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The Clean Development Mechanism: too flexible to produce sustainable development benefits?

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  • Charlene Watson
  • Samuel Fankhauser

Abstract

The Clean Development Mechanism (CDM) of the Kyoto Protocol has a dual objective: to encourage low-cost emission reduction and to promote sustainable development in the host countries of CDM projects. The CDM has by and large delivered on the first objective but arguably not on the second. This paper assesses quantitatively the form and prevalence of co-benefits in CDM projects. Adopting a broad definition of sustainable development, the project design documents of 409 projects (10% of the October 2008 project pipeline) were searched for keyword indicators of contributions to economic growth, physical, social and natural capital. Economic growth co-benefits, in the form of employment, constitute the main project co-benefit, with 82% of projects claiming to contribute to employment. Under a stricter sustainable development definition, projects contribute principally to social capital, primarily training (67%), with physical and natural capital gains less prominent. End-of-pipe projects are found to have lower co-benefits than renewable energy or forestry projects in particular. Contrary to common belief, small-scale projects do not appear to provide higher co-benefits than large-scale projects.

Suggested Citation

  • Charlene Watson & Samuel Fankhauser, 2009. "The Clean Development Mechanism: too flexible to produce sustainable development benefits?," GRI Working Papers 2, Grantham Research Institute on Climate Change and the Environment.
    • Handle: RePEc:lsg:lsgwps:wp02
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    Cited by:

    1. Pécastaing, Nicolas & Dávalos, Jorge & Inga, Andy, 2018. "The effect of Peru's CDM investments on households’ welfare: An econometric approach," Energy Policy, Elsevier, vol. 123(C), pages 198-207.
    2. World Bank, 2012. "Carbon Livelihoods : Social Opportunities and Risks of Carbon Finance," World Bank Publications - Reports 18369, The World Bank Group.

    More about this item

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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