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Enhancing the clean development mechanism through sectoral approaches: definitions, applications and ways forward

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International Environmental Agreements: Politics, Law and Economics Aims and scope Submit manuscript

Abstract

Grave concerns with the Clean Development Mechanism (CDM) have increasingly surfaced in the international climate policy arena. The sectoral approaches described in this paper may be a way to address some of the shortcomings of this Kyoto mechanism. The paper outlines the criticisms that have been raised against the CDM as well as the conflicting interpretations of a sectoral approach and examines in how far it might resolve the mechanism’s perceived shortcomings. Furthermore, it outlines issues that need to be resolved when implementing a sectoral approach: distributing costs and benefits, defining the sector and its baseline, ensuring additionality and tackling procedural issues. A sectoral approach can enable countries to guide their structural development but it also opens up a gap between public and private investment that needs to be addressed before conflicts arise. Sectoral CDM activities may be able to lower transaction costs for projects that otherwise cannot compete in the CDM market and might even pave the way to sectoral greenhouse gas limitation targets in developing countries by establishing the necessary infrastructure for data collection. However, a sectoral CDM cannot be mistaken for a panacea. Some of the mechanism’s problems remain, which highlights the need to establish additional instruments to support Southern countries in furthering sustainable development and embarking on a low-emission trajectory.

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Notes

  1. Throughout this paper, Annex I Party means a Party to the UNFCCC included in Annex I, UNFCCC, which has ratified the Kyoto Protocol and which has a commitment inscribed in Annex B, Kyoto Protocol. The term Non-Annex I Party refers to a Party that has ratified the UNFCCC as well as the Kyoto Protocol but is not included in these Annexes. The usage of these terms is largely consistent with the Marrakesh Accords.

  2. Presentation by Elnar Tilnes of Det Norske Veritas, head of the DOE/AE Forum, at the 23rd meeting of the CDM Executive Board, 22 February 2006.

  3. Personal observation by Wolfgang Sterk at the conference “Renewable Solutions” in Montreal, 1/2 December 2005.

  4. Gold Standard: http://www.cdmgoldstandard.org/projects.php (18 September 2006).

  5. We thank one of the anonymous reviewers for this concluding consideration.

Abbreviations

CDM:

Clean Development Mechanism

CER:

Certified Emission Reduction

COP:

Conference of the Parties to the United Nations Framework Convention on Climate Change

COP\MOP:

Conference of the Parties Serving as Meeting of the Parties to the Kyoto Protocol

CO2 :

Carbon Dioxide

CO2e:

CO2 equivalent

DNA:

Designated National Authority

DOE:

Designated Operational Entity

GHG:

Greenhouse Gas

HFC:

Hydrofluorocarbons

N2O:

Nitrogen Dioxide

UNFCCC:

United Nations Framework Convention on Climate Change

WWF:

Worldwide Fund for Nature

USD:

US Dollar

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Acknowledgements

The authors would like to thank Hermann E. Ott, Thomas Forth and two anonymous reviewers for thier comments and corrections. This paper has been made possible with the support of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety.

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Authors and Affiliations

  1. Research Group Energy, Transport and Climate Policy, Wuppertal Institute for Climate, Environment, Energy, P.O. Box 10 04 80, D-42004, Wuppertal, Germany

    Wolfgang Sterk

  2. Rotterdam School of Management, Erasmus University, Burg.Oudlaan 50, Rotterdam, 3062 PA, The Netherlands

    Bettina Wittneben

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  1. Wolfgang Sterk
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  2. Bettina Wittneben
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Correspondence to Wolfgang Sterk.

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Sterk, W., Wittneben, B. Enhancing the clean development mechanism through sectoral approaches: definitions, applications and ways forward. Int Environ Agreements 6, 271–287 (2006). https://doi.org/10.1007/s10784-006-9009-z

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