The Role of CDM Post-2012

The report finds that the Clean Development Mechanism (CDM) has largely failed to meet its core objectives of additionality, sustainable development, and low-carbon technology transfer. In the EU, the use of CDM credits has significantly reduced domestic abatement efforts, potentially increasing global emissions by 30 to 106 million tonnes of CO2eq between 2008 and 2009 due to non-additional projects. The authors argue that the CDM often subsidizes carbon-intensive activities and creates perverse incentives that discourage developing countries from implementing national mitigation policies. To realign results with climate goals, the report proposes limiting project eligibility to those providing long-term sustainable benefits, differentiating crediting periods by project type, and introducing tradable or institutionally procured usage rights within the EU ETS.

• A significant portion of registered CDM projects are non-additional, meaning they would have occurred without CDM support. Estimates suggest between one-fifth and two-thirds of projects are non-additional, partly due to ineffective filtering by Designated Operational Entities (DOE).
• The use of non-additional CDM credits in the EU ETS between 2008 and 2009 is estimated to have increased global emissions by 30 to 106 million tonnes of CO2eq.
• The CDM has not effectively promoted low-carbon development in host countries; it has failed to facilitate significant technology transfer and may discourage the adoption of domestic policies like Nationally Appropriate Mitigation Actions (NAMAs).
• The mechanism has provided substantial financial support to carbon-intensive activities, such as super-critical coal-fired power plants, contributing to carbon lock-in.
• The CDM has negatively impacted domestic abatement in the EU. With a 20% target, CDM use reduces required GHG emissions reductions from 13.8% to 7.5% by 2020 relative to 2005 levels.
• The CDM is not a cost-effective mitigation tool for certain project types. For example, abating all developing HFC-23 would cost approximately €26 million annually, yet Annex I buyers paid between €250 and €750 million through the CDM.
• The CDM has failed to provide broad regional support, with the vast majority of credits generated in a few advanced developing countries (China, India, Brazil, Mexico, and South Korea), while Least-Developed Countries (LDCs) are poorly represented.
• There is an inherent conflict between additionality and sustainable development; projects with higher sustainability performance are more likely to be non-additional.
• The price difference between secondary CERs and EU allowances creates arbitrage rents for EU installations, which are unlikely to be used for mitigation.

APA

Vasa, A., & Neuhoff, K. (2011). The Role of CDM Post-2012. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/Role-of-CDM-Post-2012.pdf

Chicago

Vasa, Alexander, and Karsten Neuhoff. The Role of CDM Post-2012. Climate Policy Initiative, 2011. https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/Role-of-CDM-Post-2012.pdf.

Wikipedia

{{cite report |last1=Vasa |first1=Alexander |last2=Neuhoff |first2=Karsten |title=The Role of CDM Post-2012 |publisher=Climate Policy Initiative |date=January 2011 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/Role-of-CDM-Post-2012.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{vasa2011role, author = {Vasa, Alexander and Neuhoff, Karsten}, title = {{The Role of CDM Post-2012}}, institution = {Climate Policy Initiative}, year = {2011}, month = jan, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/Role-of-CDM-Post-2012.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }