The Clean Development Mechanism in the future Climate Change Regime

The report assesses the Clean Development Mechanism (CDM), noting significant project attrition and regulatory delays. It highlights the marginalization of Sub-Saharan Africa and the challenges faced by Indian industry, such as stringent additionality tests. The authors propose shifting toward programmatic and sectoral CDMs, suggesting specific reforms for the Chinese steel sector and the use of 'Retirement-CER Obligations' to support the Bali Action Plan.

• The project-based CDM has experienced significant project attrition and regulatory bottlenecks, with registration often taking over 18 months and first CER issuance occurring two years after submission.
• Sub-Saharan Africa has been largely excluded from the CDM, with no CERs issued for any project in the region as of May 2009, despite a technical potential of over 3,200 energy sector projects capable of generating 740 million CERs annually.
• Indian industry faces high transaction costs and a 'logjam' of projects at the registration stage due to insufficient Designated Operational Entity (DOE) capacity and overly stringent additionality requirements, particularly for public sector units.
• Programmatic CDM (PoA) implementation is hindered by rules restricting projects to a single baseline methodology, high validator liability for excluded activities, and restrictive 'de-bundling' rules for small-scale projects.
• For the Chinese iron and steel sector, an absolute emissions target is deemed unrealistic due to rapid production growth and unreliable forecasts; instead, intensity baselines based on specific processing steps (ironmaking-sintering, steel making, and steel rolling) are proposed.
• The authors argue for the removal of investment additionality tests to level the playing field and suggest using 'trend-projection' based on historic measurable parameters to determine 'Business as Usual' (BaU) scenarios.
• To support the Bali Action Plan, the report proposes 'Retirement-CER Obligations,' where developed countries purchase CERs to provide finance for mitigation in developing countries without using them as offsets against their own commitments.

APA

Michaelowa, A., Müller, B., Castro, P., Choudhury, R. R., Dietrich, K., Ghosh, P., Maosheng, D., Mukhopadhyay, S., Okubo, Y., Pandey, N., & Yamba, F. (2009). The Clean Development Mechanism in the future Climate Change Regime. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2014/11/cdm-policy-makers-summary.pdf

Chicago

Michaelowa, Axel, Benito Müller, Paula Castro, Rita Roy Choudhury, Kerstin Dietrich, Prodipto Ghosh, Duan Maosheng, et al. The Clean Development Mechanism in the future Climate Change Regime. Climate Strategies, 2009. https://climatestrategies.org/wp-content/uploads/2014/11/cdm-policy-makers-summary.pdf.

Wikipedia

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BibTeX

@techreport{michaelowa2009clean, author = {Michaelowa, Axel and Müller, Benito and Castro, Paula and Choudhury, Rita Roy and Dietrich, Kerstin and Ghosh, Prodipto and Maosheng, Duan and Mukhopadhyay, Suchismita and Okubo, Yuri and Pandey, Nimisha and Yamba, Francis}, title = {{The Clean Development Mechanism in the future Climate Change Regime}}, institution = {Climate Strategies}, year = {2009}, month = may, url = {https://climatestrategies.org/wp-content/uploads/2014/11/cdm-policy-makers-summary.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }