The domestic side of the clean development mechanism: the case of China

Abstract

The clean development mechanism (CDM) has been widely considered a win–win scenario from which both developed and developing countries could benefit. However, in spite of its growing popularity and the increasing number of issued certified emission reductions, CDM has not been effective in reducing greenhouse gas emissions and helping developing countries to achieve sustainable development. By considering the case of China, it appears that, although there are fundamental weaknesses in the institutional design of CDM, it is the host country's domestic conditions that have the biggest impact on CDM's effectiveness. The Chinese government has implemented its own rules and regulations, and addressed the problems in CDM processes in ways that maximise its national interest, whilst preventing non-governmental actors from participating in the policy process. The combination of governmental intervention and weak non-governmental participation has shaped the outcomes of CDM projects in China. The balance between these two domestic factors may be critical in influencing the effectiveness of CDM governance.