CDM Watch welcomes the opportunity to provide its views to the CDM Executive Board on strategic improvements in the operation of the CDM as requested by the CMP in its decision 2/CMP.4.

CDM Watch is very concerned about the development of the CDM over the past years and presents these views in light of the CDM’s failure to meet both of its key objectives to support climate change mitigation and sustainable development in developing countries. Highlighting the need to address the poor environmental integrity, little contribution to sustainable development and inequitable geographical distribution of CDM projects, this submission focuses on the following shortcomings:

1. Poor environmental integrity of CDM projects
2. Little contribution to sustainable development
3. Inadequate governance structures of the CDM Executive Board (the Board)
4. Lack of transparency in decision-making
5. Poor performance of Designated Operational Entities (DOEs)

These five main points are key premises for an efficient operation of the CDM. Given that the CDM has grown to a multi-billion dollar market, the Board is de facto a market regulator. To take on this role, the Board, with its non-permanent members, needs to move to a truly supervisory committee and delegate decisions on individual cases to a professional support structure. The impartiality of Board members needs to be addressed and immunity of Board members needs to be guaranteed. The current processes with regard to the documentation and justification of decisions need to be improved and access of UNFCCC accredited observers to the Board and the DNA Forum needs to be granted.

Moreover, lessons learnt from the poor performance of DOEs in the past need to be addressed. Most importantly, the poor environmental integrity and the missing contribution to sustainable development need to be brought back on the agenda.

You can download the complete comment as pdf-file:
Recommendations for the efficiency in the operation of the CDM and opportunities for improvement