The CDM has a dual mandate to deliver climate mitigation and sustainability benefits. However, numerous studies and anecdotal evidence show that most CDM projects fail to deliver sustainability benefits.

The reasons for the failure of the CDM to deliver on its dual mandate are numerous. One reason is that host countries define their own sustainability criteria. Developing countries rejected attempts to establish an international sustainability assessment process, arguing that it would violate their national sovereignty.

It is in the interests of the host country to secure as many CDM projects as possible because of the investment they bring. This means that host countries have little or no incentive to require strong sustainability criteria that could dampen investment. The sustainability criteria therefore usually lack specificity, transparency and stringency.

Also, the assessment process that is performed by the host country Designated National Authorities (DNAs) is usually perfunctory. Even in the few countries that have well developed sustainability requirements (such as Brazil), the requirements are undermined by the lack of follow up or verification of the sustainability criteria. Most significantly, sustainability benefits have no financial value in the current system, as only greenhouse gas benefits result in monetary compensation (through the generation of credits). This results in the majority of offsets coming from projects with arguably little or no sustainable benefits (such as industrial gases and large hydro).

Some projects have caused significant harm to the local population such as displacement, job loss and increased pollution. It is unacceptable that a mechanism that was created by the international community to create sustainable development is creating negative consequences for local populations and the environment. The damages caused by CDM projects are often direct violations of the obligations countries have undertaken in other international treaties such as the UN’s human rights treaties, like the International Covenant on Economic, Social and Cultural Rights (more about human rights).

CDM Watch is advocating for:

1. Implementing international sustainable development criteria, including best practice guidelines
2. Implementing detailed, mandatory safeguards, including  do-not-harm assessments to prevent negative environmental and social impacts
3. Introducing sustainable development monitoring plans to assess sustainable development benefits
4. Implementing grievance mechanisms to suspend or exclude projects from the CDM if they fail to comply with do‐not‐harm safeguards
5. Excluding project types that do not uphold UNFCCC goals or that undermine other existing international treaties.