Can the Clean Development Mechanism (CDM) deliver?

Energy Policy 39 (2011) 1600–1611

Contents lists available at ScienceDirect

Energy Policy

0301-42

doi:10.1

n Corr

E-m

journal homepage: www.elsevier.com/locate/enpol

Can the Clean Development Mechanism (CDM) deliver?

Srikanth Subbarao, Bob Lloyd n

Department of Physics, University of Otago, 730 Cumberland Street, Dunedin, 9016, New Zealand

a r t i c l e i n f o

Article history:

Received 14 September 2010

Accepted 14 December 2010Available online 14 January 2011

Keywords:

Clean Development Mechanism (CDM)

Sustainable development

Energy supply

15/$ - see front matter & 2010 Elsevier Ltd. A

016/j.enpol.2010.12.036

esponding author.

ail address: [email protected] (B.

a b s t r a c t

The paper investigates whether the Clean Development Mechanism (CDM) under the Kyoto Protocol has

played a significant role in the development of rural communities, specifically investigating uptake of

small-scale renewable energy projects. The investigation involved an assessment of 500 registered small-

scale CDM projects under the Kyoto Protocol in terms of their potential impact on the envisaged

sustainable development goals for rural communities. Five case studies from the Indian subcontinent

were also examined.

The paper concludes that the CDM in its current state and design has typically failed to deliver the

promised benefits with regard to development objectives in rural areas. Successful projects were found to

have had good community involvement and such projects were typically managed by cooperative

ventures rather than money making corporations. The paper puts forward a new framework for the

assessment of such benefits in the hope that future projects can be better assessed in this regard. The

key problem, however, remains on how to deal with the inherent contradiction between development

and sustainability.

& 2010 Elsevier Ltd. All rights reserved.

1. Introduction

As of the early 21st century, humanity is in the midst of severalglobal environmental problems, primarily centred on anthropo-genic climate change, due to the addition of large quantities ofuncontrolled CO2 emissions into the atmosphere. These emissionshave resulted from a high dependency on crude oil and other fossilfuels to meet the world’s primary energy demands. At the sametime, the global energy supply is encountering several challengesin terms of long-term sustainability, in particular, depleting fossilfuel reserves.

The global effort to cut emissions has been hampered by thestark difference in energy consumption between the industrialisedand developing countries, wherein the latter have 80% of theworld’s population but consume only 30% of global commercialenergy (IEA, 2006). Several studies (Teske et al., 2007; UnitedNations Development Programme, 2006) indicate that one of themain barriers confronted by rural communities in the developingworld is access to basic, affordable and clean energy services.

Equity issues then suggest that developing countries need toincrease energy supply substantially. Climate change, on the otherhand, suggests that the world needs to reduce conventional energyuse substantially. The only way both can happen is if the developingworld and the developed world make a transition quickly to

ll rights reserved.

Lloyd).

renewable energy. Although there has been a growing recognitionfor renewable energy solutions worldwide (Lloyd and Forest, 2010),for various reasons, the absolute contribution of such technologies toworld energy supply has been very low. One of the prime reasons hasbeen a relatively low level of development of national and interna-tional policies to aid the transition—in other words—governmentalinaction.

One energy transition policy tool has been to bring developingcountries into the Kyoto Protocol, under a flexibility mechanismcalled ‘‘The Clean Development Mechanism’’ or CDM. This mechan-ism has been suggested to have the potential to both mitigateglobal warming and provide renewable energy systems for devel-oping countries (Jotzo, 2004).

Small-scale community based CDM projects, which expandaccess to energy services through the use of local renewable energyresources, are also thought to have had the potential to contributeto local and national development objectives. These objectives inturn are thought to be a crucial factor in meeting the MillenniumDevelopment Goals (MDGs; Brown et al., 2004). It has been thusproposed that the CDM, under the Kyoto Protocol, through itsinnovative carbon financing mechanism, could play a critical role inmaking rural community based RE projects sustainable andreplicable (Richards, 2003; Jotzo, 2004).

This paper, investigates, whether the Clean Development Mechan-ism (CDM) has in reality played a significant role in the development ofrural communities in developing countries, specifically includinguptake of small-scale renewable energy projects. The investigationhas been carried out through assessing the registered small-scale CDM

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S. Subbarao, B. Lloyd / Energy Policy 39 (2011) 1600–1611 1601

projects under the Kyoto Protocol in terms of their potential impact onthe envisaged sustainable development goals, including access toenergy for rural communities.

2. Role of energy in ‘‘sustainable’’ rural development

As discussed by Lloyd and Subbarao (2009), in recent years‘‘sustainable development’’ has become a buzz word extraordinaire,suggesting that the developed countries can maintain advancedlifestyles and the poor countries can emulate the same through makingminor adjustments to appease the environment. The bottom line,however, is that the effect on the environment is underpinned by ourresource use per population multiplied by the population. As suggestedby the ‘‘IPAT’’ equation (impact¼population� affluence� technol-ogy), resource use per population is influenced by the levels ofboth affluence and technology and each of these is underpinned byenergy use (Ehrlich and Holdren, 1971). Addressing the inequitiesbetween the rich and the poor in terms of consumption/affluence toreduce the total impact on the environment is one of the mostimportant issues to face the world community. This paper will addressone side of that issue that is improving the lot of the rural poor. Theother side, specifically that of the rich reducing their level of affluence,will be left for another one.

The UNDP (2001) and Sen (1999) suggest that the key factor forany rural development to take place is to create an environment forpeople to develop their full potential and lead productive andcreative lives in accordance with their specific needs and interests.The concept of rural community development as put forth byAsadi-Lari et al. (2005) and Hope (1996) appears to be a processinvolving a change in the way of living of rural communities. Thisconcept involves a process of social and economic actions forsolving community problems utilising the community’s capabilityand resources for their own development. Community develop-ment in this case can thus be defined as the support provided at thecommunity or the village level to enable people to work togetherfor better well-being through self-help programmes and techni-ques for collaborated community action. As inferred by severalstudies (Markandya and Halsnaes, 2002; Dresner, 2002), a criticalevaluation of the key developmental factors for the rural commu-nities (namely social, environmental and economic) can assist interms of identifying the approaches for assessing the sustainabledevelopment of rural communities.

Health- Using modern energy reduces

exposure to hazardous pollutants - Avoiding drudgery such as collecting

fuel wood improves health condition of, in particular women and children

- Access to electricity enables vaccination and medicine storage by refrigeration

Income- Enterprise development through

electrification creates jobs - Higher productivity due to

mechanised equipments - Access to electricity in rural areas

assists micro-enterprises for income

Fig. 1. Linkages between energ

Although energy services (other than food) are not usually con-sidered as a basic human need, they are considered by researchers,policy makers, aid agencies and civil society organisations as a keyrequirement for moving towards rural development. Several studies(UNDP, 2000; Cavallaro, 2005) have clearly identified the linkagesbetween access to energy services and rural development in terms ofeconomic, social and environmental aspects. The economic benefits ofenergy access have been shown to play a major role in incomegeneration and livelihood development. The studies (UNDP, 2005;Canadian Environmental Network, 2004; WEC, 1999) have alsoconcluded that access to sustainable and affordable energy is necessaryfor reducing poverty, malnutrition and hunger, improving health,increasing levels of literacy and education, and significantly improvingthe lives of women and children in the developing world.

In summary rural development can be facilitated by assistingthe rural and marginalised communities in the developing world tobecome healthy, educated and socially equal. Even though oppor-tunities for income generation can improve the status of thesecommunities, it is evident that energy can play a crucial role interms of creating positive impacts on education, health and genderequality issues among the rural communities. The key linkagesbetween energy and rural development are shown in Fig. 1.

However, if the technologies adopted to accelerate access toenergy have a high environmental impact, then improved access toenergy implies an increased impact on the environment. This linkmeans that the entire development process must eventuallybecome unsustainable. It is only when low impact technologies,that is renewable energy technologies, are used that developmenthas a chance of approaching sustainability. Given the currentsituation in many developing countries it is obvious that there isa need for a major improvement in the quality and quantity ofenergy services for the rural poor, especially in order to achieve theUnited Nations Millennium Development Goals (MDGs) by 2015.Accelerating access to modern energy services for the unprivileged,while at the same time protecting the environment, presents majorchallenges to the concept of sustainability, and there is consider-able urgency as 2015 is not far away.

2.1. Rural Sustainable Development through Renewable Energy Clean

Development Mechanism (RE CDM) projects

Many research studies (Intergovernmental Panel on ClimateChange, 2007; O’Brien and O’Keefe, 2006; Richards, 2003) have

Education - Lighting appliances enables to study

at night - Access to energy improves time

available for studying - Electricity helps to narrow the digital

divide in terms of ICT

Environment- Reduced fuel wood consumption

assist in preventing deforestation - Savings in energy consumption due to

use of efficient equipments - Use of renewable source of energy

helps mitigate climate change

y and rural development.

S. Subbarao, B. Lloyd / Energy Policy 39 (2011) 1600–16111602

discussed and concluded that climate change is likely to dispro-portionately affect the rural poor in the developing world as theyprimarily depend on locally available natural resources for theircontinued existence. Several studies (Michaelis, 2003; Swart et al.,2003; Najam et al., 2003) have also suggested that there is a needfor accelerated development in poor countries using alternativedevelopment paths and incorporating the ancillary benefits ofclimate change policies in order to attain so called sustainabledevelopment. Such initiatives have influenced policy platformswithin the IPCC, including its third assessment report and theWorld Summit on Sustainable Development for assimilating andlinking climate change and sustainable development.

It has been documented (Canadian Environmental Network,2004; Martinot, 2002; Australian Agency for InternationalDevelopment, 2001) that renewable energy can be particularlyappropriate for developing countries. In rural areas, particularly inremote locations, transmission and distribution of energy gener-ated from fossil fuels can be difficult and expensive but on the otherhand producing renewable energy locally can offer a viablealternative with a low environmental impact. In this scenario,renewable energy solutions for village power applications can beeconomic, practical, functional and in some circumstances sustain-able. Lloyd and Subbarao (2009) also argue that a transition torenewable energy is much easier in many developing countries asthe energy demand in rural households especially is much smallerthan in developed country households.

It has also be noted that CDM under the Kyoto protocol, throughits innovative carbon financing mechanism and supporting GHGabatement projects, has the potential to play a critical role inmaking renewable energy and energy efficiency projects sustain-able and replicable in developing and least developed countries. Asproposed by Brunt and Knechtel (2005), small-scale rural renew-able energy projects appear to offer the best prospect for povertybenefits under CDM. The major developmental benefits from small-scale renewable energy CDM projects can include increased incomefrom enterprise development, access to clean water, improvedhealth services and sanitation, security, education and genderbenefits (as women and children spend less time collecting fire-wood and water).

Project experiences (Richards, 2003) from developmental aidagencies have also shown that CDM projects can deliver localdevelopment benefits while contributing to developed countriesefforts to meet their emission reduction targets set under the KyotoProtocol. In particular, renewable energy projects can help localcommunity’s access energy services and expand livelihood oppor-tunities, thereby collectively contributing to poverty alleviationand increasing resilience to climate change. For host countries,such initiatives can also contribute to meeting national develop-ment objectives and strengthen developing countries long-termcapacity to limit emissions. From an international perspective, aCDM that delivers on its dual objectives can contribute to meetingthe priorities of the Millennium Development Goals (MDGs) whilecontributing to the reduction of global GHG emissions.

However, it has also been found that while renewable energy(RE) projects constitute a significant share of projects in the currentCDM pipeline and have (or will) contributed (contribute) toincreased access to clean energy and reduced GHG emissions ona national scale, (Brunt and Knechtel, 2005) local communities inparticular may not benefit from project activities. To defend suchcriticism some analysts (Olsen, 2007) have argued that hostcountries face significant challenges in establishing and applyingsustainable development criteria. It is important to understandthat there is no single, authoritative and universally acceptedapproach or methodology for assessing the sustainable develop-ment benefits applicable to any CDM project regardless of projecttype and location. And of course the theoretical concept of

sustainable development, meaning sustainable growth, is oftensuggested to be an oxymoron (Lloyd and Subbarao, 2009). The hostcountries are the sole decision makers in terms of assessingwhether a CDM project meets sustainability development goalsof the country (Mendis and Openshaw, 2004). This means that thedocumented sustainable development benefits vary considerablyacross the countries, based on their respective developmentpriorities and assessment criteria.

Even though CDM projects explicitly aim to bring dual benefits,in terms of climate mitigation and development in their recipientcountry, several studies suggest that the development benefits areoften more hypothetical than real. The studies (Anagnostopouloset al., 2004; Begg et al., 2003; Fichtner et al., 2002; Huq, 2002;Kolshus et al., 2001) indicate that there is still much uncertaintyconcerning the sustainability of these initiatives. Other studies(Markandya and Halsnaes, 2002; Olhoff et al., 2004; Sutter, 2003),focussing on sustainable assessment impact assessment of theCDM projects, have inferred that the initial assumption of thesustained development benefits through CDM has not beenrealistic. It is also evident from these latter studies that as thesustainable development benefits do not have a monetary value inthe carbon market, the general tendency has been to prioritiseachieving cost-effective reduction of GHGs.

2.2. A framework for the analysis of sustainable development benefits

from small-scale CDM projects

Developing countries have been lured by the rich nations intothe CDM process with high hopes and expectations that the muchawaited sustainable development benefits (investments, technol-ogy transfer and poverty alleviation) would eventuate. There have,however, been concerns regarding the specific modalities andoverly bureaucratic procedures adopted for the management ofCDM projects (Cigaran and Iturregui, 2004).

