The Clean Development Mechanism: Local Impacts of a Global System

Executive Summary

The Clean Development Mechanism (CDM) was set up under the 1997 Kyoto Protocol to allow developed countries to buy emissions reductions from developing countries in the form of credits, called Certified Emissions Reductions (CERs). The objectives of the CDM are to help developed countries achieve their climate commitment and to assist developing countries in achieving sustainable development, but evidence on the success of the mechanism is, at best, mixed.

This publication summarizes scientific findings on the climate impacts of the CDM, and concludes that it is unlikely to have reached its objective of producing high-quality credits which can be used to compensate a country’s emissions. Most CDM credits have been issued from projects which would probably have happened anyway, and in some cases the mechanism even set an incentive for companies to increase their production of pollutants in order to generate credits for their destruction.

In addition to its lack of climate benefits, the CDM has also failed to adopt sufficiently stringent safeguards against harms to the environment or local people, especially indigenous communities. This publication presents 4 cases where CDM projects ended up hurting people.

In Uganda, a private company blocked access to land vital for the livelihoods of local communities in order to claim credits for planting forests in that area. In India, a waste incinerator project diverted waste from landfills, where it would get sorted by local informal workers, and burned them in a facility located close to villages. In Chile and Guatemala, hydroelectricity projects exacerbated land right conflicts, destroyed social cohesion within villages, and damaged ecosystems and biodiversity.

While future schemes are being negotiated at various institutional levels, it is important that those designing these mechanisms take stock of the experience with the CDM, and adopt measures to prevent that projects such as the ones described in this publication receive support in the name of fighting climate change.

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The Clean Development Mechanism: Local Impacts of a Global System