Reconciling Environment and Development in the Clean Development Mechanism

Abstract

Providing a mechanism for financial transfers from the North to the South, the Clean Development Mechanism (CDM) aims to fund afforestation projects resulting in both reduced atmospheric carbon dioxide and sustainable development. One attractive feature of the CDM is that unlike other emerging carbon trading schemes it offers a means to promote sustainable development, which in a poor country must include providing poor people with income-earning opportunities. In practice however, the CDM projects may fail to address four issues key to this possibility: ownership, price, transaction costs, and use rights. The failure to address these issues ultimately could lead the CDM to benefit elite landowners at the expense of the poor. However, recognition of this oversight provides opportunities to work with poor communities worldwide to facilitate the collective action required to make the CDM work for them. Such a focus holds the key to ensuring that the CDM achieves the twin objectives of environmental conservation and sustainable development.