While the Clean Development Mechanism (CDM) continues to grow rapidly, there are many critics doubting its climate integrity and its contribution to sustainable development. Against this background, the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU, Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit) commissioned the Wuppertal Institute to conduct a study on the further development of the project-based CDM within the future climate regime. The study focuses on how to foster the CDM’s quality in terms of its contribution to sustainable development and technology transfer, as well as quantitative aspects, that is, the environmental integrity of CDM projects. The aim was to develop concrete recommendations on how to improve the effectiveness of the
CDM in qualitative and quantitative terms. The analysis in this project consists of four main parts:
- First, an analysis of the “CDM Gold Standard” (GS). The aim of this analysis is to assess the robustness this premium label and determine whether elements of the GS could be adopted for the CDM as a whole.
- Second, an analysis of “conventional” CDM projects. The aim of this part is to find further best practice examples of sustainable development benefits and the demonstration of additionality under the conventional CDM.
- Third, an analysis of the approval procedures of the host country Designated National Authorities (DNAs). Here as well the intention is to survey the current practice and if possible identify elements that might be suitable to be adopted for the CDM as a whole.
- Fourth, the report takes into account the proposals for reforming the CDM that have been tabled in the international negotiations and their current status. This analysis in particular aims at assessing to what extent it would be politically feasible to implement the results derived from the aforementioned analysis under the United Nations Framework Convention on Climate Change (UNFCCC). The final chapter presents recommendations on improving the CDM based on the outcomes of the analysis.