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Another aspect of CDM that is controversial is the stakeholder consultations process, which takes into account the objections, if any, raised by the local communities for these projects. This process has to be carried out by project developers and is an essential element in identifying whether the proposed project really brings environmental and economic benefits to the local population and contributes to their sustainable development. In order to find out more, Transparency International, an international NGO based at Berlin in Germany, recently conducted a research on how the stakeholder consultations for the CDM projects have been carried out in Mexico and published a report. In an article published on the website of Transparency International, the Executive Director of Transparencia Mexicana, Eduardo Bohorquez and the Coordinator of the Climate Governance Integrity Programme in Mexico, Bruno Brandao present the results of the study. The findings of the research indicate poor execution, lack of proper information and record keeping and non-transparent nature of the stakeholder consultation process.

Source: UNFCCC, Photographer: Fuping Wang CDM Project - 1898: Fujian Jinjiang LNG Power Generation Project, China

Clean Development Mechanism Right Path to a Green Future? by Srinivas Mazumdaru

Clean Development Mechanism (CDM) has been at the forefront of the efforts to combat climate change ever since the Kyoto Protocol, which set binding Green House Gases (GHGs) emissions reduction targets for the industrialized countries, came in to force. The mechanism has been operational since the beginning of 2006 and is recently credited with reducing dangerous greenhouse gas emissions by 1 billion tonnes since its inception. However, it is also mired by controversies, especially due to the alleged lack of transparency in its governance and the irregularities in the stakeholder consultation processes that are mandatory for these projects. CDM provides a way for the developed countries and their

companies to reduce carbon emissions by investing in climate friendly and green technologies in developing and leastdeveloped countries. Countries and companies receive carbon credits known as Certified Emissions Reductions (CERs) from the United Nations Framework Convention on Climate Change (UNFCCC) after these projects are registered by the Executive Board of the CDM. The CDM Executive Board is the body that supervises the mechanism. One CER represents a reduction in the emissions amounting to one tonne of carbon dioxide. These CERs can then be used by the developed countries and companies to comply with their emissions reductions obligations as determined by the Kyoto Protocol.

Aware of the criticism directed at CDM and its governance, the CDM Executive Board has constituted a high level panel to analyze the performance of the mechanism and to make recommendations on how to make the decision-making process more transparent and eliminate the risk of fraud. The panel released its eagerly awaited recommendations recently. Irini Roumboglou, the communications and public information officer for CDM at the UNFCCC explains that “the CDM is a very unique global environmental mechanism that stimulates sustainable development and emission reductions, while at the same time offering developed countries a flexible way to reduce their emissions”

summarizes the idea and the objective behind establishing this mechanism. When questioned about the non-transparent nature of the CDM, she stated that “the high-level panel established to make recommendations on reforming the mechanism and the CDM executive board recognize that the legitimacy of the CDM is at stake and there is a need for the decision making processes to be more transparent. In order to improve transparency the panel recommendations include involving groups from different fields such as science, industry and NGOs, and taking into account their feedback and concerns while making decisions so that wider acceptance is attained. It also recommends increasing the exposure of the decisions and the development of standards to the general public.” Another common accusation leveled against CDM is the lack of public scrutiny and accountability of the Executive Board. Speaking on this issue, Roumboglou noted that “the panel recommends the establishment of an appeals procedure that makes it possible for stakeholders to contest the decisions of the CDM Executive Board.” Although the high-level panel made some useful recommendations on improving the efficiency and the effectiveness of the CDM, it still needs to be seen how many of them would be implemented by the relevant bodies and how far they would prove effective in making the process more transparent. The implementation of these recommendations is critical to the CDMs existence in the future and for its legitimacy for contributing to a green and environmental friendly future..

Her office at Haus Carstanjen in Bonn, where the climate change secretariat of the United Nations is located, is full of pictures and banners of various CDM projects. The caption on one of the banners reads “Using the markets to help countries on a climate-friendly path to development”, which

However, it is alleged that the governance structures of the CDM are non-transparent and the decisions taken by the CDM executive board are not open to critique.

Geographical distribution of CDM Projects worldwide, Source: UNFCCC No. of CDM Projects entering Validation per month, Source: UNFCCC