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CDM and sustainability issues

Short answer

CDM is a Kyoto Protocol mechanism where developed countries invest in developing-country emission-reduction projects and receive CERs. Sustainability issues include ensuring real additional emission cuts, environmental protection, economic benefits and technology transfer, fair social outcomes, and avoiding high costs, leakage, and uneven distribution. Used well, it brings clean technology and finance.

Describe clean development mechanism and sustainability issues for overall development of country.

Clean Development Mechanism (CDM) is a Kyoto Protocol (Article 12) mechanism under which an industrialised country (Annex I) invests in an emission-reduction project in a developing country and gets Certified Emission Reductions (CERs), each equal to one tonne CO₂e, to count towards its target. It has two goals: help developing countries achieve sustainable development, and help developed countries meet commitments cheaply.

How it works

 Annex I country --invests--> Project in
 (buyer of CERs)              host country
        ^                          |
        |                    reduces emissions
        +------ CERs <--- UNFCCC verification

Project steps: design document → approval by host country (DNA) → validation → registration (CDM Executive Board) → monitoring and verification → issue of CERs.

Sustainability issues for overall development

The host country must confirm that the project supports sustainable development. Typical criteria and issues:

  • Environmental: real, measurable and additional reduction of emissions (additionality); no harm to local land, water and biodiversity.
  • Economic: extra investment, technology transfer, jobs, and income from selling CERs; avoiding projects that only benefit foreign firms.
  • Social: benefit to local communities, fair sharing of revenue, no displacement, health improvement (for example biogas).
  • Technological: transfer of clean technology and local capacity building.
  • Issues and criticisms: high transaction cost, complex procedure, the risk of "leakage" and no real additionality, uneven distribution among countries (mostly China and India), and the fall of CER prices after 2012.

Used well, CDM brings clean technology and finance to Nepal-type countries without harming the environment or people.

✓ Answer checked by Claude Opus 5.5 (high effort)

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