The Evolving Role of Carbon Finance in Promoting

19721212

Abstract:
The world is currently negotiating what the international climate change regime will look like after 2012—the year that current greenhouse gas emissions reduction targets expire. Among the key topics that are under discussion are the future emissions targets that may be taken by developed countries, and the need for increased mitigation efforts by developing countries. It is in this context that the future of the Clean Development Mechanism (CDM) is under discussion. Critics claim the scale of reductions it is driving in the developing world is insufficient from a scientific perspective if we are to avoid dangerous climate change, that the project-by-project crediting process is inefficient, and that the reductions being achieved are not “additional”—meaning they would have happened anyway and thus should not be financially supported. Yet, the efficacy of CDM must be examined in the broader context of carbon mitigation in the developing world and the actions that are taking place. This paper aims to examine the role that the CDM has played in promoting renewable energy development in China and wind energy in particular, in order to assess how international carbon finance can best be used to help promote emissions mitigation in the developing world. It also assesses how several options under consideration for reforming the current structure of the CDM are likely to impact wind power development in China in coming years.