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Moving on: the clean development mechanism after Kyoto

By Kahlil Lloyd - posted Tuesday, 4 December 2012

Australia recently announced that it will sign up to the Second Commitment Period of the Kyoto Protocol that will likely run from 2013 to 2020 with a number of conditions. Over the next fortnight at the latest round of UN climate talks in Doha, the rules that will govern this new phase are being fleshed out.

However many nations are plagued by commitment issues, with several including Canada, Japan and New Zealand refusing to sign up to the new phase and Russia looks set to join them.

Despite this, Australia has now joined a select group of progressive developed countries and blocs including the European Union, that have overcome their commitment phobia, and in doing so will ensure that the important and effective work of addressing climate change continues.


An essential component of this is that developed countries assume an emission cap. Australia recently announced its target as being 99.5 per cent of 1990 levels, which represents a small dietary cut from fossil fuels of five per cent of 2000 levels.

This is a step in the right direction, albeit a baby one.

Nevertheless, Australia's commitment is not without conditions. One of our main stumbling blocks to signing up to an additional period of Kyoto is that the Clean Development Mechanism (CDM) remains operational.

The CDM was established through the Kyoto Protocol more than a decade ago, with the dual goal of assisting developing countries to achieve sustainable development, and to assist developed countries in meeting their emission reduction commitments.

Essentially, the CDM allows a developed country to invest in a project in a developing country that will reduce greenhouse gas emissions, provided that the reduction is larger than what would have occurred in the absence of that investment. The emissions that are reduced from this project above what would ordinarily have occurred, is then credited and transferable to the developed country to assist them meeting their reduction commitments.

In this sense, the allure of the CDM is that it operates as an emission offsetting mechanism, whereby emission reductions occur where they would be most economically efficient to do so. In other words, the CDM allows a developed country to increase their domestic emissions if it is cheaper for that country to invest in a project in a developing country.


However, the operation of the CDM as an offsetting mechanism is extremely problematic.

For example, the CDM allows for an increase, in real terms, of greenhouse gas emissions as the CDM allows a developed country to increase their domestic emissions, by simply investing in an offsetting project in a developing country.

To counter this going forward, it must be limited to only those countries that have committed to a binding emission cap.

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About the Author

Kahil Lloyd is a member of the Global Voices UNFCCC Australian Youth Delegation and a student at Griffith University’s Honours College.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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