Designing the Clean Development Mechanism to meet the needs of a broad range of interests

International climate change negotiations are struggling over the basic design and features of the Clean Development Mechanism (CDM), established in the 1997 Kyoto Protocol to the Framework Convention on Climate Change.

Parties and observers advance three possible implementation models, or architectures, for the CDM – bilateral, multilateral, or unilateral.

These approaches differ in fundamental ways, reflecting preferences for the way CDM investment should take place. Choosing one approach over another will invariably enable some countries to benefit more than others and favor certain project types.

Because of this, some Parties advocate the use of only the approach that best serves their particular national circumstances.

The authors examine the characteristics of the different designs advanced by governments and observers, exploring how an “open architecture” CDM might operate.

• An open architecture would allow different designs to complement one another, enabling the CDM to deliver a broader set of climate and sustainable development benefits.

• This approach reconciles the apparently conflicting visions of the CDM and could help forge a consensus in the climate talks.

• Without an open architecture, consensus could prove elusive and the CDM will struggle to satisfy its high expectations and the diverse interests of the Protocol Parties.