Clean Development Mechanism (CDM)
What is the CDM?
In the context of worldwide climate protection it is important that harmful emissions are reduced. It is not particularly relevant where the damaging emissions are reduced, but that they are actively reduced.
The Kyoto Protocol is an agreement where the signatory states have accepted a binding commitment to specific emissions reduction targets. It has come into force with the ratification by Russia on the 16thof February 2005.
The Kyoto Protocol envisages so-called ‘flexible mechanisms’ through which a country can fulfil its required reduction commitments (as stipulated in the Kyoto Protocol), for example by acquiring emissions certificates from other countries participating in the emissions trading scheme.
One instrument, available within the framework of the Kyoto Protocol, is the Clean Development Mechanism (CDM). Here industrialized countries can invest in projects in threshold and developing countries (DCs) that rely on sustainable development and support climate protection - and in this way acquire credit for their own country’s emissions reduction.
Emissions trading makes it possible to reduce emissions in geographical areas where it is most cost effective.
Interest of European countries
The emissions trading system of the European Union (EU) is in line with Kyoto Protocol regulations, and serves as a preparatory stage for emissions trading as from the year 2008. Around 5 000 enterprises from 21 participating countries in the EU will require licences for the release of carbon dioxide (CO2) into the atmosphere. These licences will only be available in limited numbers, which will be steadily reduced over time. Thus, enterprises will be directly encouraged to either decrease emissions in their own businesses, or to purchase CO2 certificates.
Since the beginning of 2005 a binding CO2emissions certificate trading system, namely the European Emissions Trading System (EETS), has been in place. This system will also help to provide positive impulses for investment in the field of renewable energy sources (RES), as well as the rational use of energy (RUE) in threshold and developing countries. Foreign investment projects in renewable energy or energy efficiency programmes, will help to foster additional sources of income for these threshold and developing countries through the sale of CO2 certificates.
Comprehensive change needed
Although this instrument makes a significant contribution, the CDM alone will not suffice to create a breakthrough for sustainable energy economies in threshold and developing countries. Other energy sector conditions must be improved as well (for example using feed-in laws for RES, cutting back on subsidies for energy supply, increased taxes for fossil fuels).
The German Federal Ministry for the Environment, Nature Protection and Reactor Safety (BMU) has supported this ISES initiative, with events organised in Latin America, and a series of new activities planned.