Burning Money

Abstract

In theory, the Clean Development Mechanism (CDM) makes sense. Investors from rich countries are supposed to invest in climate protection in developing countries and be rewarded with emissions certificates, which lessen their environmental obligations at home. In practice, however, the CDM has hardly helped to make energy supply in poor countries more climate-friendly. Rather, the mechanism is subsidising the refrigerant and air-conditioner industries in emerging markets. Worse, it is inadvertently compounding environmental problems. Adapted from the source document.