CIAO DATE: 05/2008
April 2008
Tackling climate change is by now recognised as a policy challenge of utmost importance. The Kyoto Protocol is the most advanced multilateral effort to tackle climate change. One of the most interesting and innovative building blocks of the Kyoto Protocol climate regime is the Clean Development Mechanism (CDM). Since its inception this so-called flexible mechanism has been key in establishing a volatile and booming market for carbon emission reductions (CERs), which are the first internationally traded commodity created by an international environmental agreement. Within the process of market establishment and function, private actors such as companies, project verifiers, carbon funds and traders have become leading actors in the global carbon market. The market continues to be intimately policy dependent as demand derives from the stringency of emission allocations and future nation state commitments for greenhouse gas reductions. This article investigates the transformation of a market that has been initiated by public actors, kick-started by public-private partnerships (PPPs) and that has evolved into a market in which governments are withdrawing and private actors are increasingly taking up their governance function. It furthermore evaluates the status quo of the CDM and finishes with open questions for research.
Resource link: From Public-Private Partnership to Market [Working Paper No. 10] [PDF] - 887K