Skip to main content

CDM: Is it a ‘win–win’ strategy for rural poverty alleviation in India?


India is perceived to be one of the most attractive Non-Annex I countries for CDM project development. There are more than 350 projects in the CDM pipeline, largely in the areas of renewable energy, energy efficiency in industries and fossil fuel switching. This paper examines the socio-economic component of sustainable development commitments of the CDM projects to see if they can make any impact on rural poverty in India, since the goal of poverty alleviation lies at the core of the country’s development priorities. The study concludes that CDM is not contributing to rural poverty alleviation to any notable extent. Nearly all the projects have a business orientation and are not directed to the development of rural poor. Even the renewable energy projects will have limited role in up-liftment of the masses below poverty line due to their weak resource base. For CDM to emerge as a “win–win” strategy for poverty alleviation projects should be aimed at the rural communities and designed to accelerate agricultural growth in the rainfed regions of the country.

This is a preview of subscription content, access via your institution.


  1. Ahluwalia MS (1986) Rural poverty, agricultural production and prices: a re-examination. In: Mellor J, Desai G (eds) Agricultural change and rural poverty, Oxford University Press, Delhi, 59–75

    Google Scholar 

  2. Barnes D, Binswanger HP (1986) Impact of rural electrification and infrastructure on agricultural changes: 1966–80. Econ Polit Wkly 21(1):26–34

    Google Scholar 

  3. Begg KG, Parkinson SD, Mulugetta Y, Wilkinson R, Doig A, Anderson A (2000) Initial Evaluation of CDM type projects in Developing Countries, Project Report, Project No. R7305, UK Dept. of International Development,

  4. Bhalla S (1993) Patterns of employment generation. Indian J Labour Econ 36(4):506–524

    Google Scholar 

  5. Bhalla GS, Hazell P (2003) Rural employment and poverty strategies to eliminate rural poverty within a generation. Econ Polit Wkly 16:3473–3484 Aug

    Google Scholar 

  6. Datt G, Ravallion R (1996) Why have some Indian States done better than others in reducing poverty? Policy Research Working Paper No. 1594, World Bank Policy Research Department, Poverty and Human Resource Division, Washington, D.C.

  7. Deaton A (2003) Adjusted poverty estimates for 1999–2000. Econ Polit Wkly 322–326 (25 January)

  8. Deodhar V, Michaelowa A, Krey M (2003) Financing structures for CDM projects in India and capacity building options for EU-Indo collaboration, HWWA Discussion Paper No. 247, Hamburg Institute of International Economics, Germany

  9. Di Giulio E, Migliavacca S, Vaglio A (2003) CDM, FDI and climate change: where foreign direct investment flows and where they should flow. In: International Energy Workshop, IIASA Conference Center, Laxenburg, Austria (Abstract),

  10. Fan S, Hazell P, Thorat S (1999) Linkages between Government Spending, Growth and Poverty in rural India, Research Report No. 110, International Food Policy research Institute, Washington, D.C.

  11. Fenhann J (2006) Overview of CDM pipeline, UNEP Riso Centre,

  12. GOI (2001) Rural poverty alleviation programmes for tenth five year plan: 2002–07, Report of Working Group, Planning Commission, Government of India

  13. GOI (2002) India Vision 2020, Planning Commission, Government of India

  14. GOI (2003) National action plan for operationalising CDM in India, Report of Working Group, Planning Commission, Government of India

  15. Gulati SC (1977) Dimensions of inter-district disparities. Indian J Reg Sci 9(2):196–206

    Google Scholar 

  16. Lok Sabha Secretariat (2004) Sick sugar industry and sugar development fund, Action Taken Report of Govt., Ministry of Consumer Affairs, Food and Public Distribution, Govt. of India

  17. Loong YS & Pearson B (2002) Clean development or development jeopardy? An exploration of risks associated with FDI aspects of the CDM,

  18. Lucas R Jr (1988) On the mechanics of economic development. J Monet Econ 22(3):3–42

    Article  Google Scholar 

  19. Majumdar R (2002) Infrastructure and economic development: a regional analysis, Ph.D. Thesis, Centre for the Study of Regional Development, Jawahar Lal Nehru University, New Delhi

  20. Mathur A, Chattopadhyay S (1997) Rural industrialization and its employment inplications. In: Chadha GK, Sharma AN (eds) Growth, employment and poverty: change and continuity in rural India. Vikas Publishing, New Delhi

  21. Misra VN, Hazell P (1996) Terms of trade, rural poverty, technology and investment: the Indian experience, 1952–53 to 1990–91. Econ Polit Wkly A2–A13 (30 March)

  22. MoP (2006) Rural electrification statistics, Ministry of Power, Government of India,

  23. Morris S (2001) Issues in infrastructural development today: the interlinkages. India infrastructure report 2001: issues in regulation and market structure, Chap. 2, 3i Network, Oxford University Press.

