PROSPECTS OF CDM FOR PROMOTING SUSTAINABLE DEVELOPMENT IN CHINA

The report analyzes the prospects of the Clean Development Mechanism (CDM) for China, highlighting its potential to attract significant foreign investment and advanced energy technology. While short-term benefits include environmental improvements and economic growth, the authors warn of a long-term risk of technology dependence on foreign suppliers if only equipment is transferred rather than R&D and manufacturing capabilities. The study suggests that China's low marginal abatement costs could give it a dominant market share, but emphasizes that sustainable development requires the diffusion of technology and the affirmation of non-obligation participation. Strategic recommendations include enhancing information capabilities, strengthening policy research, and initiating pilot CDM projects in Western provinces.

• The CDM offers China substantial short-term direct benefits, including the potential for significant foreign investment. Based on conservative estimates, investment during the 2008-2012 commitment period could reach US$5.2 billion if no restrictions are placed on Annex I countries.
• China's low marginal abatement costs may allow it to hold a near-monopolistic position in the CDM market, potentially accounting for approximately 60% of the market share.
• There is a significant risk that the CDM could lead to long-term technology dependence if the mechanism only transfers mitigation equipment rather than the core technologies for R&D, design, and manufacturing.
• The report identifies a conflict between the intellectual property rights of investors and the need for technology diffusion, noting that investors often restrain technology from spreading to protect their economic interests.
• Participation in the CDM is unlikely to cause a dramatic increase in China's future marginal abatement costs due to the country's large potential for reduction projects and vast afforestation opportunities.
• Beyond carbon reduction, CDM projects could provide significant indirect benefits to China, including improvements in air, water, and soil quality, as well as social gains like poverty alleviation and rural development.
• To ensure sustainable development, China must insist on several prerequisites in CDM negotiations: the transfer of R&D and manufacturing technology, the creation of a technology diffusion mechanism, and the affirmation that participation does not imply a legally binding emission reduction obligation.
• The report recommends initiating pilot CDM projects specifically in Western provinces to accelerate clean technology transfer and foreign investment in regions with poor infrastructure.

APA

Jin, Y., Liu, X., & Yang, W. (2000). PROSPECTS OF CDM FOR PROMOTING SUSTAINABLE DEVELOPMENT IN CHINA. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/prospects-cdm-sustainable-development-china.pdf

Chicago

Jin, Yunhui, Xue Liu, and Wanhua Yang. PROSPECTS OF CDM FOR PROMOTING SUSTAINABLE DEVELOPMENT IN CHINA. International Institute for Sustainable Development, 2000. https://www.iisd.org/system/files/publications/prospects-cdm-sustainable-development-china.pdf.

Wikipedia

{{cite report |last1=Jin |first1=Yunhui |last2=Liu |first2=Xue |last3=Yang |first3=Wanhua |title=PROSPECTS OF CDM FOR PROMOTING SUSTAINABLE DEVELOPMENT IN CHINA |publisher=International Institute for Sustainable Development |date=August 2000 |url=https://www.iisd.org/system/files/publications/prospects-cdm-sustainable-development-china.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{jin2000prospects, author = {Jin, Yunhui and Liu, Xue and Yang, Wanhua}, title = {{PROSPECTS OF CDM FOR PROMOTING SUSTAINABLE DEVELOPMENT IN CHINA}}, institution = {International Institute for Sustainable Development}, year = {2000}, month = aug, url = {https://www.iisd.org/system/files/publications/prospects-cdm-sustainable-development-china.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }