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21 June 2007
GPPi fellow publishes article on governance of the Clean Development Mechanism
Charlotte Streck, Director of Climate Focus B.V. and GPPi fellow published an article in the journal Environmental Liability in June 2007. The article, entitled "The governance of the Clean Development Mechanism: the case for strength and stability" focuses on the Kyoto Protocol's Clean Development Mechanism (CDM) and its role in the global carbon market.
The CDM supplies cost-efficient emission reductions to private and public entities that face greenhouse gas (GHG) emission restrictions. With trades representing a value of more than US$5 billion, the CDM is, after the European emission trading system, the second largest segment of the global carbon market. The articles argues that there is no other treaty which defines a new international commodity; sets the rules on how this commodity can be created, transferred, used; harnesses market forces by creating supply and demand through binding targets; and finally involves the private sector in the implementation of the Mechanism. The Kyoto Protocol makes us embark on an international market experiment, involving a great number of actors who have no or limited experience with or access to international markets, according to the article.
The article also argues that there are very few mechanisms that pioneer the emerging legal discipline of international administrative law in such a perfect manner as the CDM, however, such a Mechanism must be governed by strong institutions independent of any political interference. If we are serious about our commitment to a carbon market, the articles states, it is time to replace the CDM Executive Body with a professional regulatory body. Only if it relies on a code of rules that regulate the rights and obligations of the private entities affected by the decisions of the market regulator, the article concludes, will the CDM make true the promise that is inherent to its design: the creation of the first global environmental market Mechanism.
To read the article, please click here.
To read a related article published in Environmental Liability by Charlotte Streck and David Freestone (Deputy General Counsel, Advisory Services, World Bank, Washington D.C.) entitled "The challenges of implementing the Kyoto Mechanism", please click here.