CDM

CDM/JI demand with independent commitment

– EU ETS: period to consume 1.4 billion limit is extended from 2012 to 2020
– Non ETS: additional demand of some 700 million credits

• Under an international agreement, demand for CDM/JI will be automatically increased
• Additional credit use of half of the additional reduction effort undertaken by the EU
• Thereby creating additional annual demand in 2020 for over 250 million credits

The CDM in its current design

… is a success in leveraging finance for low-cost abatement projects
… is a rather generous arrangement for CDM supplier countries
… fails to provide necessary incentives for developing countries to take sufficient action and is thus viewed with scepticism in other countries designing domestic carbon markets

Strengthen the environmental integrity of the CDM by moving beyond the project-based offsetting approaches for emerging developing countries
 
– this could include sector-based approaches such as no-lose or binding sectoral targets
– CDM as we know it can continue in some countries (LDCs)

• Improve governance structure of CDM Executive Board
• Enhance contribution to sustainable development and technology transfer

SOURCE