Although CDM has opened up a large avenue for the projectdevelopers globally in terms of carbon market penetration,this in turn has resulted in substantial pressure on CDM infra-structure and associated agencies. Even with efforts being put onstreamlining CDM, the sheer quantity of projects in the pipeline hasmade the task much more difficult (Wara, 2007). There are severalprojects in the CDM pipeline that are waiting for their turn to beregistered and CERs issued, due to the inefficiencies in terms ofbureaucratic procedures and regulatory hindrances (Capoor andAmbrosi, 2008).

Several studies focusing on assessing the development benefitsof CDM projects have concluded that the initial assumptions of thebenefits obtainable through the CDM process have not beenrealistic (Anagnostopoulos et al., 2004; Begg et al., 2003;Fichtner et al., 2002; Huq, 2002; Kolshus et al., 2001; Markandyaand Halsnaes, 2002; Olhoff et al., 2004; Sutter, 2003). It was alsoobserved from the above studies that CDM projects resulting inlarge emission reductions have not always contributed to thesustainable development aspects of the host countries, especiallyfor the rural poor. This observation has meant that the largeinvestment that has gone into such projects has often givenbenefits primarily to the global community.

In order to obtain an insight into the existing methods availablefor analysis of sustainable development benefits under CDM,research has been undertaken of existing methodologies availableto assess sustainable development impacts of CDM projects. Theexisting methodologies that were assessed included:

�
MEND—moving towards emissions neutral development;South North sustainable development tool; Start-up CDM inAfrican, Caribbean and Pacific countries (Troni et al., 1997)


�
The Gold Standard; Sustainability assessment model (Begget al., 2003) � The sustainable development benefits of Clean Development
Mechanism projects as detailed by Olsen and Fenhann (2008).

Most of the existing approaches were found, however, to be toodifficult and impracticable to be actually implemented, especiallyin the case of rural community based small-scale CDM projects. Inaddition, the approaches were observed to be not comprehensiveand did not include quantifiable indicators to assess the impacts onrural, community based small-scale CDM projects. In addition ananalysis of the above approaches suggested a focus on generalsustainable development objectives on a regional or national leveland that they have often fallen short in terms of addressing theissues of developmental impacts on local communities.

As part of this study, a new framework for analysis of sustain-able development benefits for small-scale CDM projects has beendeveloped, focussing on the role of energy access and associatedenergy services for sustainable development of rural communities.The new framework attempts to build upon two major conceptualframeworks, namely substantive and procedural sustainability, inorder to assess the small-scale CDM projects (Del Rio and Burguillo,2008). The framework also attempts to establish linkages betweenthe sustainability approaches (substantive and procedural) and theendogenous growth approach (Leon et al., 2006).

1 It is to be noted that even though projects like Solar Home Systems, Solar

Thermal Systems, Solar PV and Municipal Solid Waste Processing show a high level

impact (100%) in the analysis results, these values are not easily comparable due to

very few number of projects under these categories (1 or 2 each). As the impact

levels and results for these projects are dependent on one or two project activities

(sample size¼1 or 2), the indicator profile may change completely once the number

of projects registered in those category increases. Hence the analysis does not take

into consideration the impact of the above project categories.

3. Methodology

In order to carry out the analysis, a database for all registeredsmall-scale CDM projects (as of May 2008) was created encom-passing the key project details extracted from the respectivepublically available Project Design Documents (PDDs).

The primary research methodology was to carry out a desktopanalysis of the PDD database, looking for patterns and sustainabledevelopment aspects of registered small-scale CDM projects. Inaddition a small number of case studies were investigated to verifythe PDD documents. The database consisted of five hundred individualPDDs, which were analysed to capture the small-scale CDM projectdetails. The categories of the registered small-scale CDM projectsassessed under the study included projects from biomass energy,methane recovery, composting, energy efficiency, fuel switch, micro/small hydro, solar cooker, solar home system, solar PV, solar thermal,waste heat recovery, wind and municipal solid waste processing.

Further, a case study analysis of five registered CDM projectswas carried out based on the findings from site visit informationand actual data. The analysis was used to compare and verify thefindings from the sustainable development analysis for the selected500 small-scale registered CDM projects (from PDD database) tothe actual developmental benefits delivered on the ground.

The proposed sustainable development indicator grouping,indicator sub-sets, impact assessment factors and the indicatorscoring pattern adopted for analysis are given in Table 1.

The PDDs were chosen as the main data source for the analysisas they have been (presumed) to contain authenticated informa-tion as the documents have been validated by UNFCCC accreditedthird party (the Designated Operating Entity) agencies andapproved by the CDM Executive Board (CDM EB). Also, accessingthe PDDs was relatively straightforward as all the PDDs areavailable for download on the UNFCCC web site (United NationsFramework Convention on Climate Change (UNFCCC), 2009).Further, the Designated National Authorities (DNA) in all the hostcountries issue a formal Letter of Approval to the host country CDMprojects based on the sustainability screening of the respectivePDDs. The DNAs are responsible for overseeing the CDM activitiesin the host countries.

While there are thus some formal cheques in place as men-tioned, there are also several inherent drawbacks associated withconsidering information and data from the PDDs. There is noindependently researched control on the quality of information anddata relevant to the sustainable development aspects in the PDDs.This is because PDDs describe only the potential sustainabledevelopment benefits and not the actual monitored benefitsassociated with the project. In addition, as mentioned earlier, thereis an inherent bias in such documents, especially with sustainabledevelopment objectives, to put forward a project that is likely to beregistered and thus meets the eligibility criteria.

Furthermore, the very use of term ‘‘sustainable development’’ inthe context of assessment of developmental benefits of CDMprojects can be contentious in terms of development lasting orcontinuing over the long term (Daly and Townsend, 1993). It mightbe more appropriate in the case of developing countries to just use‘‘developmental benefits’’ or ‘‘rural development’’ rather thansustainable development benefits; or possibly development ben-efits that minimise environmental damage. To avoid the contentionthat development cannot be sustainable forever (New EconomicsFoundation (NEF), 2010), the latter suggestion is taken in this paperas being synonymous with the ubiquitous term, sustainabledevelopment, as used in the current PDDs.

4. Results

The results from the desktop analysis of the PDD databaseshowed that small-scale CDM projects in general have failed todeliver significant or substantial sustainable development benefitsto the community or region. The results also indicated that localcommunities have not benefited significantly, or in a meaningfulway, from the small-scale CDM project activities. The results fromthe case study analysis of small-scale CDM projects generallyagreed with the results from desktop PDD database analysis,wherein the analysis results suggest that small-scale, communitybased rural renewable energy CDM projects appear to offer the bestprospect for poverty and livelihood benefits under the CDM. Somedifferences did, however, exist between the two types of studies,indicating the necessity of ensuring cross verification by carryingout on the ground investigations.

4.1. Desktop analysis of PDDs

The analysis of the selected 500 registered small-scale CDMprojects was carried out based on the ten indicator groupings asdiscussed earlier. The summary results of the analysis discussed inthis section are based on each indicator grouping.1

Employment: Results from the analysis indicated that apart froma few project sectors (biomass, fuel switch and micro/small hydro)most of the other project sectors did not fare well in terms of havingany beneficial impact under employment generation. On anaverage, around 40% of biomass, micro/small hydro and fuel switchprojects appeared to have had a high impact on the indicator‘‘creation of jobs as supplementary source of income to conven-tional farming’’. These project sectors were also found to have had amedium–high impact in terms of number of jobs created,

Table 1Proposed sustainable development indicators for small-scale CDM projects.

Indicator grouping Indicator sub-sets Scoring

Employment generation � Number of jobs generated (low/medium/high)

� Continuity of generated jobs (short term/long term)

� Jobs generated for young unemployed and women (low/medium/high)

� Jobs generated as supplementary source of income (Yes/No)

� Job switches from farming to project activities sector (low/medium/high)

� Type of jobs created (skilled/unskilled)a

Low (0)

Medium (+1)

High (+2)

Negative effect (�1)

Yes (+2)

No (0)

Short term (+1)

Long term (+2)

Skilled (+2)

Unskilled (+1)

Migration � Impact on halting migration (low/medium/high)

� Reversal in migration trend (Yes/No)

Low (0)

Medium (+1)

High (+2)


Yes (+2)

No (0)

Access to electricity � Share of electricity generated by the project supplied to the local community

(low/medium/high)

� Subsidised electricity to community (Yes/No)

Low (0)

Medium (+1)

High (+2)


Yes (+2)

No (0)

Education � Impact on time spent by the children at schools (low/medium/high)

� Turnaround in number of children attending school (number/low/medium/high)

� Impact on time spent by children studying (low/medium/high)

� Impact on economic benefits to the family by children through assisting in some

income generation activities (low/medium/high)

Low (0)

Medium (+1)High (+2)


Yes (+2)

No (0)

Health � Improved health service delivery in the community (Yes/No)

� Reduced exposure to indoor air pollution (Yes/No)

� Improved access to safe potable water (Yes/No)

Yes (+2)

No (0)

Socio-economic and human

development

� Improvement in the socio-economic prospects of the youth in the community as

a substitute to conventional farming activities (Yes/No)

� Impact on number of social associations created (low/medium/high)

� Improved income generation (low/medium/high)

� Improved food security (Yes/No)

Low (0)

Medium (+1)

High (+2)


Yes (+2)

No (0)

Distribution of benefits � Impacts on marginalised people in the community in terms of income and

employment generation(low/medium/high)

Low (0)

Medium (+1)

High (+2)


Yes (+2)

No (0)

Use of local resources � Use of local resources (physical, human and capital) by the project (Yes/No) Yes (+2)

No (0)

Environmental aspects � Impact on volume of food/crops grown in the community (low/medium/high)

� Impact on community forests in terms of fuel wood saved or increased forest area

(low/medium/high)

� Impact on quality and quantity of water (low/medium/high)

� Impact on local air pollution (including indoor pollution) (low/medium/high)

Low (0)

Medium (+1)

High (+2)


Stakeholder comments and

perception

� Wide range of stakeholders consulted for the project sustainability benefit

discussion (Yes/No)

� Stakeholder perception of the project activity contribution to sustainable

development of community (low/medium/high)

� Adequate mitigation measures proposed by the project developer on stakeholder

concerns (Yes/No)

Low (0)

Medium (+1)

High (+2)

Yes (+2)

No (0)

a Note: It may occur that the higher emphasis given to higher skilled workers may act as a detractor to local inhabitants as the higher skilled worker may come from outside

the local area. On the other hand such migration would seek to reverse the usual migration direction, which is from the rural area to the cities.



continuity and type (skilled/unskilled) of created jobs. The analysisalso found that project sectors such as methane recovery, compost-ing, energy efficiency and wind had a low–medium impact in termsof employment generation and associated benefits. As a whole, theregistered small-scale CDM projects were considered to havegenerated a low–medium beneficial impact (score 0–1) on theemployment generation aspects for the local community andregion (Table 2).

Migration: Only a few projects under the biomass (15%),methane recovery (26%), fuel switch (13%) and micro/small hydro(16%) were found to have created a noticeable impact towardshalting migration for the local community, including reversing themigration trend. Overall, the analysis indicated that the small-scaleCDM projects have a very low level (score 0) of impact on migrationaspects of local community and region (Table 3).

Access to electricity: In terms of beneficial impact due to access toelectricity (sharing the electricity generated by project activity andprovision of providing electricity at subsidised price), thereappeared to be no or very low impact on the local communityand region. Only around 10–20% of projects under biomass, micro/small hydro and wind were seen to contribute marginally towardshaving an impact on both of the indicators on electricity access. Ingeneral, the registered small-scale CDM projects failed to generateany significant beneficial impact (score 0) in terms of improving theelectricity access for the local community (Table 4).

Education: The beneficial impacts on community educationaspects, which were assessed based on the indicators, showed thatmost of the project sectors had low or no impact. A marginal impact(around 5% of the projects) was noticed under biomass projects in

Table 2Summary analysis of potential beneficial impacts on the employment.

Indicator Impact Score

Impact on potential jobs generated by the

project activity

Low–medium 0–1

Continuity of generated jobs Low–medium 0–1

Impact on jobs generated for young

unemployed and women in the

community/region

Low–medium 0–1

Jobs generated as supplementary source of

income to farmers

Low–medium 0–1

Impact on job switches from farming to

project sector activities

Low 0

Types of jobs created Low 0

Overall impact on employmentgeneration

Low–medium 0–1

Table 3Summary analysis of impacts on migration.


Impact on halting migration by the project

activity

Low–medium 0–1

Reversal in migration trend Nil 0

Overall impact on migration Low 0

Table 4Summary analysis of impacts on access to electricity.


Share of electricity generated by the project

supplied to the local community

Low 0

Subsidised electricity to local community Low 0

Overall impact on access to electricity Nil/Low 0

terms of quality time spent at school by children and turnaround innumber of children attending school. Energy efficiency and micro/small hydro projects had a similar low impact (around 5% of theprojects) on time spent by children studying and economic benefitsto the family by children through assisting in some incomegeneration activities during spare time. The overall analysisshowed that the registered small-scale CDM projects had no orvery low beneficial impact (score 0) towards community educationaspects (Table 5).

Health: On the community health front, a small number of theproject sectors appeared to have had minor beneficial impacts.These included improved health service delivery in the case ofcomposting (20%), fuel switch (13%), energy efficiency (11%),micro/small hydro (9%) and wind energy (4%) projects. A marginalimpact (in the range of 2–9%) was also observed in terms of reducedexposure to indoor air pollution and access to safe potable wateramong biomass, methane recovery, energy efficiency and micro/small hydro project sectors. However, in general, the resultssuggested that the small-scale CDM projects had a low level ofimpact in terms of community health service benefits. Based on theanalysis, the potential beneficial impacts of the registered small-scale CDM projects on health and associated services due to theproject activity on the local community were considered to be verylow (score 0; Table 6).

