Under the CDM, the United Nations awards carbon credits to emissions-reducing projects in the developing world. When credits are sold on to rich countries, the buyers can count them towards their Kyoto emissions targets. Supposed to kill two birds with one stone – reduce emissions and transfer money and technology to the poor – this was, however, never likely to work.
The CDM inherits the UN’s suffocating bureaucracy, so smaller projects struggle to gain approval. But more important than what it keeps out is what it lets in. The criterion of “additionality” is supposed to rule out projects that would not be undertaken without CDM payments. Not only is this counterfactual approach utterly unverifiable; it is also an ideal target for gaming.
The Chinese wind farms are a case in point: Beijing allegedly lowered their subsidies to make them eligible for CDM. The accusation plays right into the hands of the opposition to emissions cuts in the US. Congress threw out Kyoto because China and India were let off without obligations. A US public convinced that poor countries game the system would kill any prospect for a Copenhagen deal.