As a flexible mechanism contained in Kyoto Protocol, Clean Development
Mechanism (CDM) offers developing countries an opportunity to attract investment in
clean energy technologies and promote sustainable development. After the entry into
force of Kyoto Protocol in early 2005, the CDM gained momentum. However, besides
the emission reduction benefits, the sustainability benefits for developing countries
have been continuously doubted. As one of the largest and fast-growing economies in
the world, China is projected to become the largest greenhouse gas (GHG) emitter by
2025, whereas in the first Kyoto emission period, China has the biggest potential to
reduce its emissions and transact the credits with other developed countries in the
context of the evolving global carbon market.
Based on examining the global carbon market and Chinese CDM activities, the report
analyzes dynamics of the CDM scheme and evaluates China’s performance in current
CDM implementation. The project then analyzes the China’s CDM potential and its
impact on the economic development. Finally, the report provides recommendations
on how China can create synergies to achieve the sustainable development objective
through CDM activities