Socio-economic and human development: Based on the analysis,this sector was the only indicator grouping that appeared to show abeneficial impact on the local community and region. All of thesmall-scale CDM project sectors examined showed a markedinfluence in terms of improving the socio-economic and humandevelopment aspects of the people in the community and region. Inparticular, very high impacts (80% of the total number of projects)were observed in most of project sectors in terms of improving theincome generation potential. This result may have been due to thefact that most of the projects made use of the immediately andcheaply available local resources, which in turn appeared to have atemporary socio-economic impact on the community. In general,the impact level on improving the socio-economic and humandevelopment aspects by all the project sectors was considered asmedium–high (score 1–2) (Table 7).

Distribution of benefits: The analysis results indicated that onlybiomass and micro/small hydro projects appeared to have had aminor beneficial impact on marginalised people in the communityin terms of creating income and employment generation

Table 6Summary analysis of impacts on health.


Improved health service delivery in the community Low 0

Reduced exposure to indoor air pollution Low 0

Improved access to safe potable water Low 0

Overall impact on health Low 0

Table 5Summary analysis of impacts on education.


Impact on time spent by the children at schools Low 0

Turnaround in the number of children attending

school

Low 0

Impact on time spent by children studying Low 0

Impact on economic benefits to the family by children

through assisting in some income generation

activities during spare time

Low 0

Overall impact on education Low 0

Table 11Summary analysis of impacts on stakeholder perspectives.


Wide range of stakeholders consulted for the

project sustainability benefit discussion

project

Medium 1

Stakeholder perception of the project

activity contribution to sustainable

development of the community

Low–medium 0–1

Adequate mitigation measures proposed by

the project developer on stakeholder

concerns

Low 0

Overall impact on stake holder perception Low–medium 0–1

Table 12Selected case study projects.

Project Country Data source

Bagepalli CDM Biogas

Programme

India Site visit and email/telephone

communication

e7 Bhutan Micro-Hydro

Power CDM Project

Bhutan Email/telephone

communication with the

project developer and

documentation from

international conference

Samal Grid Connected Hydro India Email/telephone


opportunities, which in turn can assist in terms of contribution topoverty alleviation and distribution of benefits to the community.In general, small-scale CDM projects had no or very low beneficialimpact (score 0) on marginalised people in the community(Table 8).

Use of local resources: Similarly and complementary to theabove, apart from the composting and energy efficiency projects,the rest of the project sectors were found to have utilised locallyavailable resources (physical, human and capital). This tendencyalso implied that most of the small-scale CDM projects wereinclined towards generating a greater impact on the socio-eco-nomic well-being of the community. In general, the registeredsmall-scale CDM projects were found to be highly beneficial (score2) in terms of utilisation of local resources from the local commu-nity (Table 9).

Local environment: The analysis found that, as a whole, most ofthe small-scale CDM project sectors performed very poorly interms of generating beneficial impacts to the local environment.However, a small number (less than 20%) of biomass, compostingand micro/small hydro projects appeared to have potential ben-eficial impacts across the range of indicator sub-sets. In general, thelevel of beneficial impact on the local community and region wasfound to be low (score 0) (Table 10).

Stakeholder perception: On the stakeholder perception front,small-scale CDM projects were observed to have generated a low–

Table 7Summary analysis of impacts on socio-economic and human development.


Impact on improvement in the socio-

economic status within the community

Low 0

Improved income generation High 2

Improved food security Low–medium 1

Overall impact on socio-economic andhuman development

Medium–high 1–2

Table 8Summary analysis of impacts on marginalised people.


Impact on marginalised people in the community in

terms of income and employment

Low 0

Overall impact on distribution of benefits tomarginalised groups

Nil/Low 0

Table 9Summary analysis of impacts on local resources.


Use of local physical, human and capital resources

in the project

High 2

Overall impact on distribution of benefits tomarginalised groups

High 2

Table 10Summary analysis of impacts on environmental aspects.


Impact on volume of food/crops grown in the

community or region

Low 0

Impact on community forests in terms of fuel wood

saved or increased forest area

Low 0

Impact on quality and quantity of water Low 0

Impact on local air pollution Low 0

Overall impact on environmental aspect Low 0

Power Project in Orissa communication with Tribal

NGO, LAYA and

documentation from NGO site

visit and recommendation

submitted to CDM EB

Waste Heat Recovery Project

at Saraikela

India Email/telephone

communication with Tribal

NGO , LAYA and

documentation from NGO site

visit and recommendation

submitted to CDM EB

Bundle of 100 village biomass

gasifier based power plants

totalling 5.15 MW for

Decentralised Energy

Systems India Pvt. Ltd. in

Bihar

India Site visit and email/telephone

communication

medium (score 0–1) impact. This basically implied that eventhough small-scale CDM projects ensured the participation of localcommunity, which provided its views and suggestions on theperceived impact of the project on local populationn and distribu-tion of benefits among the different actors, the impact level was notfound to be very significant (Table 11).

The analysis also found that the project sectors faired quite wellin terms of consultation of local stakeholders in order to discuss anddeliberate on the potential sustainable development benefits bythe project activities. But the stakeholders perceived that theprojects in all the sectors had a medium–low impact in terms ofpotential sustainable development contribution to the community.The impact was found to be low–medium for the proposedmitigation measures on stakeholder concerns.

4.2. Case study analysis

To complement the above desktop analysis and in order toassess the actual ground level sustainable development impacts,detailed case studies of five registered CDM projects (Table 12) withactual field data were carried out. The field data was based on sitevisits to two of the project sites and extensive email and telephonediscussions with stakeholders from the remaining three projects.All of the study sites were in India or the subcontinent.

Fig. 2. Map showing case study locations.


The same set of indicators and the assessment criteria usedearlier to assess the 500 registered small-scale CDM projects wasapplied whilst assessing the sustainable development benefitsfrom the case study projects. The case study projects were usedto make a comparison between the sustainable developmentalbenefits assumed in the PDDs against the actual benefits deliveredon the ground.

The major limitation for the case study analysis was the smallsample size. Only five registered CDM projects were able to beassessed for the actual developmental benefits delivered to thelocal community and region. While this sample represented only1% of the projects (out of 500 registered CDM projects assessed)considered for sustainable development assessment earlier, theresults indicated that there was some cause for concern at takingthe sustainable development objectives assured in PDDs at theirface value.

The findings from the case studies, when combined with theassessment results of the 500 registered CDM projects, were thoughtto be vital in suggesting appropriate recommendations that areenvisaged to influence the future (Post-2012) CDM modalities andprocedures at the international and UNFCCC level (Fig. 2).

