How do CDM Projects Contribute to Sustainable Development in China? An Assessment of the Performance of the CDM in China

A General Introduction to the CDM  What is the CDM? Definition: The CDM is a Kyoto Protocol financial instrument that allows industries in rich countries to earn certified emission reduction (CER) credits by financing and transferring technology to emission-reduction projects in developing countries. Dual Objectives: 1. Assisting developing countries in achieving sustainable development 2. Assisting developed countries in achieving compliance with their reduction commitments

 How Does the CDM Operate?

 Current Situation of the Development of CDM Projects

 Possible Trends of the CDM in the Post- Kyoto Period 1.The CDM will continue to exist with increasingly completed and strict rules 2.Even if the CDM does no longer exist beyond 2012, there must be more efficient carbon emission reduction instruments replacing the current CDM Reasons: 1. Question about the performance of the CDM on addressing climate change issues 2. Deficiencies in the CDM operational rules and procedures 3. Undisputeable fact of global warming

What Benefits as Well as Pitfalls Would the CDM Bring to China?  China’s Basic National Circumstances Geographic distribution: Large territory / long coastline Population: The largest / low level of urbanization Economic development: Rapid development / low per capita GDP / remarkable disparity in economic development / urbanization process Climatic condition: Extreme weather / poor air quality China’s energy structure: Large energy demand / dominance of coal GHG emissions: Large emissions / low historical and per capita emissions

 Findings 1. Vulnerable to the impacts of sea level rise 2. Challenge of reducing employment pressure 3. More emission space needed to support economic development 4. More energy needed to combat harsh climatic conditions 5. Great efforts needed to improve air quality 6. Considerable pressure to reducing emissions

Benefits of Implementing the CDM in China Environmental Benefits Emission reduction / saving natural resources / air quality improvement Economic BenefitsTechnology transfer / financial support / revenues increase / employment expansion / regional economic disparity reduction Social BenefitsHealth / environmental awareness / living conditions International Status Aspect Benefit Active participation in the CDM

 Pitfalls of Implementing the CDM in China Limit in forming the clean development idea Commercial nature of the CDM Limit in technology transfer and diffusion Complex transfer process Commercial nature of the CDM Private ownership of corresponding technology Negative impact on future low-carbon development L ack of incentives to stimulate technological self-innovation Uncertainty in the post-Kyoto period

Conclusion and Recommendations  The CDM makes a certain contribution to promoting the sustainable development in China. However, it cannot contribute to promoting the sustainable development in the long term  How Provide for Better Implementation of the CDM in China? 1. Clean development idea 2. New promotion system 3. Legal measures 4. Economic measures

THANK YOU ! Xiaoyi Jiang