  24. Mukherjee A (1996) Liberalisation, rural wages and employment in India. In: Raghavan, R, Shekhar L (eds) Poverty and employment. New Age International, New Delhi

    Google Scholar 

  25. NCAER (1977) Cost benefit study of rural electrification schemes in MP and UP, Mimeo, National Council of Applied Economic Research, New Delhi

  26. Niederberger AA, Saner R (2005) Exploring the relationship between FDI flows and CDM potential, UNCTAD,

  27. NSSO (2006) Livestock ownership across operational land holding classes in India, 2002–03, NSS Report No. 493, National Sample Survey Organisation, Govt. of India

  28. Pembina (2003) A user’s guide to the CDM. The Pembina Institute, Canada

    Google Scholar 

  29. Rao CHH (1994) Agricultural growth, rural poverty and environmental degradation in India, Chap. 6. Oxford University Press, Delhi

    Google Scholar 

  30. Rao CHH, Gupta DB, Sharma PS (1986) Infrastructural development and rural poverty in India: a cross-sectional analysis. In Mellor J, Desai G (eds) Agricultural change and rural poverty. Oxford University Press, Delhi, pp 95–109

    Google Scholar 

  31. Rao CHH, Ray SK, Subbarao K (1988) Unstable agriculture and droughts: implications for policy. Vikas Publishing, New Delhi

    Google Scholar 

  32. Ravallion M, Datt G (1995) Growth and poverty in rural India, Working paper Series 1405, World Bank, Washington, D.C.

  33. Reddy BS (2003) Overcoming the energy efficiency gap in India’s household sector. Energy Policy 31(11):1117–1127

    Article  Google Scholar 

  34. Romer P (1986) Increasing returns and long-run growth. J Polit Econ 94:1002–1037

    Article  Google Scholar 

  35. Saleth MR (1996) Rural non-farm employment and income in Tamil Nadu: a quantitative analysis at the household level. Indian J Labour Econ 39(2):335–51

    Google Scholar 

  36. Sen A (1996) Economic reforms, employment and poverty: trends and options. Econ Polit Wkly, Special Number, pp 2459–2478 (September)

  37. Sen A (2000) Estimates of consumption expenditure and its distribution: statistical priorities after the NSS 55th Round. Econ Polit Wkly 499–518 (16 December)

  38. Sugiyama T, Yamaguchi K, Yamagata H (2005) CDM in the post Kyoto regime: incentive mechanisms for developing countries to promote energy conservation and renewable energies. Workshop Issue Paper, Mitsubhishi Research Centre, Japan

  39. Sundaram K, Tendulkar SD (2002) Recent debates on database for measurement of poverty in India, Delhi School of Economics,

  40. Sundaram K, Tendulkar SD (2003a) Poverty in India in the 1990s: an analysis of changes in 15 major states. Econ Polit Wkly 1385–1393 (5 April)

  41. Sundaram K, Tendulkar SD (2003b) Poverty among social and economic groups in India in the nineteen nineties, Working Paper No.118, Centre of Development Economics, Delhi School of Economics, New Delhi,

  42. Troni J, Agbey S, Costa PM, Haque N, Hession M, Gunaratne L, Rodriguez H, Sharma A (2002) Moving towards emissions neutral development (MEND). Eco Securities Limited, Oxford, UK,

  43. Wells LT Jr (1993) Foreign direct investment. In: Lindauer DL, Roemer M (eds) Development in Asia and Africa: legacies and opportunities, Chapter 10, International Centre for Economic Growth (ICEG), pp 293–323

Download references

Author information



Corresponding author

Correspondence to Smita Sirohi.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Sirohi, S. CDM: Is it a ‘win–win’ strategy for rural poverty alleviation in India?. Climatic Change 84, 91–110 (2007).

Download citation


  • Biogas
  • Clean Development Mechanism
  • Poverty Alleviation
  • Clean Development Mechanism Project
  • Rural Poor