4.3. Findings from case study analysis

4.3.1. Bagepalli Biogas CDM Programme

The Bagepalli Biogas Programme CDM project is located in theKolar district of Karnataka state in India. The purpose of the projectactivity was to set up around 5500 biogas plants (digesters) of 2 m3

capacity each for single households. The aim of the project was toreplace the commonly used inefficient wood fired mud stovestechnology with clean, sustainable and efficient biogas. The projectwas a joint initiative of the local communities headed by the CoolieSangha (CS) and Agricultural Development and Training Society(ADATS), and conceived by an NGO—Women for SustainableDevelopment (WSD).

The involvement of local stakeholders (local rural community)in this project was given the highest priority, resulting in themajority of the decisions being taken by the community itself. Theproject activity also benefited the end users in terms of training andcapacity building on operation, maintenance and monitoring ofbiogas digesters, resulting in improved functionality and theamount of carbon revenue generated.

The case study analysis results indicated that the project hasbeen successful (high positive impact) in terms of delivering theenvisaged developmental benefits to the rural community. Theproject has benefited around 5500 poor households. The keysuccess factor for the project has been the active involvement oflocal communities.

4.3.2. Samal Grid Connected Hydro Power CDM project

The ‘‘Samal Grid Connected Hydro Power CDM project is locatedin the rural village of Samal in Angul district of Orissa state in India.The CDM project activity is generation of electricity using hydropower available at Samal barrage in Orissa, India, and subsequentfeeding in the power generated to the Power Trading Corporation(PTC) India grid. The project activity, with an installed capacity of20 MW, generates power to the extent of 105–123 GWh per yearover the crediting period. The project is operated and owned byOrissa Power Consortium Ltd. (a private entity).

The results from this case study analysis unfortunately sug-gested that the project to date has not been very successful in termsof delivering the envisaged benefits as indicated in the PDD. Thelocal community had been assured by the project developer, duringthe initial project stakeholder meeting, of many developmentalactivities (employment, clean water and sanitary facilities, healthcare, community temple, etc.). However, as of early 2010, thecommunity still awaits implementation of most of the promiseddevelopments. It is also important to note that in this case theproject proponent was a private entity and the local communitywas not significantly involved in the project planning and imple-mentation activities.

According to the local community, the project developer wasblatantly negligent in terms of assurances given as compared to thedevelopmental activities actually put in place for the community.Discrepancies included non-supply of free fuel to labourers, nohealth care facilities, non-development of green belt, no permanentemployment for the locals, no drinking water and drainage facilitiesand no temple and road constructed. In general, it appeared fromthe evidence that this particular project had completely failed interms of delivering the assured sustainable developmental benefitsto the local community and region. The differences between thepaper benefits claimed by the PDD and the situation on the groundcould not be more apparent.

4.3.3. e7 Bhutan Micro-Hydro Power CDM project

The ‘‘e7 Bhutan Micro-Hydro Power CDM project’’ is located inChendebji village, almost in the centre of the Kingdom of Bhutan. Itis a micro-hydro power project with a power generation capacity of70 kW for an originally un-electrified Chendebji village in Bhutan.The power generated from the project activity supplies electricityto approximately 50 households, a dispensary and a school in thevillage of Chendebji. The project aims to promote rural electrifica-tion in the Kingdom of Bhutan, where the electrification rateremains as low as 20%. The project has been implemented by e7Fund for Sustainable Energy Development and the Royal Govern-ment of Bhutan in collaboration with the local village community.

The case study analysis found that this project had beensuccessful in terms of delivering the envisaged sustainable devel-opment benefits to the local community as indicated in the PDD.The key lesson learnt from the project was that there was a need for


the stakeholders to be well informed of climate change and relatedimpacts. The PDD template from CDM Executive Board mandatesthe project developer to include information on how comments bylocal stakeholders were invited, a summary of the commentsreceived and how due account was taken of any commentsreceived, The results from the analysis indicate that the projectdeveloper has been successful in taking due account of thestakeholder issues and concerns during project design, implemen-tation and operation.

It is also important to note in this case that the involvement of allstakeholders, especially the local community from planningthrough to operation, appeared to have benefited the communityin terms of taking the ownership of the project. According to theproject developer (the e7 group), the project construction plannersrespected the villagers traditional land uses for farming and animalhusbandry. At the request of the villagers hot water was madeavailable for the families of the villagers at the powerhouseobtained from excess energy produced by the hydro plant. Finally,additional transmission/distribution lines were added to theoriginal project scope to ensure electrification of several remotehouses and a local temple.

The project developer also assisted the local community inpurchasing rice cookers and water boilers for each household in thevillage and has been looking into possibilities for improved cookingand heating stoves and better ventilation at the village school. Thisassistance has directly benefited the women and children in thecommunity in terms of improved and smoke free kitchens,including freeing up time spent on gathering wood.

4.3.4. Waste Heat Recovery project at Saraikela, Kharsavan,

Jharkhand, India

The Waste Heat Recovery project is located in Kuchidih village,P.S. Chandil, Saraikela Kharsavan District, Jharkhand. The projectactivity has installed a 10 MW captive power plant (CPP) forgeneration of electricity by using the heat from the waste gasesoriginating from the reduction kilns. The project is owned andoperated by a private company, M/s Kohinoor Steel Private Limited.

The results from this case study analysis found that theenvisaged benefits in the PDD for this project were more hypothe-tical than real. The key factor to note in this case is that the projectproponent was also a private entity and the local community hadnot been involved in the project development and implementationcycle. Only a few community members had any opportunity toparticipate in the initial project stakeholder meeting, wherein onlythe documented benefits (as indicated in the PDD) to the commu-nity were all highlighted by the project entity as part of fulfilling therequirements for registration of project under CDM.

According to the local community, the negative environmentaland livelihood impacts were due to the high level of particulateemissions from the project, which contained carbon dust, fly ash,charcoal, etc., which settled on the surrounding areas. Theseemissions were found to have had an adverse impact on livelihoodresources, primarily the production of Mahua, Lac and Kendu leaf,which had been sustaining these communities for many years. Thetoxic particulate emissions and subsequent settling on land werealso blamed for loss of pasture land and livestock. The communitywas of the opinion that the paddy production had almost halved, toan extent that it was not considered sufficient for the entire year. Inaddition, the entire fisheries activity, which had a thriving produc-tion from a local freshwater pond before the project, appeared lost.The particulates and carbon dust had settled on the pond floor,which depleted the oxygen levels and thus the pond productivity.

There also appeared to be many discrepancies between thesustainable development benefits indicated in the PDD (which wasalso endorsed by the host country DNA) and the actual delivered

benefits. It is important to note that the emissions and associatedharmful effects on the local environment were basically a result ofthe sponge iron plant itself and are not associated with the wasteheat recovery component of the same. This finding concluded thatadopting an energy efficiency improvement (waste heat recoveryin this case) to an originally polluting project cannot in any wayalter the original ill effects.

