Objective: To increase the contributions of the Clean Development Mechanism (CDM) to both sustainable development in developing countries and to emissions reductions from 2008-2012.

Commitment: Leading a group of interested Latin American countries, to design high impact policy-based mitigation activities under the CDM and identify the requirements for implementing and mainstreaming them

Background: The Clean Development Mechanism (CDM) is one of the two project-based flexible mechanisms of the Kyoto Protocol. These mechanisms are designed to make it easier and less costly for industrialized countries to meet the greenhouse gas (GHG) emission reduction targets that they agreed to under the Protocol. The CDM is also mandated to assist developing countries in achieving sustainable development.

Although the CDM is now fully operational under the Kyoto Protocol and has received widespread support, it is still far from delivering its full potential. Current CDM projects tend to be single, isolated attempts at accessing the international emissions reduction market, which fall far short of attempting to de-carbonize the national economy or even a specific sector of the economy in developing countries. Unless the impact of the CDM can be taken further than discrete projects and used to spur climate-friendly policies, the CDM will neither promote transformation in the South, nor will it deliver the level of emissions reductions needed to close the compliance gap of industrialized countries.

The group will propose the opening of the CDM to policy-based, sector wide projects in order to catalyze sectoral transformation through climate-protecting policies and measures. The aim is not to renegotiate the Marrakech Accords, but rather to identify the few key aspects that could be reinterpreted given political will. The challenge is to minimize reinterpretation needs while maximizing the impact of the CDM, and to do so by the end of 2006 so that it can be made operational for the commitment period of 2008-2012.

Partnership Opportunity: All interested parties are invited to join this effort, which could contribute to the success of the Kyoto Protocol.

Update:
November 2005:
Thanks to many able and committed negotiators of both developing and industrialized countries, the First Meeting of the Parties of the Kyoto Protocol, which took place in Montreal, Canada, adopted the decision to allow broad-based programs of activities in the CDM. This will allow developing countries to undertake important sectoral mitigation efforts in the period 2008-2012.