Current evaluation practice of the Clean Development Mechanism

Abstract

The Clean Development Mechanism (CDM) is the most quickly evolving of the three flexibility mechanisms1 of the Kyoto Protocol. The first CDM project activities were registered in 2004, i.e. before the Kyoto Protocol went into force, and the first emission reductions were issued in 2005. This paper analyses the current evaluation practise of CDM project activities and comes to the conclusion that the two main CDM goals (the achievement of additional emission reductions and the contribution to sustainable development in the host country) are not awarded equal attention. As the mitigation of GHG emissions is closely linked to the fulfilment of the Kyoto Protocol, an externally accredited entity, the DOE (Designated Operational Entity) has to carry out validation, verification and certification activities. However, no transparent evaluation system has been established for sustainable development. The DNA (Designated National Authority) is in charge of assessing the contribution to sustainability of proposed project activities. As the host countries are sovereign in their decisions, the DNAs are free to assume this task as they find appropriate. Therefore, the quality of evaluation may vary considerably. Although an external ex-ante evaluation is a prerequisite aimed at assuring the quality of the CDM project activities, it actually cannot guarantee a successful implementation. An approach is needed that enables the project developers to design and implement a sustainability strategy for their CDM project activities and to demonstrate their contribution to sustainable development. In addition, it should provide to the DNAs the information needed to evaluate the CDM project activity.