Clean Development Mechanism | CSS General Science & Ability

Question: What were the main objectives of clean development mechanism? Also
explain the reasons for the criticism on Koyoto Protocol by the developed
countries. (General Science & Ability Paper CSS 2016)

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Clean Development Mechanism

The Clean Development Mechanism (CDM) is one of the Flexible Mechanisms defined in the Kyoto Protocol
that provides for emissions reduction projects which generate Certified Emission Reduction units which
may be traded in emissions trading schemes.

The Clean Development Mechanism is defined in Article 12 of the Protocol, and is intended to meet two
objectives:

2. To assist parties not included in Annex I in achieving sustainable development and in

contributing to the ultimate objective of the United Nations Framework Convention on
Climate Change (UNFCCC), which is to prevent dangerous climate change; and
4. To assist parties included in Annex I in achieving compliance with their quantified emission
limitation and reduction commitments. “Annex I” parties are those countries that are
listed in Annex I of the treaty, and are the industrialized countries. Non-Annex I parties are
developing countries.

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Main objectives
The purpose of the Clean Development Mechanism is to promote clean development in developing
countries, i.e., the “non-Annex I” countries. The Clean Development Mechanism is one of the Protocol’s
“project-based” mechanisms, in that the Clean Development Mechanism is designed to promote projects
that reduce emissions. The Clean Development Mechanism is based on the idea of emission reduction
“production”. These reductions are “produced” and then subtracted against a hypothetical “baseline” of
emissions. The emissions baseline are the emissions that are predicted to occur in the absence of a
particular Clean Development Mechanism project. Clean Development Mechanism projects are “credited”

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 Clean Development Mechanism | CSS General Science & Ability

against this baseline, in the sense that developing countries gain credit for producing these emission cuts.

The economic basis for including developing countries in efforts to reduce emissions is that emission cuts
are thought to be less expensive in developing countries than developed countries. For example, in
developing countries, environmental regulation is generally weaker than it is in developed countries. Thus,
it is widely thought that there is greater potential for developing countries to reduce their emissions than
developed countries.

From the viewpoint of bringing about a global reduction in emissions, emissions from developing countries
are projected to increase substantially over this century. Infrastructure decisions made in developing
countries could therefore have a very large influence on future efforts to limit total global emissions. The
Clean Development Mechanism is designed to start off developing countries on a path towards less
pollution, with industrialised (Annex B) countries paying for these reductions.

There were two main concerns about the Clean Development Mechanism. One was over the additionality
of emission reductions produced by the Clean Development Mechanism. The other was whether it would
allow rich, northern countries, and in particular, companies, to impose projects that were contrary to the
development interests of host countries. To alleviate this concern, the Clean Development Mechanism
requires host countries to confirm that Clean Development Mechanism projects contribute to their own
sustainable development. International rules also prohibit credits for some kind of activities, notably from
nuclear power and avoided deforestation.

To prevent industrialised countries from making unlimited use of Clean Development Mechanism, the
framework has a provision that use of Clean Development Mechanism be ‘supplemental’ to domestic
actions to reduce emissions. This wording has led to a wide range of interpretations – the Netherlands for
example aims to achieve half of its required emission reductions. by Clean Development Mechanism. It
treats Dutch companies’ purchases of European Emissions Trading Scheme allowances from companies in
other countries as part of its domestic actions.

The Clean Development Mechanism gained momentum in 2005 after the entry into force of the Kyoto
Protocol. Before the Protocol entered into force, investors considered this a key risk factor. The initial years
of operation yielded fewer Clean Development Mechanism credits than supporters had hoped for, as
Parties did not provide sufficient funding to the EB. This left it understaffed.

The Adaptation Fund was established to finance concrete adaptation projects and programmes in
developing countries that are Parties to the Kyoto project activities and receive funds from other sources.

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