A new AEA-led study has provided an in-depth assessment of the integrity of the Clean Development Mechanism (CDM) for the European Commission.

The report, prepared for the Directorate-General for Climate Action (DG Clima), with the support of the Stockholm Environmental Institute (SEI), the Centre for European Policy Studies (CEPS) and CO2logic examines the merits and shortcomings of the international carbon off-setting mechanism and options for its reform. It also considers the potential use of alternative mechanisms.

The CDM allows companies and industrialised countries to offset their emissions by investing in emission reduction projects in developing countries. This study considers options for action at UN and EU level to improve the governance, effectiveness, efficiency and regional distribution of the CDM. It also assesses options to improve the CDM's contribution to sustainable development and technology transfer. The study was made in the context of a transition away from project-based crediting in advanced developing countries, towards sectoral mechanisms and global policies.

In October 2011, the UN based Executive Board of the CDM announced its intention to undertake a wide-ranging review of the CDM, with a view to retooling it to become the key instrument for financing low-carbon development in developing countries after 2012. The findings of the AEA led CDM study are directly relevant to this review.

Published on 16 December 2011, the study can be downloaded from DG Clima's website here, along with the Commission's introductory remarkson the study.

The study is supported by 6 primary briefing papers providing background knowledge on various aspects of the CDM and a preliminary assessment of the approval process for Joint Implementation (Track 1) projects in Annex I countries:

1 Briefing paper "Sustainable Development and Social Equity"

2 Briefing paper "Technology Transfer through the Clean Development Mechanism (CDM)"

3 Briefing paper "Political Lock-in in the context of the CDM"

4 Briefing paper "Governance of the Clean Development Mechanism (CDM)"

5 Briefing paper "Baseline Setting and Additionality Testing within the Clean Development Mechanism (CDM)"

6 Scoping paper "The potential for CDM induced leakage in energy intensive sectors"

Briefing paper "JI Track 1 preliminary assessment"