4.3.5. Bundle of 100 village biomass gasifier based power plants for

Decentralised Energy Systems India Pvt. Ltd. in Bihar

This project consists of a 100 Village Gasifier bundle CDMproject and is located in various villages in the district of Araria inthe state of Bihar, India. Under this project, the project promoter(DESI Power), in partnership with local community organisations,plans to establish 100 biomass gasification based power plants invarious villages in the District of Araria in the state of Bihar,India. The new plants, mostly rated 50 kWe, and a few rated100 kWe, are envisaged to provide power for micro-industries,energy services and water pumping in villages. The promoters arein partnership with various local co-operatives, societies, non-governmental organisations (NGOs), local individuals and ‘‘GramPanchayats’’ (village local governments), who are interested insetting up their own micro-industries and promoting the economicdevelopment of their villages with electricity generated by renew-able energy.

The case study analysis found that this project appeared to behighly successful in terms of delivering the envisaged sustainabledevelopment benefits to the local community as indicated in thePDD. The project developer ‘‘DESI Power’’ in collaboration with thelocal village communities demonstrated that small-scale CDMprojects can assist in terms of reducing the endemic rural povertythrough generating local employment driven by renewable energybased decentralised power generation using local resources. Theproject was also found to have been able to successfully establishthe concept that rural community renewable energy projects canbenefit the local community in terms of creating local micro-enterprises, businesses and energy services for lighting, waterpumping for irrigation, modern biomass based cooking fuels,drinking water, health care, etc.

Desi Power was found to be active in conducting the trainingand capacity building programmes involving local women andyouth (DESI MANTRA) in order to strengthen the technical com-petency and local project management and control skills. Up untilthe time of the visit, 47 women and men had been trained oncomputer usage, project management, biomass generation andmanagement, management of energy services, accounting andmicrofinance, project profitability and personnel management.According to the project developer the project implementationmodel of Employment and Power (EmPower) Partnership pro-gramme has successfully provided a tested working solution forsimultaneously building renewable energy power generating units,micro-enterprises, businesses and rural energy services in associa-tion with the local village community.

In summary, in three out of the five case studies a reasonableagreement has been found between the case study information andthe assessments based on PDD. With only five case studies thestatistics, however, are not good but the inference might be thataround half of the PDD based assessments can be believed.

Based on the findings from the case study analysis it can also beinferred that the involvement of local stakeholders and commu-nities plays a critical role in terms of achieving and delivering theactual and real sustainable development benefits through CDMprojects. It is also important to note that the two unsuccessful(in terms of not delivering the envisaged sustainable developmentgoals) case study projects (Waste Heat Recovery and Samal Hydro)

Table 13Summary of findings from comparative analysis (based on PDD and case study analysis results) of case study projects.

Case study projects Overall agreement on degree ofsustainable developmentimpactsa

Summary of findings

Bagepalli CDM Biogas Programme High The comparative analysis indicates that the assessment of sustainable development

benefits for the project based on the PDD information agrees reasonably well with the

analysis results from case study assessment

It can also be inferred that the project has been successful in terms of delivering the

promised developmental benefits as mentioned in PDD to the local community. This

result can be attributed to the active involvement of the local community during

project planning and implementation process, which has been instrumental in

identifying and incorporating the actual developmental needs for the community in

PDD

e7 Bhutan Micro-Hydro Power

CDM Project

High The comparative assessment indicates that the project adhered substantially to the

commitment made in PDD in terms of delivering the assured developmental benefits to

the local community. This inference is supported by the similarities in the sustainable

development impact scoring for PDD and case study analysis assessment results

The analysis also shows that the project has been successful in terms of delivering the

envisaged sustainable development benefits to the local community as indicated in

PDD. The case study assessment results also support the fact that the involvement of all

stakeholders, especially the local community from planning through to operation, has

benefited the community in terms of delivering positive developmental impact during

the post-project implementation period

Samal Grid Connected Hydro

Power Project in Orissa

Low The results from the case study analysis provide a completely different picture of the

developmental impact through the project as compared to the results from the PDD

analysis. PDD lists out and envisages an ambitious developmental plan for the

community in terms of employment, health, micro-enterprises, environment and so

on. By contrast, the case study results strongly disagree with the assurances made in

PDD

The results from the PDD analysis based on the indicator groupings and sub-sets lead to

the inference that the project has had a positive developmental impact. However, the

case study analysis suggests that most of the assurances made by the project developer

in terms of development were never fulfilled, so much so that the project has negative

impacts on the local community. The degree of variation in sustainable development

impacts between PDD and case study analysis is quite significant across the whole

range of indicators used

The project activity appeared to be more business oriented (feeding electricity

generated to the national grid for monetary returns) than supporting the development

of local community and region as promised in PDD. This latter aspect was also quite

obvious from the fact that the local community had been totally sidelined during and

after the project implementation

Waste Heat Recovery Project

at Saraikela

Low The comparative assessment signifies the project has fallen short in terms of fulfilling

the assurances made in PDD on supporting the local community in moving towards

improved livelihoods and socio-economic development. The actual developmental

impacts on ground are nowhere near the assured developmental goals, as seen in the

impact scoring analysis based on PDD and the actual case study analysis

In summary, it appears that the project has not succeeded in delivering the envisaged

benefits indicated in PDD. The project proponent as a private entity has not involved

the local community stakeholders in the project planning and implementation process.

The project has had a negative impact on the local environment and livelihoods of the

local community. The local community is not very content with the post-project

implementation impacts. There appear to be too many discrepancies between the

sustainable development benefits indicated in PDD, which is also endorsed by the host

country DNA and the actual delivered benefits

Bundle of 100 village biomass

gasifier based power plants

totalling 5.15 MW for

Decentralised Energy Systems

India Pvt. Ltd. in Bihar

High The comparative assessment indicates that the project has been by and large successful

in terms of delivering the assured developmental benefits to the local community. The

project has also been successful in terms of demonstrating that community oriented

and supported small-scale CDM projects can benefit in terms of reducing the endemic

rural poverty through generating local employment driven by renewable energy based

decentralised power generation using local resources

a —Based on PDD and case study analysis results.


have more of a business focus than developmental focus. Also, theproject developers for these latter projects appeared to havecompletely ignored the local community during all phases ofproject development and implementation.

Table 13 summarises the findings from a comparative analysis(based on PDD and case study analysis Results) of case studyprojects in terms of sustainable development impacts on the localcommunity and region.


5. Discussion and conclusions

The combined desktop study and the case study research reaf-firmed that the concept of rural sustainable development revolvesaround assisting the rural and marginalised communities in thedeveloping world to become healthy, educated and socially equal.

The differences between the desktop study and the case studieshighlight the fact that there is no substitute for on the groundexamination of the actual situation with regard to CDMs and assuch the indicator methodology can assist in managing only thedocumentation process and not in ensuring that maximum benefitsare delivered to the local communities.

