The Clean Development Mechanism’s Contribution to Sustainable Development A review of the literature

The challenges of how to respond to climate change and ensure sustainable development are currently high on the political agenda among the world’s leading nations. The Clean Development Mechanism (CDM) is part of the global carbon market developing rapidly as part of the Kyoto response towards mitigation of global warming. One of the aims of the CDM is to achieve sustainable development in developing countries, but uncertainty prevails as to whether the CDM is doing what it promises to do. Close to 200 studies on the CDM have been carried out since its birth in 1997 including peer-reviewed articles and reports from the grey literature. However, no overview of the different debates and key issues in the CDM exists. This review of the literature serves to assess the state of knowledge on how the CDM contributes to sustainable development (SD) including poverty alleviation. The main finding of the review is that, left to market forces, the CDM does not significantly contribute to sustainable development. The paper, commissioned by Research Network on Environment and Development (ReNED), will facilitate a discussion during the ReNED conference October 27, 2005, on how to respond to this challenge, the role of aid strategies and recommendations for new research are suggested.