THE CLEAN DEVELOPMENT MECHANISM: LOCAL IMPACTS OF A GLOBAL SYSTEM

The report concludes that the Clean Development Mechanism (CDM) largely failed its objectives of producing high-quality, additional emission reductions and promoting sustainable development. It highlights systemic issues such as a lack of environmental integrity, perverse incentives for pollutant production, and the absence of social safeguards. Through four case studies in Uganda, India, Chile, and Guatemala, the document demonstrates how CDM projects led to land grabs, pollution, and the violation of indigenous and community rights. It recommends that post-2020 climate targets should not use CDM credits and that future mechanisms, such as the Sustainable Development Mechanism under the Paris Agreement, must incorporate binding stakeholder consultations and independent grievance mechanisms.

• The CDM failed to ensure the environmental integrity of its credits, with a 2016 European Commission study finding that 85% of projects had a low likelihood of generating additional emission reductions. This resulted in an increase in global greenhouse gas emissions, including over 650 million tonnes of CO2 in the EU alone.
• The mechanism created perverse incentives where companies increased the production of harmful industrial gases, such as HFC-23, specifically to generate credits by destroying them.
• CDM projects have caused significant social and environmental harm due to inadequate safeguards. In Uganda, the Kachung Forest Project blocked community access to vital land for food and grazing; in India, the Okhla waste-to-energy plant emitted toxic carcinogenic chemicals and undermined the recycling sector; in Chile, the Alto Maipo project damaged the Maipo river basin and divided local communities; and in Guatemala, the Xacbal project restricted access to sacred sites and caused deforestation and landslides.
• The CDM suffered from a dysfunctional market where an oversupply of credits led to price crashes, with CER prices around $0.30 as of October 2018, making the mechanism insufficient for financing many registered projects.
• There is a risk that the large surplus of cheap, non-additional CDM credits could flood future markets, potentially meeting the entire estimated demand for the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) at a cost below €1 per credit.
• The Bagepalli CDM Biogas Programme in India serves as a positive example, improving indoor air quality for 5,500 women and promoting women's empowerment by reducing time spent collecting firewood.

APA

Carbon Market Watch (2018). THE CLEAN DEVELOPMENT MECHANISM: LOCAL IMPACTS OF A GLOBAL SYSTEM. https://carbonmarketwatch.org/wp-content/uploads/2018/10/CMW-THE-CLEAN-DEVELOPMENT-MECHANISM-LOCAL-IMPACTS-OF-A-GLOBAL-SYSTEM-FINAL-SPREAD-WEB.pdf

Chicago

Carbon Market Watch. THE CLEAN DEVELOPMENT MECHANISM: LOCAL IMPACTS OF A GLOBAL SYSTEM. 2018. https://carbonmarketwatch.org/wp-content/uploads/2018/10/CMW-THE-CLEAN-DEVELOPMENT-MECHANISM-LOCAL-IMPACTS-OF-A-GLOBAL-SYSTEM-FINAL-SPREAD-WEB.pdf.

Wikipedia

{{cite report |author=Carbon Market Watch |title=THE CLEAN DEVELOPMENT MECHANISM: LOCAL IMPACTS OF A GLOBAL SYSTEM |date=October 2018 |url=https://carbonmarketwatch.org/wp-content/uploads/2018/10/CMW-THE-CLEAN-DEVELOPMENT-MECHANISM-LOCAL-IMPACTS-OF-A-GLOBAL-SYSTEM-FINAL-SPREAD-WEB.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbonmarketwatch2018clean, author = {{Carbon Market Watch}}, title = {{THE CLEAN DEVELOPMENT MECHANISM: LOCAL IMPACTS OF A GLOBAL SYSTEM}}, institution = {Carbon Market Watch}, year = {2018}, month = oct, url = {https://carbonmarketwatch.org/wp-content/uploads/2018/10/CMW-THE-CLEAN-DEVELOPMENT-MECHANISM-LOCAL-IMPACTS-OF-A-GLOBAL-SYSTEM-FINAL-SPREAD-WEB.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }