Clean and sustainable?

An evaluation of the contribution of the Clean Development Mec Clean and sustainable? hanism to sustainable development in host countries

December 2007

The recognition of the problems of climate change led to an intergovernmental negotiating process, which concluded: the UNFCCC in 1992 and the Kyoto Protocol in 1997. Under the Kyoto Protocol, most industrialised countries agreed to limit or reduce their emissions of greenhouse gases (GHGs) vis-à-vis a base year (in most cases 1990). The Protocol introduced, among others, the Clean Development Mechanism (CDM). In the CDM, countries with an obligation to reduce GHGs may, in return for certified emissions reductions (CERs), implement projects that reduce emissions in countries without reduction targets. However, the latter projects must contribute to sustainable development (social, economic and ecological) in the host countries. CDM projects can thus help industrialised countries comply with their Kyoto Protocol commitments and at the same time can help developing countries achieve a path of sustainable development (SD), by transferring clean energy and energy efficient technologies.

The concept of emissions trading on the basis of GHG- emission reducing projects in third countries was first implemented through a pilot phase of Activities Implemented Jointly (AIJ). In 1996, in the build-up to the Kyoto Protocol, the Netherlands Ministry of Foreign Affairs had already created the Netherlands AIJ Fund. Intended as a pilot, the fund was meant to show if and how development and emission reduction goals could be served concomitantly. 12 In order to meet its commitments under the Kyoto Protocol (a reduction of about 200 Mt CO2 -eq.), the Netherlands has the objective to acquire approximately 100 Mt CO2 -eq. emission reduction credits from other countries.

This study evaluates the Netherlands AIJ projects implemented under the Netherlands pilot project programme of 1994-2000 and examines the ‘expected’ contribution to sustainable development of the portfolio of CDM projects the Netherlands as it had emerged durining 2000-2008. The AIJ projects were part of a pilot; their dual aim was simultaneously to contribute to development and to reduce GHGs. The evaluation seeks to improve the understanding of what may be expected from such projects and to elucidate the relation between expectations and actual outcomes. The AIJ projects evaluated were in Costa Rica (wind power), Vietnam (biogas), South Africa (mini-hydro plant), China (sunny greenhouses) and India (Biomass gasifier). In addition, 44 projects in the Dutch CDM portfolio were analysed. The focus is on the contribution of these projects to ‘sustainable development’ in the host countries. Sustainable development can be defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains two key concepts. The first is the concept of ‘needs’: in particular, the essential needs of the world’s poor, to which overriding priority should be given. The second is the idea of limitations imposed by the state of technology and social organisation on the environment’s ability to meet present and the future needs (Brundtland Commission, 1987). The report discerns three dimensions of sustainable development: an ecological dimension, an economic dimension and a social dimension. Because most CDM projects were either still ongoing or had yet to be implemented, the conclusions were based on the ‘expected’ contribution to sustainable development and not on the actual contribution.

The evaluation report was commissioned by IOB Evaluations - Policy and Operations Evaluation Department (the Netherlands Government) and prepared by JIN Climate and Sustainability and Institute for Environmental Studies. The study can be downloaded as follows: pdf297_An_evaluation_of_the_contribution_of_the_Clean_Development_Mechanism_to_sustainable_development_in_host_countries.pdf1.21 MB