON SUPPRESSED DEMAND. n.d. https://cdkn.org/sites/default/files/files/CDKN-Technical-Paper_1906121.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-Technical-Paper_1906121.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-Technical-Paper_1906121.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }