Volume 1
Global climate change and sustainable development : third report of Session 2001-02 / International Development Committee.
- Great Britain. Parliament. House of Commons. International Development Committee
- Date:
- 2002
Licence: Open Government Licence
Credit: Global climate change and sustainable development : third report of Session 2001-02 / International Development Committee. Source: Wellcome Collection.
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![the Kyoto Protocol. Australia takes a similar position to the US, believing that the Protocol would be damaging to its economy. 68. The Protocol made provision for some market-based mechanisms intended to lessen the potential economic impacts of emission-reduction requirements. These include Joint Implementation, the Clean Development Mechanism, and Emissions Trading. The International Institute for Environment and Development emphasised that the various market mechanisms must deliver sustainable development and address knowledge, technology and resource transfer.” Over the last two decades the focus has shifted from setting broad global targets, through a range of market-based approaches, like taxation and standards-based approaches, to stand-alone economic instruments. The success of any instrument will depend on: « the degree to which it addresses environmental and cost effectiveness; * its flexibility and scope for encouraging innovation; ° its equity; ¢ its openness; and, ¢ its public and political acceptability. 209 The Clean Development Mechanism 69. The Clean Development Mechanism (CDM), defined in article twelve of the Kyoto Protocol, allows developing countries either to start their own mitigation projects or develop such projects jointly with industrialised countries.*!” CDM is still new and the detailed provisions governing how it will work are still being worked out. The only CDM projects so far have been pilot projects. However, of the three mechanisms listed in paragraph 68 it is the one most likely to benefit developing countries; the ground rules for the other mechanisms are still to be established. CDM is intended to help developing countries achieve sustainable development while helping developed countries to reach emissions reduction targets.”'' It is a vehicle for the transfer of clean technology and a stimulus for private investment.*'* 70. Some of the detailed provisions for CDM that are still being worked out relate to funding for adaptation. One proposal is that two per cent of the project be set aside for funding adaptation, although it is unclear if these funds would fully fund projects or supplement other funding. It is unlikely that CDM is going to generate much funding for adaptation in the near future. IIED told us that the absence of the US from the Kyoto Protocol diminished the scope for CDM projects.”!* CDM projects are not likely to be evenly distributed; it is estimated that eighty per cent of projects will go to just a few countries (mainly India, China and Brazil).*!* With low emissions, the countries of sub- Saharan Africa have limited scope for reducing emissions, making it difficult to attract CDM projects. The same barriers that deter foreign direct investment (FDI) are also likely to deter CDM projects from developing countries.*'* Poorer countries are more likely to attract small scale projects rather than large scale investment. The transaction costs associated with CDM could be as high as tens of thousands of pounds and do not vary significantly with the size of projects. This may make small projects economically unviable within the CDM.”'® Conscious of this, the CDM Executive Board set up a panel 208 20 Ev 73 [para 22] *Financing Climate Change: Providing Public Goods, preventing public bads, Dr Peter Newell, Institute of Development Studies (IDS). An abridged version of this paper appears in Financing and Providing Global Public Goods: Expectations and Prospects, prepared for the Ministry of Foreign Affairs, Sweden by IDS. “Ev 139 211By 14 [para 4.7] ont 73 [para 22] waEW 73 [para 22] j ase 14 [para 4.9] Ibid. *16Fy 15 [para 4.10]](https://iiif.wellcomecollection.org/image/b32221356_0001_0046.jp2/full/800%2C/0/default.jpg)