The findings also agree with earlier studies that access to energyand related services can benefit the delivery of health and educationalservices in the rural communities through providing modern energyservices such as lighting and refrigeration, including information andcommunication technologies. However, the danger lies in the ‘‘afflu-ence’’ part of IPAT (Ehrlich and Holdren, 1971), that is raising affluencealmost always has a detrimental impact on the environment. That is ifthis impact is not carefully managed using appropriate technologies.Without careful management having the expectations of rural poorraised in order to repeat the problems incurred by the already rich islikely to exacerbate the environmental crisis facing the world. Havingsaid that it appears that community based renewable energy projectscan offer a pathway towards achieving the Millennium DevelopmentGoals. In addition, renewable energy projects can additionally benefitin terms of economic development for micro-enterprises as well as torevitalise the local economy, including development of poor ruralcommunities. Such project initiatives are believed to assist localcommunities in terms of reducing their dependency on provincialgovernment services, which in turn will benefit local capacity buildingfor managing community based rural energy initiatives. The initiativescan also be of benefit in terms of raising community awareness ofrequirement for environmentally benign development.

The study also leads to the inference that renewable energy canbe particularly appropriate for developing countries. In rural areas,particularly in remote locations, transmission and distribution ofenergy generated from fossil fuels can be difficult and expensivebut on the other hand producing renewable energy locally can offera viable low environmental impact alternative. In this scenario,renewable energy solutions for village power applications can beeconomical, practical and functional to an extent or in somecircumstances—sustainable.

The paper proposes a new framework for analysis of sustainabledevelopment benefits of small-scale CDM projects (rural/commu-nity based) that has been developed focussing on the role of energyaccess for sustainable development of rural communities.

The results from the sustainable development assessment of thesmall-scale CDM projects carried out as per the methodology andframework developed showed that small-scale CDMs have, how-ever, often failed to deliver significant or substantial long termdevelopment benefits to the community or region. Here the assess-ment considered how a particular small-scale CDM project wouldcontribute to progress of a target region/community in terms ofeconomic, social and environmental benefits and in turn contributetowards the well-being of its people and small-scale CDM projectswere observed to generate a very low level of beneficial impact.

It was also found that renewable energy and energy efficiencyprojects constituted a significant share (close to 90%) of registeredsmall-scale CDM projects. The results also indicated that localcommunities, however, predominantly did not benefit signifi-cantly, or in a meaningful way, from the small-scale CDM projectactivities. This failure might also be due to the issue regardingsignificant challenges faced by host countries in establishing,applying and monitoring the sustainable development criteriafor small-scale CDM projects.

The case study analysis found that the involvement of localstakeholders and communities has played a critical role in terms ofachieving and real development benefits through CDM projects. Itwas evident that renewable energy initiatives could play a crucialrole in terms of creating positive impacts on education, health andgender equality issues among the rural communities.

The analysis found that around 94% (470 of 500 analysedregistered small-scale CDM projects) of the registered projectswere owned and operated by the private sector, which includescorporate and multi-national companies. In such cases there waslittle involvement found from participation of the host countrygovernments and the civil society, resulting in private parties takingthe bulk of the benefits The case study findings showed that many ofthe private sector owned and operated registered small-scale CDMprojects had very low beneficial impacts in terms of delivering theassured sustainable development benefits to the local stakeholders.As such these projects have failed to fulfil one of major objectives ofKyoto Protocol. This latter finding highlights the need for findingways to increase the number of CDM projects run by NGOs andcommunity organisations, as these projects were judged to be moresuccessful in terms of benefits to the local communities.

It was also apparent from the findings that the criticism of theCDM process being complex, non-transparent and having overlybureaucratic procedures is warranted. The other major issuesidentified included high transaction costs, no guarantee that theproject would ever be registered after wading through the complexmaze of modalities and procedures and the stark contrast inregional distribution of registered projects.

The research also identified that there is no internationallyaccepted, common standard for assessing sustainable developmentbenefits from CDM projects. The host country DNAs are required toestablish sustainable development standards to assess the CDMprojects. Further, for most of the CDM projects, the decisionsconcerning sustainable development benefits were usually madeduring the initial stage of project conception. Whilst the reductionin emissions achieved through the project could be monitoredcontinuously by the project developer and verified and certified bythe Designated Operational Entities (DOE), the sustainable devel-opment objectives or goals, as indicated in PDD for the CDM project,were usually never monitored, verified or certified during the CDMproject cycle. It is considered that having efficient and robustguidelines for assessment of sustainable development benefitsfrom small-scale CDM projects is essential. In addition it is alsobelieved necessary to have various parameters under the sustain-ability indicators encompassing all the dimensions of sustainability.

It is obvious that leaving the responsibility of the host county todefine the term ‘‘sustainable development’’ has resulted in theconcept being usually being interpreted as ‘‘economic growth’’.Additionally the conceptual interpretation has been greatly influ-enced by the existing project participants, who have been mostlyfrom the more influential private and corporate sectors. The worrythat economic development, should it occur, will lead to a growthin emissions is then warranted. It may be thus preferable to look atalternatives such as improved livelihood, prosperity withoutgrowth (Jackson, 2009) or for that matter transition to a steadystate or truly sustainable economy (Daly and Townsend, 1993).

Access to renewable energy on the other hand promises to beadvantageous, in promoting environmentally benign developmentusing community based small CDM projects. CDM in the current state,however, has limited scope in this regard and been so far unsuccessfulin terms of promoting small-scale community development.

The research concludes that CDM in the current state and designis facing several challenges that are hindering the mechanism todeliver and adhere to its dual objectives. Even though the mechan-ism has been marginally successful in terms of contributingtowards GHG mitigation and thus assisting developed countries


(Annex 1) in achieving compliance with their quantified emissionlimitation and reduction commitments, the results of the currentresearch suggest that the mechanism has not been very successfulin practise in assisting developing countries (Non-Annex 1) inachieving environmentally benign development.

It can also be concluded that small-scale, community basedrural renewable energy CDM projects can offer good prospects forpoverty and livelihood benefits. In addition such projects can assistin terms of developing and deploying RE technologies in remote un-electrified regions, promoting local entrepreneurship and resultingin cost effective implementation of RE projects in these regions.

5.1. Recommendations

The following recommendations are made to redress the issuesand challenges discussed in the paper:

�
appropriate modalities and procedures should be developed forthe assessment and delivery of the assured sustainable devel-opment benefits post-implementation of the CDM projects; � realistic and transparent post-registration review process for
CDM projects should be introduced;
� a new grouping under small-scale CDM wherein very small off-
grid projects (100–500 kw) should be established;
� registration fees should be waived and monitoring and verifica-
tion costs cross-subsidised for small-scale community basedCDM projects;
� a monitoring system and guidelines should be developed to
fairly share the CDM benefits between the project developer andthe local communities;
� adequate procedures for on-going consultation with local
communities should be developed;
� the indicators for the sustainable development assessment of small-
scale CDM projects discussed in this paper should be adopted.

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Can the Clean Development Mechanism (CDM) deliver?

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