Transitioning from the CDM to a clean development fund
This article highlights some of the significant challenges facing the CDM, including low environmental integrity, high transaction costs and the incompatibility of additionality requirements and sustainable energy promotion. The paper looks to wider global developments as its point of departure for considering solutions to these critical, technical challenges and suggests that there should be greater exploration of the merits of using Joint Implementation as the major project mechanism for the world’s largest emitters. Joint Implementation is the natural mechanism for project trading among countries with targets under Kyoto and fits a post–Kyoto vision that includes wider developing country participation in national targets. Moreover, Joint Implementation (particularly Track One Joint Implementation) offers solutions to some of the critical challenges facing the CDM, including its apparent lack of environmental integrity or additionality. The paper also suggests that a Clean Development Fund could be established to directly target sustainable development and poverty reduction in low-emitting, low-growth developing countries, rather than indirectly through the CDM.